Bareboat Charter
A Bareboat Charter (Demise Charter) is the most extensive form of vessel hire: the charterer takes the vessel "bare" — without crew, provisions, stores, bunkers or any operational support. The charterer must crew, fuel, victual, insure, maintain and operate the vessel at their own cost and risk. In effect, the charterer becomes the temporary owner-operator while the legal owner is paid a daily hire.
Bareboat charters typically run for years (often 5-15), and are frequently used as financing instruments — a financial institution buys the vessel and bareboat-charters it to the operating company, who pays hire that economically resembles loan repayments. At the end, ownership may transfer to the charterer ("bareboat charter with purchase option" or BBCHP).
The standardised form is BARECON (Bareboat Charter Party).
A bareboat charter is as close as you get to owning a ship without buying it — the charterer takes full operational and financial responsibility, and the legal owner simply collects hire. It is often really a financing structure (BBCHP), where the hire resembles loan repayments and ownership can transfer at the end.
What is BBCHP?
A Bareboat Charter with Hire Purchase — a bareboat charter used as financing, where the hire payments resemble loan instalments and ownership transfers to the charterer at the end.
How is a bareboat charter different from a time charter?
In a time charter the owner still crews and maintains the ship; in a bareboat charter the charterer takes the vessel bare and provides everything — crew, fuel, maintenance, insurance — bearing all risk.