Lease Agreements That Work

If you're not ready to either buy or sell a horse, a temporary arrangement could be a great option as long as the details of a lease are spelled out in advance.

Given the opportunity, most riders would love to have a horse of their own. But sometimes buying is not the most practical option. Leasing may be a good alternative, one that provides many of the pleasures and privileges of ownership without the long-term commitment.

Or if you’re an owner of a beloved horse that you’re not using to his full potential, you might be delighted to turn him over to someone who will love, care for, and appreciate his talents, without having to give him up completely. A lease might be the answer for you, too.

However, entering into a lease agreement with someone over the care and use of a horse may not be as straightforward as you’d expect. You need to consider many factors-both legal and emotional-before you can make an informed decision.

The reasons to lease are as varied as the spots on an Appaloosa. Sometimes financial considerations come into play, or work schedules make full ownership responsibilities difficult to assume. Perhaps you’ve recently lost a beloved horse and you’re not ready to make the same sort of emotional investment in another animal. Or maybe you want to lease a special horse for breeding or competition so you can get a higher caliber horse than you might otherwise be able to afford.

According to Roni McAbee, owner and operator of South Wind Stables in Binghamton, New York, there are several recurrent reasons why her students choose to lease. The most common is to experience the responsibilities of ownership before making a commitment to buy.

That is exactly why Roberta Armstrong decided to lease a horse for her daughter Haley.

“The whole reason we did it was to see if Haley liked taking care of a horse and having the responsibility. We weren’t sure how serious she was in the beginning. That was the reason to lease before we made a big investment,” Roberta explained.

The Armstrongs leased several horses with various temperaments before Haley found a perfect fit with a Thoroughbred named Zak.

Chelsea Babcock, another student at South Wind Stables, leased her first pony for a different reason. Her mother, Lisa, said that it was a purely practical decision.

“We were looking for a pony for Chelsea to do the children’s hunter. We knew she would outgrow the pony in a year, so instead of investing to buy one, a lease was more feasible. That way, we wouldn’t have to worry about selling the pony and wonder if we could get the price that we paid for it.”

The arrangement worked well for Chelsea, who was able to move on to a horse after showing her leased pony for a year.

A Written Agreement
No matter why you choose to lease, keep in mind that the terms of such agreements can vary as much as the reasons for the lease. Whether you are the “lessor” (the person who owns the horse) or the “lessee” (the person leasing the horse), it is essential to sort out the conditions of the lease with one another and then to put the terms in writing.

Even in an arrangement between yourself and a friend, misunderstandings and disagreements can arise-and it is in the best interest of everyone, including the horse, to clearly define the terms you are agreeing to.

Although it may be tempting to make just a verbal agreement, Julie Fershtman, an attorney who specializes in horse-related litigation, emphasizes the importance of putting any agreement into writing.

“If somebody makes promises to you about what they’re going to do, the payments they’re going to make, the quality of care they’re going to give the horse…if you ask them to put that into writing, they should not hesitate,” Fershtman says. “If they fail or refuse to put it into writing, you’re tipped off that maybe these are not the best people to deal with.”

A written agreement is also useful as a tool to more clearly define the terms of the lease for both parties. However, make certain that you understand what rights you may be giving up before signing anything. The language of some contracts can be very one-sided. For example, Fershtman says that it is possible for a contract to be worded so that if a horse is injured in a pasture while under the lessee’s care, the lessee could be held responsible for the medical costs related to that injury for the duration of the horse’s life. Odds are, you don’t want to pay a lifetime of vet bills for a horse you don’t even own!

“Understand what rights you may be giving up and what risks you are accepting,” Fershtman advises.

Specifying the Terms
Once you’ve decided to put things in writing, there are still many topics that need to be discussed and understood by the parties involved. The “terms of a lease” should be discussed in detail-and some of the things to consider can be complex.

The most obvious detail is the type of lease. Do you want to try a full lease or a partial lease (also called a half-lease or share board)? In a partial lease, more than one person may be leasing the horse at the same time (or you may be sharing the horse with the owner), so riding days will need to be divided up between the parties. You may be allowed to ride only two to three times a week, but a half-lease is usually cheaper and less complex and may work out just fine for someone who is not into serious competition.

The second thing to consider is the duration of the lease. Are you planning to enter into a relatively simple “monthly agreement” or do you plan to lease a horse for an entire year or longer? It’s up to you and the owner to determine. Also, be clear on whether this is a “lease with an option to buy.” You could become very attached to your mount only to find out that buying him is not possible at the end of the agreement. Or, if you are the lessor, you may feel pressured to sell before you are ready to let go of an animal you love. Figure out exactly how you feel about the horse and his future welfare before you enter into any type of agreement.

The horse’s medical costs must also be taken into account. In most full leases, the lessee takes on the cost of shoeing, deworming, and vet bills for the duration of the lease. However, there is always the risk of an accident, injury, or illness to the horse during that time. Sort out in advance who should be responsible for any extraordinary (for instance, an emergency colic surgery) or ongoing veterinary costs. Many times, it makes sense to invest in an equine insurance policy. You may want to look at coverage that includes not only death, but that also covers major medical expenses such as a colic surgery or “loss of use.”

This is what the Babcocks decided to do for their leased mount. “We paid additional money so the owner could take out an insurance policy on the price of the pony,” Lisa Babcock recalls. That way, both parties would have been protected if anything happened to the pony while in her daughter’s care.

The lessor and the lessee also need to define exactly who the parties are in a lease agreement. This may seem so obvious it doesn’t need to be discussed. But it’s not as simple as it appears, especially when the horse will be out of the owner’s sight. For instance, someone who leases a horse for a year might let her friends ride-or give her little sister pony rides, unless the lease specifies otherwise. Besides creating a possible liability, such a situation might have an undesired effect on the horse. Stable manager Roni McAbee points out that if a high caliber horse is ridden by someone who is not as advanced as the mount needs, a lot of expensive training might be undone.

Intended Use
Both Roni McAbee and attorney Julie Fershtman emphasize that the intended use of the horse is important to discuss. What activities are you planning to do with the horse? Are you allowed to show him? How long can he be ridden? How often? What restrictions are there?

“Use is a really important provision in a lease,” Fershtman says. “It is also where the lessor has some control, at least in writing, about what is going to happen during the leasing period.” In addition, she says, the lessor can set up restrictions on activities like jumping, barrel racing, and trail riding.

McAbee, who has leased horses to numerous people during her career, does not allow jumping outside of lessons. She also has strict policies about grooming before and after the ride. To be certain that her policies are enforced, she never lets her animals leave her property. Of course, if you are not the owner of a stable, you may not have the luxury of leasing to someone in the same barn.

The lessor can also lay down rules about transportation. It is possible to set up restrictions about the horse leaving the state, which could become an issue if you compete regularly and wish to show out of the area.

Other geographical challenges are coming into play as well. “Nowadays, thanks to the Internet, we’re seeing more people dealing across state lines,” Fershtman says. For example, you may end up leasing a horse from Vermont when you live in New York. “If this is the case,” contracts need to be clear on which law the parties intend to apply.” This is because laws can vary widely from state to state.

Obviously, if you’re dealing with people you don’t know, such as someone in a different state who you’ve contacted via the Internet, it becomes even more important to put your agreement into writing. “If you are leasing to a stranger, you need a contract,” McAbee says. “It’s as important as a contract to rent a house.”

Contracts for equine leases can be found online; however, you might want to carefully consider whether to use them.

“In my opinion, form contracts found on the Internet and in books sold in stores are, at best, a starting point. I can’t even say a good starting point sometimes,” Fershtman cautions. She points out that many of these form contracts leave out key protection clauses, and, in some cases, don’t comply with state laws.

“If people want to be protected, they really should consider having a lawyer review or draft a contract.”

Even though the list of considerations may seem daunting at first, equine leases can and often do work out to the benefit of both parties-and for the horse as well. The key is to be informed before you make an agreement, enter into a lease only with a person you trust, tailor the conditions to suit your particular situation, and make certain that the terms are fair before agreeing to them.

What did you think of this article?

Thank you for your feedback!