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  1. #1
    Join Date
    May 2001
    Location
    ation, Loc: ation, Loc: ation.
    Posts
    16,318

    Default Syndicate Agreement Legal Question

    I don't understand the point and meaning of the section highlighted below (pasted from the RYA syndicate agreement)....

    6. Termination of agreement

    6.1 If either of the Parties has reasonable cause or desire to sell his share of the boat and thereby terminate this agreement, he may, by individual notice in writing to the other party, indicate his desire to terminate. Such termination shall take place within six months after the delivery of such notice in writing.

    6.2 Upon such notice in writing being delivered, the remaining Parties shall take such steps as may be necessary to secure the execution of a proper release and indemnity against all liabilities contracted by the determining Party and shall arrange to purchase the share of the determining Party at a fair market price or alternatively the determining Party and the remaining Parties shall obtain agreement by another to take on the share of the determining Party. Where another takes on the share of the determining Party it shall be the responsibility of the determining party to pay for any advertising or other such expenses incurred in relation to the sale. The determining Party hereby agrees to defray or settle his share of the disbursements, payments or accounts for the Boat up to and including the date of actual termination as agreed between the Parties which for the avoidance of doubt may be any date within six months of the individual notice in writing being received by the other Party.


    Can anyone shed any light on it? What would happen if the selling partner is unable to sell his share within 6 months?

  2. #2
    Join Date
    Sep 2011
    Posts
    2,237

    Default Re: Syndicate Agreement Legal Question

    I read it as if the seller hasn't sold their share within 6 months of notice given, the other shareholders buy the share. I guess that if the existing shareholders couldn't buy out the leaving party then the boat would get sold .

    Could be wrong though, this is JFM territory.

  3. #3
    Join Date
    Apr 2008
    Location
    Isle of Man
    Posts
    2,069

    Default Re: Syndicate Agreement Legal Question

    I read it the same as MrB.

    How do you decide on the value of the share? Only worth what someone is willing to pay etc....

    If no one new wants to buy the share....very tricky for other share holders to value it. Did you discuss any of this with your syndicate members beforehand? What happens if etc...?

  4. #4
    Join Date
    Apr 2011
    Location
    Boat- Western Med
    Posts
    5,189

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by MrB View Post
    I read it as if the seller hasn't sold their share within 6 months of notice given, the other shareholders buy the share. I guess that if the existing shareholders couldn't buy out the leaving party then the boat would get sold .

    Could be wrong though, this is JFM territory.
    +1 itís a some certainty for existing .There is a timely way out .Not just getting cash ( how ever thatís valued ? ) but freeing from the running costs , money pit ness of boat ownership as well .A clean break effect .

  5. #5
    Join Date
    Feb 2015
    Location
    Conwy
    Posts
    4,061

    Default Re: Syndicate Agreement Legal Question

    sorry if this is a bit of thread drift, but does a "short term" share (for instance a year or two lease at a time) exist as a sort of cost defray if a full time share doesn't come timeously. (obviously without owner rights etc) I query this as a sort of alternative to charter on a try before you buy type scenario for those looking to transfer to the Med. It's just an idle thought in so far as if I was contemplating a transfer to Med boating it would be a handy step in to make the choice when it's a family rather than personal decision and a boat in the Med makes boat sharing sense to me then. (Own boat locally but shared boat for holidays)

  6. #6
    Join Date
    Sep 2016
    Location
    SoF
    Posts
    9,462

    Default Re: Syndicate Agreement Legal Question

    It doesnít say that the partner should get all his money back. If someone drops out and canít sell their share in six months, then the remaining partners could buy it for a nominal sum. Which has got to be the Ďfair market priceí of something that incurs continuous costs and canít be sold in six months. As long as you take on all the running costs.
    Once again this is the ramblings of a layman
    Last edited by Bouba; 01-09-19 at 12:54.
    Neither a Leaver or Remainer be

  7. #7
    Join Date
    Jun 2006
    Posts
    1,297

    Default Re: Syndicate Agreement Legal Question

    How to determine fair market value?

    Maybe you get a surveyor to value it?

  8. #8
    Join Date
    Sep 2016
    Location
    SoF
    Posts
    9,462

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by BruceK View Post
    (Own boat locally but shared boat for holidays)
    actually, shared boat locally and shared boat for holiday, also makes a lot of sense.
    Neither a Leaver or Remainer be

  9. #9
    Join Date
    Oct 2010
    Location
    London no more
    Posts
    2,329

    Default Re: Syndicate Agreement Legal Question

    This is why it always pays to get proper legal advice before signing a contract.

    If the other party hasn't already submitted his notice in writing, submit your notice to him in writing first. He'll then have six months to buy your share - problem solved.

  10. #10
    Join Date
    Apr 2008
    Location
    Isle of Man
    Posts
    2,069

    Default Re: Syndicate Agreement Legal Question

    Surveyor is a good idea for an impartial valuation but a syndicate boat share isn’t worth value of boat divided by shares IMHO.

    To me it’s less as I wouldn’t like sharing my boat, having to use mechanic for everything incase i cock up, limited use etc...

    To someone else perhaps it’s more for the same reasons above plus divided running costs etc...

    That’s why unless someone buys the share.....it’s so hard to value it I reckon.

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