Half Lease – Whole Problem

By Julie I. Fershtman, Attorney at Law

The words “half lease” seem unique to the horse industry. In law school, this lawyer never heard the phrase mentioned, and the authoritative legal dictionary, Black’s Law Dictionary, nowhere mentions it. Yet, people in the horse industry, with greater frequency, are entering into arrangements they call “half leases” through which one or more persons (the “lessees”) pay a horse owner (the “lessor”) for shared use of the horse. “Half lease” arrangements might seem budget-friendly, but without careful planning, they could be quite the opposite as disputes could follow.

Paying for Routine Upkeep
Without a written agreement specifying who pays routine expenses, such as veterinarian and farrier, and how these expenses will be split, the parties may be left to guess. Also, if one party to the half lease wants costly attention for the horse, such as equine massage or acupuncture, can that party automatically obligate the others to share the cost?

You Injured the Horse – Can You Walk Away?
If the leased horse becomes injured while under the lessee’s control, who must pay ongoing expenses for veterinary treatment? What if the time frame for treatment, such as a lay up, is longer than the expected length of the lease?

Can the lessees be relieved of their obligations?

Moving the Horse
A party to the arrangement might want to haul the horse out of state, such as to a lengthy show circuit, which would deprive the others in the “half lease” arrangement of their time with the horse. What is an equitable arrangement?

Liability Surprises
All persons in the half lease arrangement could be at risk of liability if the leased horse injures someone while the arrangement is in progress. For example, let’s look at the scenario of a lessee being thrown from the leased horse, and the horse thereafter running loose into the road, colliding with a motor vehicle, and injuring a motorist. The collision also injures the horse.

  • Injured Motorist v. Lessee and Lessor. The injured motorist might file suit against the Lessee (claiming he or she negligently handled the horse, which caused it to run loose) and the Lessor (claiming, for example, that the Lessor negligently entrusted the horse to the Lessee).
  • Lessee v. Lessor. The Lessee might potentially sue the Lessor under the theory that the Lessor, who owned the horse, failed to disclose known dangerous propensities that led to the horse throwing the Lessee and running off.
  • Lessor v. Lessee. Possibly the Lessor might sue (or countersue) the Lessee, claiming that the Lessee is responsible for all damages caused in the accident because the Lessee misrepresented his or her riding experience, and the Lessor relied on the misrepresentation in allowing the half lease arrangement to proceed.

Could these legal battles occur? The answer depends on the circumstances and the applicable law, but the risk is present. The parties to half lease arrangements have every incentive to protect themselves by communicating up front, using detailed contracts that address foreseeable issues and risks, and considering appropriate insurance.

This article does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable insurance agent or attorney.

About the Author
Julie Fershtman, a lawyer for nearly 31 years, is one of the nation’s most experienced Equine Law practitioners. A Shareholder with Foster Swift Collins & Smith, PC, based in Michigan, she has successfully handled equine cases in 17 jurisdictions nationwide and tried equine cases in 4 states. She has drafted thousands of equine industry contracts and is a Fellow of the American College of Equine Attorneys. Her speaking engagements span 29 states. For more information, visit www.equinelaw.net and www.equinelawblog.com.