Equine Law Blog

“Free Leases” Are Not Free

In these challenging financial times, more and more horse owners have entered into arrangements they call “free leases.” No legal dictionary, to our knowledge, recognizes the term “free lease,” but in the horse industry it has come to mean a horse that is leased to another with no lease payment to the owner (the lessor) as long as the lessee provides the horse care and attention.

In our experience, lessors (horse owners) usually enter into these arrangements to avoid costly horse care. In an effort to save money, lessors rarely insist on contracts. Not surprisingly, disputes arise. For example:

• The lessee might view the horse as a “gift” and refuse to return the horse to the lessor. Or, the lessee might sell the horse, with no notice to the lessor, and pocket the proceeds.

• The lessee might view the horse as “abandoned” merely because the lessor did not visit the horse.

• The lessee might expect the lessor to pay for some or all of the ongoing maintenance expenses such as farrier or veterinary attention and then send a large bill to the lessor later on, demanding payment.

• The lessee might abandon the horse at a boarding stable, which could prompt the stable to take drastic action under its stablemen’s lien law, including sale of the horse, but with no notice whatsoever to the lessor.

• The lessor might try to take back the horse, only to learn that the lessee (and the horse) have moved away and cannot be located.

What do these disputes have in common? Almost always, the parties had no written contract. Lease disputes often create very complex legal issues, the resolution of which can be tremendously expensive. Plan ahead and try to prevent disputes by using well-worded contracts, and only “free lease” your horse to someone you trust.

Categories: Boarding, Contracts