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Leasing Tips, Free and Otherwise

A free lease is a common arrangement in the horse world. Typically, it is a deal whereby the owner lets someone use the horse, and in return, the user pays the horse's board, vet, and farrier costs. Everybody wins, right? Until something happens, that is. Parties involved in leases, particularly free ones (because of the informality) run into problems which often causes the parties involved to end up in a lawyer's office. Here's how to head that visit off:

Fix the End of the Line: A free lease that has no termination point is a recipe for trouble. At some point, the person paying the bills for the horse will cross over the line from feeling like a lessee to feeling like an owner, even if that was not originally contemplated. If there is no termination to the free lease, a court might even agree with that person, depending on how the conversation went between the parties. If the arrangement's discussion or writing looks like a gift, (E.g.: You can have my horse if you pay board) then the owner could be out of luck. So fix the end of the line, and do it in writing.

Spell out the Horse's Condition at the Beginning of the Lease: The lessee should get in writing the horse's condition at the beginning of the lease, via a veterinarian's pre-purchase exam. Otherwise, the lessee could get tagged as being responsible for a condition that the horse arrived with. These exams are not that expensive, under $200 typically, and will protect the lessee. Many latent conditions can surface during these exams, for example, vision problems or incipient lameness.

Discuss Insurance Issues: Discussing who is going to carry the horse insurance during the lease is important. Do not assume coverage without this discussion. Also discuss who is going to call the insurance company in the case of a possible claim. Insurance coverage might rest on quick notification, and so if the owner and the lessee have not worked this out in advance, then a claim could be defeated if notice is not given timely, even if otherwise coverage exists.

In Case Disaster Strikes: Discuss who is going to be responsible in the event of a major medical disaster with the horse. What if the horse colics? Who decides if the horse is to go to the hospital, and who is liable for those veterinarian bills? Is there an outside limit that will be spent? If the lessee has counted on the horse's availability and would be harmed by unavailability, would the lessee have any rights in these decisions?

With attention to these details, a horse lease can run smoothly for all concerned. In the event matters do not go smoothly however, contacting a lawyer, (and preferably a lawyer who has equine law experience) sooner rather than later will help prevent much collateral damage to horse owners and lessees, and, most importantly, the horse involved.

Kathleen A. Reagan, Esq. is an equine attorney practicing in Braintree, MA, available at www.kathleenreaganlaw.com, has developed a course in equine law at www.concordlawschool.com, and is co-founder and Vice President of QueryHorse, the largest horse information resource on the Internet.

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