es, of course, clients can lease a horse, and when it’s yours, the transaction can produce a healthy revenue stream for you.
But what’s a trainer to do when Mary wants to lease Ann’s horse? We’ll investigate a variety of scenarios so when the question arises in your barn, you’re prepared to lease…or desist.
Write It Down
Some trainers simply say “no thanks” to intra-client leasing. Fair enough. At Jim Dudley Quarter Horses in Columbia, Mo., trainer Missy Hood reminds you that “this can all get to be pretty touchy. It’s different from any other business. These animals are like people’s children. Someone doing something with another’s child, even though the contract is signed, disrupts friendships and more,” says Hood, who likens the situation to borrowing money from family. “We’re hitting on a nervy subject here.”
Still, other trainers may give leasing between clients a sort of informal blessing and not get too involved.
On the Website of all-discipline Fox Trot Farm in Warrenton, Va., (www.foxtrotfarm-va.com) the directives are clear. “Fox Trot Farm offers several horses for lease and lessons. All horses must remain at their designated boarding facility and may not be moved to outside boarding facilities. If a lease horse is to be used for showing, permission must be provided by the horse’s individual owner. Please note, because some of the lease/lesson horses are not the property of Fox Trot Farm, individual leasing agreements are up to the discretion of the horse’s individual owner.”
For those trainers who do decide to oversee leasing in a very pro-active manner, nothing is left to chance. June Gillis-Ahearn of hunter/jumper/equitation-focused Victory Stables, Inc. in Stoughton, Mass., has been doing her job for 15 years and knows how to be the middle man. She starts by representing both the owner and the person leasing. She begins the process with a standard lease form, developed by her attorneys, that stipulates lease terms, board, insurance, and additional expenses, including veterinary.
“I’ve never done two leases the same,” says Gillis-Ahearn. She observes that it’s nice when the lease is “equally balanced,” but frequently the lease can benefit the owner a smidgen more. “If a child is going away to camp, and that pony needs to be exercised and campaigned, the lease fee is a nice perk when the agreement is doing the owner a favor.”
Leases Pay
Here’s another “could-be” scenario that may have a familiar ring in your barn, this one benefiting the rider: the finals in your chosen discipline are approaching and a top contender’s horse is suddenly out of commission. That rider needs to lease a horse, now.
You’re a responsible professional who has your clients’ combined best interests in mind, so you want to do the right thing, as does Gillis-Ahearn. “When I’m in the middle, I try really hard, but maybe the horse doesn’t end up being a great match,” she says. So, don’t sweat and don’t stress: write the lease for a short period, say, month-to-month. “It’s your best defense, and if it does go well, after one to three months, suggest going for 6 or 12.”
This trainer receives 7.5 percent from each client, for a total of 15 percent. Before you and they sign on your dotted line, “make sure everyone has really communicated. Also make sure the prospective rider knows what they’re getting into.” This is a big commitment, so ensure that relevant clauses are contained in the lease.
In very high-end leases, such as those applicable to top national-rated show horses, the lease fee could be as much as 30 percent of the horse’s appraised value, and that’s a lot of money in anyone’s checkbook. When the stakes are high, Gillis-Ahearn recommends a pre-purchase exam. Sometimes, an exit clause is included, so the rider can get out of a lease if the horse can’t be used for the original purpose intended. She also involves an appraiser to protect herself, to substantiate the lease fee and “to assure the numbers are deemed fair by everyone. Leasing ‘within’ the barn? I like to think of it as managing our horses well.”
When It All Works
A client-to-client lease can be a match made in heaven, says trainer Brenley Allyn of Cedarhill Farm Inc. in Waxhaw, N. C., which also teaches hunter/jumper/equitation. One of Cedarhill’s riders was a girl that rode really well and was ready to leave Short Stirrup behind, with an eye on “A” shows. The pony’s owners thought they’d like to sell their equine charge, but wisely understood that “it needed to be seen at the shows with a kid on it,” recalls Allyn.
Those owners, says Allyn, “are smart about the horse business, and when we made it clear they needed to step back 100 percent—not keep the pony at their house but keep it with us and under our supervision—they were totally fine with that.”
In this case, satisfied owners watched the pony and leasee win at the shows, says Allyn, who asked both clients to sign a basic farm lease with their names on it instead of Cedarhill’s. Like Gillis-Ahearn, the fee to negotiate and manage the deal was 7.5 percent from each party. “It’s like you own it,” says Allyn, referring to the leasee’s responsibility. “If it gets hurt, you pay all the medical bills. We’ll still provide lessons, and may provide another mount for a while. If it’s a permanent scenario, we negotiate then, too.” Allyn offers the clients the option of performing a vetting. “Some say ‘yes,’ some ‘no,’” says Allyn.
The key here, she reflects, is that “the owner has to really pretend they don’t own the pony any more. Otherwise, it’s too much pressure on rider and trainer.”
On Guard
When it comes to leasing and the questions regarding who is responsible for what, Rachel Kosmal McCart of Equine Legal Solutions, Inc. (www.equinelegalsolutions.com) says having it in writing is very important. “Trainers who have paperwork are in the minority. Doing this without paperwork is dangerous for all the reasons you can think of,” says Kosmal McCart.
What happens, for example, if a horse becomes disabled during a lease, or dies? “Reasonable people can disagree about what should happen in any situation, such as when an injury occurs.” Reasonable is the operative word here.
Consider the ramifications: the horse had a history of being serviceably sound and then suddenly, it’s not. The owner thinks, “I thought I had him leased, had help with his expenses, and now I can’t afford to take him back and I can’t ride him.” Emotions can get heated and costs on both sides escalate when professional services are required and accusations reign.
That contract, she says, “can align expectations so both sides feel confident that they know how things will work. No matter what happens, they’ve figured out in advance what they will do.”
If you don’t consult an attorney, there are legal forms available from many sources. For example, Kosmal McCart supplies documents that run the gamut and are available online at a nominal cost. If you don’t see the one you need—which would be unusual—ask her or your attorney to create one.
A handshake just doesn’t cut it any more. Don’t take a chance with your business. If clients want to lease within your barn, you have several options: say “no,” turn a blind eye, or determine how you can increase profits by earning a monetary piece of the lease. The choice is yours.
