Opening and Operating a Horse Boarding Facility

Story and Photos By Kerry O’Neill Irwin

Opening a boarding facility can give an equine industry professional the opportunity to take their career to the next level or give a horse farm owner the opportunity to generate additional revenue. However, before embarking on this venture, it is crucial to understand the legal landscape. This article addresses some of the key legal considerations so boarding facilities can proactively address legal requirements, mitigate risks, and establish a solid foundation for their facility’s success. Creating

As a first step to mitigating risk or liability, an equine professional running an equine business should create a separate legal entity. An LLC is often preferable because it offers both the tax advantages of a partnership and the limited liability protection of a corporate entity. Other ownership types may make sense for certain individuals or certain situations — an accountant and an attorney can both be a good resource to help determine the entity that’s right for a farm owner or operator from both a tax and legal perspective.

The success of a boarding farm can be highly location dependent. A good farm needs the acreage to support the number of horses that will be on the property, the facilities that a particular discipline requires, proper protection from the elements, water access and proper drainage, and it needs to be zoned properly for the intended use. An experienced horse farm real estate broker can provide valuable guidance here, as a specialist will be familiar with the specific issues that arise with respect to a boarding operation. If the operator is leasing a property, he or she should ensure that these rights are passed on through the lease. Documenting the rights and obligations of the parties on the front end will help both parties understand their respective responsibilities.

Addressing Risk with Insurance

The right insurance can also help minimize the risks involved with operating a boarding facility. Farm policies generally protect the buildings and property on the farm from damage, but they may not cover the property of boarders or riders on the farm. To help close these gaps, an umbrella policy can provide additional liability protection. A boarding farm operator should establish a relationship with a licensed insurance broker who can make sure that the facility has the proper industry-specific insurance to mitigate the specific risks of their operation.

Hiring Workers

A boarding farm needs good employees, but hiring employees also introduces additional liability risks to the operator. In many states, employers are not required to provide workers’ compensation insurance for independent contractors, and independent contractors can often be exempt from other employment laws. Whether a particular worker is an employee or an independent contractor largely depends on factors such as the amount of control the boarding farm has over that worker. It is extremely important that a boarding facility classify its workers correctly, so that it doesn’t incur penalties or expose itself to a claim brought by a worker for unpaid overtime or other benefits.

The labor pool in the horse industry can be incredibly diverse, particularly as many horse farm workers immigrated to the United States. As a result, immigration laws can factor into horse farm operations. Given the complexities of employment laws, a boarding operator would be wise to seek the counsel of an employment law attorney and, if needed, an immigration law attorney prior to making hiring decisions.

Equine Liability Acts

Most states protect property owners and other horse industry professionals from certain inherent risks from equine activities through equine liability statutes. These statutes acknowledge that there are certain inherent risks associated with riding or working with horses and provide a framework within which an equine activity sponsor can be insulated from liability for injuries to participants. The exceptions for this limited liability usually involve the failure to adhere to a certain standard of care, such as providing faulty equipment, failing to provide a suitable horse for the level of the rider, or otherwise willfully or wantonly disregarding the safety of a participant. In addition to providing notice of the statute to participants in the form of a posted sign on the premises, usually in the form of a posted sign with required statutory language, many states, including Kentucky and North Carolina, also require sponsors or professionals to include that language in contracts, as well.

Boarding Contracts and Waivers

Too often, business relationships in the horse industry are sealed on a handshake, but a good boarding contract will help a boarding farm operator manage the risk of boarding others’ horses on their property. A typical boarding agreement will cover the scope of services to be provided by the facility, each party’s obligations, and the allocation of risk between the parties. Recommended provisions include specific details as to the boarding fees and payment timing, whether any additional services such as blanketing or grooming are passed through or included in the fees, and the rights of the facility of the client fails to pay.

In addition to a boarding agreement, boarding facilities should also have a liability release agreement that all equine activity participants and observers are required to sign. Liability releases discourage participants from suing a facility and protect the facility in the event of a lawsuit. The requirements for a release, as well as any limitations on their enforceability, are very state specific, and an area where an equine lawyer can provide guidance.

Statutory Liens and Remedies for Unpaid Boarding Fees

One of the major risks that a boarding farm operator assumes when they take a new boarder is that the boarder will fall behind on boarding fees. Most states protect boarding operations and others who board or take care of livestock through statutes creating what is often called an “agister’s lien,” or a “stableman’s lien.” These liens secure payment for farming-related services, which includes boarding fees. While some states, like Kentucky, allow for a “self-help” remedy where the boarding facility has the right to sell the horse outside of a judicial process, facilities that wish to expand their rights beyond those found in the agister’s statute should provide additional contractual enforcement rights in their boarding agreements.

Summary

By addressing these legal considerations proactively, aspiring horse boarding facilities can navigate the complexities of opening and operating their business successfully. Seeking guidance from legal professionals well-versed in equine law can ensure compliance with regulations and establish a solid legal foundation for the facility’s operation.

Kerry and George

Moore & Van Allen PLLC Member Kerry O. Irwin provides services to horse industry par�cipants by drawing on her experience represen�ng clients of all equine disciplines in the sale, purchase, and leasing of horses of all breeds and disciplines, as well as advising equine non-profits, horse show operators, boarding, training, and breeding operators, owners, equine veterinarians, and riders. A life-long par�cipant in the horse industry, Kerry’s background and knowledge of the equine industry enables her to an�cipate challenges and steer clients toward solu�ons. Currently a horse owner ac�ve in the North Carolina hunterjumper world, Kerry brings her strong transac�onal background to equine transac�ons of all sizes. She can be reached at kerryirwin@mvalaw.com.