4 things to consider when leasing a horse

Horse owners are increasingly considering leases to share the joy and responsibilities of horse ownership. These practical arrangements are commonly used by owners who spend periods of time away (eg. FIFO or frequent flyers), for childrens’ ponies and paddock companions or if a change in circumstances doesn’t allow the owner to spend as much time with the horse as required. Lease arrangements can take different forms, including:

• Off property: perhaps the most common type of lease, this allows the person who is renting the horse (lessee) to take the horse away from the owner (lessor) and look after it on their own property or at an agistment centre. Generally, the lessee is responsible for the costs and responsibilities of the horse for the duration of the lease term.

• On property: usually a part lease where the owner and lessee share the costs and responsibilities, but the horse lives on the owner’s property and the lessee is permitted to come and ride an agreed number of times per week or fortnight.

• Lease with option to buy: the lessee (potential buyer) makes periodic lease payments to the lessor (seller) which go toward the total agreed purchase price of the horse. These agreements are more complex than straightforward leases, and it is highly recommended that a lawyer draft or review the terms of the agreement due to the myriad of considerations and potential pitfalls.

• Breeding or competition: leases for brood mares or for competition purposes have highly specific and unique terms which require a special lease agreement other than those described above. In circumstances where a professional rider is competing and training the horse, a training agreement may be the most appropriate contract to govern the relationship between the parties.

It is our responsibility to ensure that our horses are cared for and protected to the highest standard. Prudent and professional horse people will also comply strictly with relevant laws and protect against risk. Even arrangements that are considered informal, such as sharing a horse with a friend, are susceptible to the risk of misunderstandings, which could lead to formal disputes. A well-drafted horse lease agreement clarifies all aspects of the arrangement up front.

1. Disclosure

The horse’s health and soundness conditions, as well as any habits, vices or behavioural issues, should always be fully disclosed in the written lease agreement. Lessors have a duty to warn of any dangerous habits the horse has that they are aware of. For example, if the owner knows that the horse has a propensity to kick, they should specify this information in the lease agreement. Failure to disclose these issues could increase the owner’s risk of a negligence action if the lessee is injured due to the undisclosed vice. Liability and indemnity clauses should be drafted or reviewed by a lawyer, given their complexity, highly technical nature and importance.

2. Suitability and purpose

Waivers and clauses limiting liability for personal injury are useful and recommended, however cannot exclude liability for negligence. Negligence is essentially acting recklessly or carelessly, resulting in harm. The owner should consider whether the horse is suitable for the lessee, given their level of experience and intended pursuits. For example, if the owner knows the horse gets ‘hot’ and is prone to pigrooting when jumping, a risk conscious owner may decline to lease this horse to a novice rider who wants to do showjumping at home. To reduce risk, owners may give preliminary instructions on how to ride the horse and depending on the experience of the rider, record certain activities as not being permitted in the agreement (for example, no jumping >1m high).

3. Accident & emergency protocol

Horse ownership involves the very real risk that things will go wrong. You can best protect your horse while it is on lease by ensuring that the lease agreement steps out precisely (1) what the lessee must do in the event of an accident or emergency, and (2) who is responsible for the cost of treatment. Having a clear step-by-step plan set out and understood by both parties can contractually oblige the lessee to call the nominated veterinarian and contact the owner, amongst other things, so that your horse can be assessed and treated as soon as possible.

4. Terminating a lease

Circumstances that give rise to termination should be considered and drafted carefully. Generally, a lease agreement should allow for either party to terminate the agreement when (1) the other party has breached the agreement (for example, failed to pay the agreed lease fee on time); or (2) the lease term has come to an end; or (3) for any other reason. Terminating “in your absolute discretion” will generally require a longer notice period to ensure fairness for both parties, but is an important inclusion. Perhaps the owner isn’t satisfied with the way the lessee has been riding the horse, or is concerned about the level of care the horse is receiving, but cannot prove there has been a breach of the agreement – the owner can give notice of termination and collect the horse at the end of the agreed notice period with the inclusion of this clause.

There are many considerations from a practical and legal perspective when preparing a horse lease agreement. While the above is far from an inclusive list of everything that should be covered, it addresses some key issues, and demonstrates how important it is to have a well drafted contract in place that considers all aspects of the arrangement, some of which you may not have thought of. Using an agreement found on Google is not recommended, as many do not cover all the relevant issues for a horse lease, or are poorly worded which at its worst, could render the agreement unenforceable. Contracts prepared by lawyers are becoming increasingly accessible for the equestrian community, to protect owners, lessees, and most importantly, the horses. Our equine friends deserve the very best that we can give them.

*Information is general and not legal advice.

This article first appeared in Hoofbeats magazine Vol 44-2 August/September 2022.