In the boarding and training world, cash is king. Late-paying clients can quickly put a stable out of business. The good news is that there are several extremely effective collection tools available to the stable owner. This article on statutory agister’s liens can help you learn how to collect your money.
1. The agister lien is a special type of possessory lien that applies when one person takes care of livestock belonging to another. The statutes exist in all 50 states, but vary widely. Some permit you to lien an animal for food and board. Others permit liens for additional training and care services. You must identify the applicable requirements for your state to ensure your compliance. See a 50 state cross link: “Liens for Care of Horses”, https://asci.uvm.edu/equine/law/lien/lien.htm.
2. Your state statute will identify the specific elements required for the lien document. Typically this includes:
a. Itemized statement of costs and expenses outstanding, with backup documentation
b. Written notice to the owner demanding payment for same within a stated timeframe
c. Written notice of your lien should the account not immediately be satisfied, and
d. Identification of the statutory process permitting foreclosure and sale should payment not be timely made.
Your statute will identify what costs can be included. Some states permit liens only for food and board. Other states permit veterinary and farrier expenses, extra care costs, and training costs to be included. Yet other states permit a lien to attach for “all costs and expenses” set forth in a written contract. It’s important to know lienable costs, and that you stay within those boundaries.
Those costs must also be itemized per horse. The stable owner can rely on its written contract for monthly costs of grain, hay, boarding and standard training fees, but it requires detailed backup for veterinarian, farrier and if applicable, “extra costs” services. If a barn utilizes bulk purchases such as wormers, supplements, etc., the stable must relate an invoice to a pro-rata formula and documentation verifying the date(s) when that article was given to that horse. Undocumented expenses will be disallowed.
3. Some statutes permit liens not only on the horse, but also on foals of that horse and personal property stored on the premises. This can include tack, bicycles, carts, show attire, etc. Again, read the statute!
4. Most states require you to retain physical possession of the horse to “perfect” your lien. If the horse is gone, so is your lien. This requires you to put the owner on notice of the lien and to ALSO prohibit (in writing) the owner from removing the horse while the lien is declared. This can be problematic, where owners often try to “spirit” the horse away without payment OR permission. Seek legal counsel on how you can prevent this. Include a contract clause stating the unauthorized removal of a horse that has been liened constitutes a trespass to property. Notify the client in writing again, at the time the lien is declared, that removal without satisfaction of the debt is prohibited and will be treated as a trespass. Also consider relocating the horse in various stalls or in a more secure area of the stable until payment is resolved.
Non-possessory states permit the lien to follow the horse—regardless of location—until satisfied.
5. “Self-enforcing” states contain statutory procedures permitting perfection and foreclosure of the lien without resorting to court. It’s critically important that EACH step of the process is followed carefully and its recommended legal counsel be secured for the first time you try to lien a horse. After you’ve done a few, you’ll know the process.
“Judicial enforcement” states require a court action to commence the process.
6. In a self-enforcement state, you can begin the process and sale, and arguably collect your money, more quickly and efficiently as you don’t have to go through the court. The downside is that any downstream buyer is purchasing a horse without papers. This might not be an issue for a grade horse, but can present substantial issues in securing registration papers for a more valuable animal.
Conversely, in a judicial enforcing state, the process is longer and more costly, but you receive a court order which in turn can be filed with the Breed Registry to affect a transfer of papers. This issue alone causes many stable owners and trainers in self-enforcing states to nonetheless utilize a judicial proceeding simply to obtain this order. PLEASE NOTE: the stable owner and their attorney must be sure, however, to request the court in their petition to order not only the sale of the horse, but also authorize in that order the Breed Registry to transfer registration papers to any third party buyer of the animal in that order.
7. This depends on your state. Some statutes permit sale to the highest buyer. However, most statutes require the sale be done at “private auction”. You MUST comply with the exact wording of the statute.
8. There’s no room for error here. Where you are “selling” someone else’s property, you must do it correctly. Any mistake potentially exposes you to a “conversion” claim, that is, the interference with another’s property rights. Conversion claims include actual plus punitive damages. Legal assistance when first utilizing the lien is highly recommended.
With some practice, the savvy stable owner will learn to effectively employ the agister lien as a collection tool. In most cases, the lien notice will shake loose the payment.
Denise E. Farris practices equine, insurance and veterinary law in the Kansas City area. “AV” rated in Martindale-Hubbell, she has been named “American Law Firm of the Year – Kansas” by Corporate Vision Magazine; “Best of the Bar” by the Kansas City Business Journal, “SuperLawyers”, “Top 100 Lawyers Kansas” ,and “ Top 50 Female Lawyers Kansas”, by Kansas City Magazine; “Preeminent Women Lawyers” by Martindale Hubbell, and Equus Magazines “Leaders in Equine Law”. In addition to writing numerous articles, Denise has been a featured speaker at local, state and national symposiums, including the National Equine Law Practitioner’s Conference, the AAEP Hambletonian Conference, the National Farrier’s Convention, the National Multiple Trail Users Conflict Symposium and the North American Trail Ride Conference. She’s an avid equestrian who competes in endurance and competitive-trail riding.
DISCLAIMER: This article provides general coverage of its subject area. It’s provided free, with the understanding that the author, publisher and/or publication do not intend this article to be viewed as rendering legal advice or service. If legal advice is sought or required, the services of a competent professional should be sought. The author and publisher shall not be responsible for any damages resulting from any error, inaccuracy or omission contained in this publication. © Denise E. Farris, Esq. All rights reserved. This article may not be reprinted or reproduced in any manner without prior written permission by the author. Contact: The Farris Law Firm, LLC, 20355 Nall Avenue, Stilwell, KS 66085; Telephone 913-766-1262; E-mail, [email protected].