Legal Focus

Should You “Half Lease” Your Horse to Save Money?

By Julie I. Fershtman, Attorney at Law

What is a “half-lease” (sometimes called a “share board” arrangement)? Don’t ask any lawyer since the term won’t be found in law books (except for this author’s Equine Law books). These arrangements enable horse owners to continue use of their horses, though limited, while another person shares use of the horse. Horse owners sometimes consider these arrangements as a way of sharing expenses of boarding and care. The problem is, these arrangements can create problems and unintended consequences. This article discusses legal aspects of “half lease/share board” arrangements. “Half-Lease”/“Share Board” Arrangements

These arrangements usually involve a horse owner agreeing with another person to divide days of the week for riding the horse. At all times, the horse remains boarded at the same stable.

Risks

What can seem like a simple and riskfree arrangement can be just the opposite. Before agreeing to enter into a half-lease arrangement, consider the risks involved. Here are some of them: • Improper Use of Your Horse by the Lessee. By entering into a lease with another person (called the “lessee”), you are taking a risk that the lessee might not use your horse as you expect. If the horse, for example, has restrictions against jumping, what if the lessee jumps the horse anyway? What if the lessee uses her own tack or equipment that do not fit the horse properly and make the horse sore? What if the lessee allows others to ride the horse, but those people have insufficient experience, not only putting themselves at risk but also setting back the horse’s training? • The Other Person Fails to Pay. In these arrangements, the parties usually agree to share the horse’s maintenance expenses such as boarding fees, farrier, and routine veterinary care. But what if the lessee fails to pay his or her share of the bills? • The lessee suffers a serious injury while riding or handling the horse. During a lease or “half-lease” arrangement, the fact is that lessors still own the horse during the lease arrangement. As owners of the horse, lessors run the risk of being targeted in a lawsuit if the lessee is injured (or worse) while riding or handling the horse. Is the lessor ready for the expenses and risks associated with defending against a possible lawsuit? • The horse injures someone other than the lessee. While the lessee is riding or handling the leased horse, there’s always a risk that the horse could bite, kick, throw, or injure someone. Certainly, injured people might target their claims or suits against the lessee, but because lessors own the horse, lessors could also be targeted, as well. Is the lessor properly protected against this risk? Will the lessee hold harmless and protect the lessor? • The lessee seriously injures the horse.

Emergencies could arise from the “halflessee’s” use of the horse, resulting in huge veterinary bills. For example, the horse might receive a severe cut during a trail ride or come up lame after a particularly strenuous ride. If any of these should happen while the “half-lease” arrangement is in effect, and if the problem is linked to the lessee’s use of the horse, who will pay the veterinary bills?

Risk Management These and other risks in horse sharing arrangements demand careful attention and planning. Here are some options for lessors to consider in “half-lease” arrangements:

Liability Insurance

Horse owners could consider buying a policy of liability insurance that is designed to protect them if the lessee, or anyone else, brings a claim or a suit against them based on the horse’s actions. One type of insurance commonly available is a Personal Horse Owner’s Liability Insurance policy. Horse owners should discuss this, and other advisable coverages, with their insurance agents. When applying for coverage, horse owners should explain that the horse is subject to a lease arrangement so that the insurance company can evaluate whether this impacts, or prevents, coverage.

Waivers/Releases

(Where Allowed by Law) Courts in most states have shown a willingness to enforce releases of liability as long as they are properly worded and signed. Where allowed by law, lessors can ask lessees to sign a carefully worded release of liability (sometimes called a “waiver”) that conforms to applicable law. Lessors might also want lessees to have all persons of legal age, before handling or riding the horse, sign a different release form in which the signer agrees to release the lessor, and

possibly the lessee, from liability as the applicable state law allows.

Liability waivers/releases are complicated documents that require special attention. Over the years, my books and articles have explained how these documents work and what makes them fail. Because states differ on requirements for these documents, avoid “one size fits all” forms.

Contracts that protect lessors can also include carefully worded indemnification clauses (where allowed by law) that would provide, with proper language in which the lessee agrees to protect the lessor and possibly others, hold them harmless, and pay legal expenses and costs if the lessor is sued because of injuries or damages the lessee caused. Indemnification clauses can be complex; discuss them with your attorney.

Contracts

Contracts for “half -lease” arrangements can include, at a minimum: • When the arrangement begins and ends (and methods of terminating it) • Uses of the horse and restrictions • Payment of routine and non-routine expenses • Liability waiver/release and indemnification language (where allowed by law) • Equine Activity Liability Act language (depending on state law) With careful planning and properly drafted contracts, parties to “half-lease”/share boarding arrangements, and the horse, could be happy for a long time. This article does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable attorney.

About the Author: Julie Fershtman, one of the nation’s most experienced Equine Law practitioners, is a Shareholder with Foster Swift Collins & Smith, PC, in Michigan. She has successfully litigated equine cases in 18 jurisdictions nationwide and has tried equine cases in 4 states. She is listed in The Best Lawyers in America and received the American Bar Association (ABA) “Excellence in the Advancement of Animal Law Award.” Her speaking engagements span 29 states. Her new 372-page book, Equine Law & Horse Sense, has just been published by the ABA and is available for purchase! For more information, please visit www.equinelaw.net.

into your curriculum. Trail rides are one way you can do this as well as being great learning experiences, but there are many others activities too. Are there people in your area that do yoga or meditation classes, who are very knowledgeable herbalists or gardeners? You might offer them a natural space to hold some sessions. Since you and your people are already present, there can be an easy flow into something that may help all. Perhaps others in the area will join these classes, and become interested in lessons.

It shouldn’t take a crisis for us to realize what’s important, but it usually does. Let’s not ignore or forget what we have suffered to learn. Let’s use it to improve our lives, the lives of those around us, and to be better people. We have all been in this together, and, if we continue to work together, we will all be fine when it’s well and truly over. ➢ Cameo’s Cauldron cont’d from page 30

About the author: Cameo Miller is a Masters-level clinical psychologist and a Level IV ARIA Certified Instructor based in Michigan. She is a member of the ARIA Evaluation Panel and National RidingInstructors Convention Staff.

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