Delinquent Slip Payments: Tips for Evictions

As marina owners, your clients probably have to deal with delinquent renters from time to time. As with apartment or condo tenants, it can be challenging to deal with marina customers who routinely ignore their rental due dates or, worse, disregard months of monthly slips.

Ultimately, your clients may have no choice but to initiate eviction proceedings against customers that continue to ignore their rental obligations. At some point, your clients’ patience will wear thin, and they will no longer want to put up with months of unpaid rent and customers that refuse to make good on their commitments.

Unfortunately, evicting marina customers is never easy. While marina insurance will help pay for the potential damage that renters cause, there is still the problem of handling a potentially tricky situation. Unlike with apartment or office rentals, your clients can’t very well throw boat owners out on the street. They also can’t set the vessel adrift, so it will likely remain in the same slip that it has been occupying all along.

It is also important to note that evicting a marina tenant does not affect ownership of the boat. The delinquent renter still holds the title, and as such, still has owner rights that your client can’t ignore. Therefore, any eviction process should be carried out with these factors in mind.

So what is a marina owner to do when a customer refuses to settle slip payments? How can your clients handle the delicate process of evicting a renter from the marina? Here are some suggestions:

Having an arrest warrant issued for the boat

The first option is to have an arrest warrant filed‒not against the boat owner but the vessel. This legal action prevents the delinquent tenant or anyone else from taking or moving the boat before the case can be resolved in court. Consequently, the boat can be sold to recover the amount that the tenant owes.

Because of the expense of filing such a claim, this is only feasible if the tenant owes a significant amount of rental fees. Otherwise, your client might be better off with one of the other options below.

Debt recovery proceedings

Another option is to initiate a legal claim for the full amount of outstanding fees. Because this claim is directed personally to the delinquent tenant, your client must know where they live. Otherwise, your client will have to hire investigators to find the tenant’s new address. Your client will also have to send the tenant a written notice detailing the amount owed and that legal proceedings will commence within a certain period if the balance remains unpaid.

Insolvency proceedings

Marina owners could also initiate bankruptcy or insolvency proceedings against the boat owner. If the tenant is an individual, your client should file a bankruptcy petition. If it is a company, your client should petition for insolvency.

Before the legal action can begin, your client should file a statutory demand against the owner of the boat. This will have to be served in person, so your client must arrange to have a process server deliver the necessary papers.

This demand signifies that the tenant should pay or agree to pay what is owed within 21 days of the demand date. Otherwise, the marina owner will be entitled to go ahead with bankruptcy or insolvency proceedings.

Filing a trespassing claim

Finally, your client could file a trespassing claim against the delinquent customer. When approved, the court will order that the boat be seized and that the tenant pays all outstanding fees.

The court will subsequently instruct a bailiff to seize the vessel, with the understanding that it can be sold if the delinquent renter does not make good on their obligations. The proceeds of the sale will then be used to pay your client what is owed to them.

Your client could also get an injunction preventing the boat and owner from entering the marina. But keep in mind that trespassing claims can be costly and take a long time to resolve, especially if the delinquent tenant contests it.

Remember that marina slip rental contracts are subject to federal jurisdiction. They are legally considered commercial tenancies, even if the owner also resides onboard. In any case, your clients may have legal resources under state laws regardless of federal jurisdiction. It is advisable to consult with a property attorney to determine the best course of action for dealing with delinquent renters.

About Merrimac Marine Insurance

At Merrimac Marine, we are dedicated to providing insurance for the marine industry to protect your clients’ business and assets. For more information about our products and programs, contact our specialists today at (800) 681-1998.