To lease or not to lease?
Leasing (and/or loaning) horses is a regular occurrence in all equine disciplines. Whether you are leasing a well-bred broodmare to commence a breeding programme or a first pony, leases and loan agreements should always be documented in writing.
A lease of a horse should be approached no differently from other leases entered into day to day, such as the lease of car or property. Any lease agreement requires basic elements such as the names of the parties, a description of the property to be leased and the start, renewal and termination dates. The fee agreed to lease the horse (if any) should also be clearly stated as well as the procedure for termination if non-payment of the lease fee ensues. When drafting a lease for a horse you will also need to consider terms particular to circumstances of lessor (horse owner), lessee (person who leases the horse from the owner) and the horse itself.
This may all sound rather obvious, but, failure to take into account matters that have been taken for granted may ultimately lead to problems further down the track. Some of the most common terms of a lease that people overlook are:
- Who is responsible for picking up / dropping off the horse at the commencement and/or end of the lease? This term is particularly important if the relationship between lessor and lessee is strained, and you live at opposite ends of the country.
- Whether all the parties have the capacity to enter into the lease. Is the lessor named the legal owner of the horse and does that person have the legal authority to sign or agree to the lease. Further do all the parties have the legal capacity to enter into such an agreement - are they old enough?
- Parties do not establish the purpose or limits of the use of the horse in writing. For example if the horse is to only be used as a broodmare and not ridden, this needs to be clearly stated.
- The length of the lease, when and how the lease is to be renewed, terminated or the lease fee increased.
- Where the horse is to be kept and how often the lessor can visit. Further, how often the lessee must provide an update of the condition/health/success of the horse.
- The point where the lessor must be consulted before vet treatment is performed. For example if treatment was required that could threaten the horse’s life, who makes the call to proceed?
- If an insurance policy over the leased horse is required.
- Dispute resolution clauses that sets out the procedure should someone breach the terms and conditions of the lease.
- If the horse is to go abroad at any stage, the legal jurisdiction of the lease will need to be stated in the terms.
The above examples are not an exhaustive list; they are an illustration of the more regularly forgotten important terms. Horses are live animals with individual sets of circumstances, and as such, a lease agreement for a horse will require specific terms to protect all parties. Whether or not you have a written lease will likely not concern you, until something goes awry. If nothing else make sure the terms of the lease are decided and agreed (whether in writing or not) before the lessee takes possession/control of the horse. Commonly in the equine industry, lessees will already have the horse in their paddock before the terms of the lease are agreed. This can cause a host of difficulties. Nonetheless, a lease or loan document does not need to be overly complex and I encourage people considering leasing, to get the terms down in writing. A little time and money to get your lease documented at the start could save you a lot of money and heartache at the end.
Alice Nunn is a solicitor at Norris Ward McKinnon. Information in this article should not be a substitute for legal advice. With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.
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