A yacht management agreement must clearly state which acts the manager is authorised to perform and which obligations they may create on the owner's behalf. If spending limits, the collection of rental income, commission, maintenance, staffing and the accounting arrangement are not set up together, control of the boat and financial liability can drift apart. The title of the contract alone is not enough. It must be clear whether the management is carried out on behalf of the owner or in the operator's own name, and who bears each risk.
Owners often do not want to follow the details of daily operations. The management company runs staffing, maintenance, marina, booking and insurance processes. For this division of labour to work, it depends not only on trust but on an auditable system of authority and records. This article focuses on the relationship between owner and manager. The rights of a customer who rents a yacht for a holiday and the commercial permits needed to operate a business are separate legal topics. Where a boat belongs to several co-owners, see the article on joint yacht ownership for decision-making and cost sharing.
How do management, chartering and brokerage differ from one another?
If the manager follows the affairs on the owner's account and receives a fee for doing so, the element of agency (vekâlet) may come to the fore. The relationship of a company that rents the boat for its own operation at a fixed price and offers services to customers in its own name involves rental and operating risk. A contract with a person who only brokers a deal by finding a customer is different. The same document may combine these functions. For the details of the rental relationship, see the yacht charter agreement article.
TBK m.502 allows the provisions on agency to apply to work contracts not regulated by law, to the extent that their nature fits. This provision does not mean that all clauses of every yacht management agreement must be treated as a single contract type. Elements such as a fixed rent, a minimum income guarantee, an undertaking that maintenance will achieve a result, or sales brokerage must be assessed separately.
The legal characterisation affects when the fee arises, the standard of care, termination and limitation. For example, if an amount written under the heading "revenue sharing" is in reality a rent guaranteed to the owner, the manager's payment obligation changes when bookings are low. A manager who has only undertaken diligent marketing cannot be treated as having guaranteed the same result. The agreement must define the performance undertaken as well as the method of calculation.
How should the operator's powers be limited?
An instruction for performing work and a power of representation are not the same thing
The management agreement governs the obligations the parties owe each other. A power of representation, however, determines whether a transaction the manager concludes with a third party binds the owner. Under TBK m.40–48, the examination covers in whose name the transaction was made, the scope of the authority, whether it was disclosed to the third party, and the possibility of later ratification.
The owner may have set a spending limit for maintenance in the contract while giving a broad power of attorney to outsiders. If the manager spends contrary to internal instructions, liability towards the owner may arise. Whether a contract concluded with a third party binds the owner is assessed separately under the rules of representation. For this reason, the management agreement, the power of attorney, bank authority and the notices given to suppliers must reflect the same scope.
Authorising the manager to arrange maintenance does not mean unlimited authority for every transaction, such as selling the boat, mortgaging it, settling a dispute or applying to arbitration. The legal form required for each transaction and any special authority it needs are reviewed separately. In addition, the representation authority of the person signing for a company, and any joint-signature requirement, must be verified.
What decisions should an authority list cover?
The contract should show separately day-to-day operations, major repairs, staff hiring, customer contracts, price reductions, long-term commitments and insurance transactions. The fact that an expense appears in the budget does not mean the manager may buy it from any supplier on any terms. The person who approves, the communication channel and the information the approval must contain should be specified.
- For ordinary expenses, the limit per transaction and per period should be written, together with how tax and exchange rates are to be taken into account.
- For major maintenance and renewals, the number of quotations, the technical justification and the cases requiring written approval should be stated.
- Authority to grant a customer a discount, free use, a deposit refund or a settlement of a claim should be defined separately.
- The authority and form required for credit, guarantees, security, sale and registry transactions should be regulated separately.
Splitting an expense into smaller parts so that it falls below the approval limit should also be prevented. Setting the limit only per invoice increases this risk. It is more practical to assess together the expenses relating to the same fault or project. This is not a mandatory statutory standard; it is an audit method the parties establish by contract.
What if approval cannot be awaited in an urgent repair?
At sea or in a marina, a lengthy approval process may not be workable for every breakdown. TBK m.505 considers departure from instructions under limited conditions. The key points are that permission could not be obtained and that the owner, had they known the situation, would clearly have approved. This provision does not allow the manager to explain every expense afterwards as "urgent".
The contract should set up a notification procedure for emergencies such as threats to life, sinking, fire, environmental damage and the need to prevent damage from growing. The manager should record the measure taken, the alternatives, the attempts to reach the owner and the cost, and inform the owner at the first opportunity. Removing an emergency danger and a later comfort or equipment upgrade should not be placed under the same approval.
Failure by the owner to provide the necessary budget can also have consequences. If the manager reported the need in time and in an understandable way, the effect of the missing budget on the breakdown or on the stoppage of activity is assessed. Conversely, a professional manager who knows of a clear safety danger and sails on only to avoid losing income cannot justify this by the owner's payment delay. The operational decision required for safety must also be taken separately.
How are rental income, commission and expenses monitored?
Who owns the collected money must be determined
It must be clear who concluded the contract with the customer and who collected the price. Money collected on the owner's behalf and income the operator earns from its own service sales are not of the same legal nature. A customer's refundable deposit must also not be confused with recognised rental income. Cancellation, early departure and damage deductions must appear as separate items in the account.
According to TBK m.508, an agent must, when requested, account for the work and hand over to the principal what they have received in connection with the agency. Interest liability may also arise on money whose delivery is delayed. Holding the income in the manager's account until the end of the season is not a natural management power without a clear and valid contractual provision or another legal basis.
A separate bank account, booking-based records and regular reconciliation of transfers make financial monitoring easier. However, opening a separate account should not be presented as giving the money a special statutory protection or an automatic right of separation in bankruptcy. The account holder, the representation and disposal powers, the legal nature of the collection and the applicable provisions all matter together.
How commission is calculated, and hidden benefits
The management fee may be a fixed monthly amount, a share of income, or a mixed model. The contract must state whether the rate applies to the gross booking amount or to the amount after taxes and agency fees. Commission conditions must be set separately for cancelled bookings, amounts that cannot be collected, the owner's personal use, and bookings made after the contract has ended.
A discount obtained from the maintenance company, a supplier's commission, or giving work to a company connected with the manager may create a conflict of interest. For the duty of loyalty and care under TBK m.506, it is important that these relationships are disclosed and the fee structure is transparent. Which fees received for the same service, both from the customer and from the owner, are earned and in what scope should be documented. A general clause stating that "all expenses belong to the owner" does not legitimise an undisclosed benefit.
The owner should also assess expenses and advances made in properly carrying out the work under TBK m.510. If the manager made a necessary payment from its own funds, it cannot be said that the expense will always be rejected merely because the invoice was not shared in advance. The necessity of the payment, the authority, the amount, the documents and the proper performance of the work are examined together.
Is sending only an Excel table an accounting?
Accounting requires information and supporting documents presented clearly enough for income and expenses to be checked. Writing only a total of "maintenance expense" or "operating cost" may not be sufficient. Bookings must be linked to the contract, collections to bank movements, expenses to invoices and payment records, and deductions to the relevant authority.
A workable monthly report shows the opening balance, new collections, refunds, deposits, expenses incurred, the management fee, transfers to the owner and the closing balance. Exchange rates and dates used for foreign-currency accounts must be visible. Cancellation invoices, supplier refund payments and the closing of advances must also be included in the report. The law does not set a fixed reporting calendar for every yacht; the parties may agree on a period suited to the volume of work.
The fact that the owner does not object to a report promptly does not mean they accept withheld or untrue information in every case. Silence-as-approval and release clauses in the contract are assessed in light of the rules on standard terms, the principle of good faith and the mandatory limits of liability. The right of audit must not be reduced to seeing only the summaries the manager has chosen.
The Court of Cassation (Yargıtay) 3rd Civil Chamber decision dated 23 June 2025, E.2024/4374, K.2025/3497 does not concern yacht management. It is a receivables case concerning money and rental income managed under an agency. In that decision, bank movements, payments and an auditable expert account were important. After an earlier reversal, the judgment given with regard to the currency requested and the procedural limits was upheld. The decision is cited here to illustrate the consistency of accounts and claims in managed funds. No result specific to yacht operation is drawn from it.
Liability in maintenance, staffing and insurance management
A professional manager must act with the loyalty and care appropriate to the nature of the task they have undertaken. Failing to follow periodic maintenance, concealing a known fault, missing an insurance renewal or assigning unauthorised staff may cause damage. However, the appearance of a fault does not by itself prove the manager's fault. The task undertaken, the foreseeable risk, the measures that could have been taken and the causal link with the damage are assessed. For the maintenance contract, see the yacht maintenance and refit contract article.
Having maintenance performed by a third party does not always remove liability. TBK m.506–507 regulate the authority to have work done by another and its consequences. Unauthorised delegation and the use of permitted assistants are different things; the care in selecting and instructing them is examined separately. Other elements of the contract and the provisions on performance assistants may also be relevant, depending on the facts. In case of an accident, for liability towards third parties see the article on liability in yacht and boat accidents.
The contract must state clearly whose employee each staff member is, and divide the duties for wages, leave, social security and termination. However, a label on paper alone does not change the actual employment relationship. A manager who is the employer does not wholly escape their own statutory obligations towards an employee by saying that "the owner did not send a budget". Claims the owner and the manager later direct at each other are assessed separately. For details, see the article on yacht captain and crew labour rights.
For insurance, obtaining the policy, monitoring renewals, notifying a change in commercial use, reporting a claim and handling the process with the surveyor are different tasks. It must be clear which of these tasks has been given to the manager. In a claim for loss arising from a coverage gap, the question is not only whether a policy existed, but what loss the insurance could have covered had proper action been taken. Attributing every hypothetical loss to the manager is not a sufficient method of calculation. For details, see the article on denial of a yacht insurance claim.
What steps are required when the contract ends?
In a relationship of agency, TBK m.512 regulates the parties' ability to end the contract unilaterally, and damage caused by termination at an inappropriate time remains reserved. This provision does not mean that every mixed yacht operating contract can be ended at any moment without consequence. Fixed-term rent, income guarantees, investments and other contract elements are dealt with separately.
Management fee earned up to the termination date, documented expenses and an amount claimed for a future period are not the same thing. It should not be assumed that commission for the entire remaining term has arisen automatically. The reason for termination, the appropriate timing, the actual loss, the costs saved and the validity of any penalty clause are examined.
Withdrawal of representation and bank authorities must be planned together with the termination notice. It is determined which transactions require notice to marinas, captains, suppliers, agents and booking channels. Within the internal relationship, the end of the contract does not mean that third parties in every case learn of it. Ongoing customer contracts must be resolved with regard to the rights of the customers concerned, whether by transfer, cancellation or performance. For the marina berthing relationship, see the marina berthing agreement article.
The handover record must show the keys, technical and registry documents, the inventory, the maintenance history, open faults, fuel, stock, reservations, customer deposits, receivables and debts. Corporate account access must be transferred securely, and personal passwords should not be shared. Customer and employee information must be handed over with regard to the relevant personal data obligations.
When a fee dispute arises, the manager cannot be treated as entitled to keep the whole boat, the documents or the customers' funds indefinitely. Any claimed right of retention, set-off or other security must be assessed for its legal conditions and scope. Equally, the owner should not disregard the manager's proven rights. Handing over the undisputed part and resolving the disputed account should be kept as separate as possible.
What route applies if accounts are not rendered or authority is exceeded?
The first request should specify the period, collections, documents and balance being asked for. Instead of a demand to "send all the accounts", separately presenting the booking, bank, expense and inventory records gives a more verifiable result. The contract, the power of attorney, the reports, the correspondence and the payment records must be preserved. Where documents may be lost, evidence preservation may be considered; where needed to protect a right, interim legal protection suited to its conditions is evaluated.
For claims arising from agency, the five-year limitation period under TBK m.147/5 is important, and the start date and the maturity of the claim must be determined separately. Different performances in a mixed contract, a tort or other legal grounds may not share the same period. Failure to render accounts does not mean that all claims may be asserted without limit of time.
The competent court depends on whether the contract is commercial, consumer or general private law. Engaging professional management for a yacht used personally may call for a consumer-transaction assessment, whereas managing a commercial charter operation may not lead to the same result. For a claim for money, the mediation provisions that apply as a condition of suit are reviewed. The scope of the request for accounts and of the claim for payment must be consistent with the type of action brought.
Not every shortfall in accounts is a crime. Where fraud, breach of trust or another criminal allegation is made, the elements of criminal law are assessed on concrete facts. A criminal complaint does not remove the need to establish the contractual account and to collect the claim. However, an unfounded criminal accusation should not be used merely to pressure payment.
Conclusion
In yacht management, a sound contract combines the authority that keeps daily work running with an auditable accounting system. Internal spending instructions, external power of representation, the transfer of income and staff responsibility must be set up in harmony. Regular reports and supporting documents are needed not only for disputes but also for managing the budget. When the contract ends, the financial account, the handover of the boat and the closing of the representation authority must be completed together.
Frequently Asked Questions
Does giving the manager a power of attorney replace the management agreement?
Usually not in every respect. A power of attorney shows the power of representation. Fees, budget, reporting, the transfer of income and the closing account must be arranged separately, and the scope of the two documents must match. Detail: An instruction for performing work and a power of representation are not the same thing.
Is every invoice exceeding the limit in the contract invalid?
No. A breach of internal instructions and the effect of representation towards a third party are different things. The authority document, the third party's knowledge and the name in which the transaction was made are assessed separately. Detail: An instruction for performing work and a power of representation are not the same thing.
May the manager keep rental income until the end of the season?
That authority does not arise automatically. The transfer deadlines in the contract and the legal nature of the collection are examined. Delaying the payment of money that must be handed over within an agency may create interest liability. Detail: Who owns the collected money must be determined.
If a repair is urgent, is prior approval mandatory?
It may not always be possible. The conditions of TBK m.505 and the emergency arrangement in the contract are assessed. The manager should document the urgency, the attempt to reach the owner and the necessity of the expense. Detail: What if approval cannot be awaited in an urgent repair?
If I terminate the contract, must I pay all future commissions?
Not automatically. The legal nature of the contract, the timing of termination, the fees already earned, the actual loss and the validity of the relevant clause are assessed together. The remaining term alone does not show that the entire commission has arisen. Detail: What steps are required when the contract ends?
Does the limitation period not run if no accounts are rendered?
There is no general rule of that kind. The legal nature of the claim and the date on which it became due must be determined. The five-year period for agency claims and the periods for claims based on other grounds are examined separately. Detail: What route applies if accounts are not rendered or authority is exceeded?
Sources and legal bases
1 — Law No. 6098, Turkish Code of Obligations (Türk Borçlar Kanunu): in particular Articles 20–25, 40–48, 112, 115–116, 146–149 and 502–514. Enacted text of the Grand National Assembly of Türkiye. The provisions used have been reviewed for the matters discussed; this is not presented as a current consolidated edition of the whole law.
2 — Law No. 6102, Turkish Commercial Code (Türk Ticaret Kanunu): in particular Articles 4–5/A on commercial disputes, representation and mediation for commercial money claims, and the relevant company provisions. Official text of the Ministry of Trade.
3 — Law No. 6502, Law on Consumer Protection (Tüketicinin Korunması Hakkında Kanun): in particular Articles 3, 5, 73 and 73/A, regarding the possibility of a consumer transaction. Ministry of Justice legislation record.
4 — Court of Cassation, 3rd Civil Chamber (Yargıtay 3. Hukuk Dairesi): 23 June 2025, E.2024/4374, K.2025/3497. Full-text record of the decision. A decision on general agency and managed funds; it is not presented as a yacht dispute.
5 — Ministry of Justice, Department of Mediation (Adalet Bakanlığı Arabuluculuk Daire Başkanlığı): Explanations on mediation in commercial and consumer disputes. Source check: 13–14 October 2026.