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| Half leases?; Please educate me? | |
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| Tweet Topic Started: Jan 28 2008, 06:48 AM (576 Views) | |
| JointVenture | Jan 28 2008, 06:48 AM Post #1 |
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Shunnnnn the unbeliever. Shunnnnnnnnnnnnnnnn.
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How do half leases typically work? I've gleaned some information from other posts, and apologize if this has been discussed ad nauseum! How are they usually structured? Is it typical to have an annual lease fee? I'm assuming something like 1/2 of the full lease fee, which would work out to be 1/6th of the horse's value? So, for a 60k horse, that would be 10k? Plus 1/2 of the expenses like board/farrier/vet? Does anyone have a contract they can share? What are some of the usual terms? Here is my situation. My sister and I own our horse together. We are both re-riding mothers of young children who can't be at the barn 6 or 7 days a week. Our arrangement has worked well. Unfortunately, my sister has been having a major confidence crisis so we had decided to sell him. In the meantime, a teenager at the barn picked up my sister's riding time to help me out. Trainer approached me this week, and teenager's family wants to buy my sister's half of the horse. The girl already has a horse that is on stall rest and the family can't take on the full expense of a second horse. The shared ownership scenario with a non family member sounds much too fraught with potential conflict, so I am thinking of counter-proposing a half lease. I just want to have it well-considered before I even go there. Any input would be greatly appreciated!
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| vxf111 | Jan 28 2008, 07:03 AM Post #2 |
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You're BANNED!
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Lisa, I have always done it the following way- determine what the lease fee would be, split that into a monthly amount, combine that with half of board/shoeing/misc, and then charge that monthly. I think a "lease fee" plus trying to actually split expenses each month would be a nightmare. Not to mention, you don't want to be screwed if the other party "forgets" to pay their half of the farrier etc. You'd much rather have them pay the set fee at the beginning of the month and then you pay the bills as they come due. So, if the horse is worth $12,000 and 1/3 of that value is $4000, divided into 12 monthly payments it's $333/month. Say board is $600/month, shoeing is $200, and other miscellanous expenses are $100/month. Then the lessee's monthly half lease fee, due on the first of the month, is $333+$300+$100+$50= $783, and you pay ALL the bills and retain ownership of the horse. That's how I've always preferred to handle it. I agree that a half lease makes so much more sense than having someone else buy your sister's half. Being in a joint venture with someone with whom you might not see eye to eye in the future is not the greatest idea. I have a half lease agreement that you could use as a starting point, I can also help write you one if you give me the terms of the arrangement. Mine is personalized to my situation, but you could make changes to it. Let me know if you want it, and where to email it. |
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| TarynJ | Jan 28 2008, 08:07 AM Post #3 |
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Guiding your way to Candy Mountain, since 1873.
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In my experience, 1/2 leases are usually 1/2 "free" leases, and it's just calculated based on the horse's expences. I've never heard of a 1/2 lease with a fee attached... |
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| vxf111 | Jan 28 2008, 08:11 AM Post #4 |
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You're BANNED!
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I've done a half lease with a "fee" attached. Granted, less of a fee than if it was a full lease-- but a fee nonetheless. I've known other people to do it this way too. Why should something nice be free (obviously, awesome if you can find something nice for free-- but why not expect to pay for half of the use of something nice?) |
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| Lion1024 | Jan 28 2008, 08:15 AM Post #5 |
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It'll be an adventure! We're going on an adventure!
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I've also never heard of a half lease with a fee attached. Sounds sort of odd to me. If I'm paying a fee to use your horse, as well as 1/2 the expenses, as well as having to work around your schedule of when you want to ride, I'm not sure where the benefit is. A 1/2 lease to me is an owner that doesn't have the time to ride enough and lets me ride 1/2 the time to cover 1/2 the expenses. If I'm paying a fee on top of all that, I'm going to do a full lease or buy my own horse. I'm not sure I explained all that well enough... I guess what I'm trying to say is that a typical half lease does NOT have a lease fee associated with it. But it does have 1/2 the expenses (board, farrier, vet, dentist, etc.) Shows I always paid for completely unless the owner was also showing that day/show. Doesn't mean you can't do something different if they are willing to pay a fee though. |
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| vxf111 | Jan 28 2008, 08:24 AM Post #6 |
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You're BANNED!
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As I understood it, JV was actually going to take a backseat to the lessor-- and not vice versa. She posted previously that the lessor is a competitive junior whose horse is hurt. JV was going to let the lessor have the first pick of days/shows etc. So it would be pretty much equivalent to a full show lease, except JV would hack a few days at home. For a situation like that, when the lessor is getting to do the showing, pick the days, get all the glory-- it makes perfect sense to me that the lease be for more for more than just half of expenses. These people are offering to buy half the horse-- I think they're looking for more than just 3 days/week of hacking at home on an average horse. They want a horse for the junior to go and show. |
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| vxf111 | Jan 28 2008, 08:24 AM Post #7 |
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You're BANNED!
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Oh, and Katie... you've heard of this before (even if you didn't know that was what was going on). Cosmo... |
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| 2hsmommy | Jan 28 2008, 09:21 AM Post #8 |
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It'll be an adventure! We're going on an adventure!
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I can understand both, a half lease with a fee and one without a fee. Does that help? :lol: |
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| Delia | Jan 28 2008, 09:28 AM Post #9 |
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You're BANNED!
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I currently am half-leasing, and pay half of his expenses (board, farrier, routine veterinary, dentist, etc.). I don't pay a lease fee on top of that. And if something extraordinary happened vet-wise, e.g., colic surgery, I am not expected to pay half of that. For that, I get to ride him 3 days a week. Fortunately for me, no one else holds the other half of the lease because he's green and the owner just wants him to have the consistency of one person right now. I'm also allowed to show him whenever I want, at my expense. If he was a made horse, I'd be expected to full lease him in order to show him, and probably would have to also pay a lease fee as well. But since he's green and the owner is encouraging me to put show miles on him, she is content to let me just half-lease him. That being said, depending on the capabilities of your horse and what the girl wants to do with it, some sort of lease fee might be appropriate. |
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| soloudinhere | Jan 28 2008, 09:29 AM Post #10 |
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I Visited Candy Mountain and All I Got Was This Lousy Incision
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I could see a lease with a fee associated with it, but the 1/3 of the horse's value thing always applies to a FULL lease and it seems overpriced for a half lease. I'd think that half that would be more normal. A fee is fine, but paying 1/3 of the horse's value per year for a half lease seems STEEP to me. My horse is $200/mo on top of half expenses, but that $200 buys you 4 lessons if you want them, or it's a fee if you don't. |
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| onwego | Jan 28 2008, 09:55 AM Post #11 |
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You're BANNED!
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I have somebody who is looking to do a half-lease on my horse right now. She would just be in charge of paying for half of board, farrier, minor vet bills, etc. I'm not charging any fees on top of that. Does anybody have any good contracts that they would be willing to share to help me write up mine?? |
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| vxf111 | Jan 28 2008, 09:59 AM Post #12 |
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You're BANNED!
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Just for the record, I wasn't necessarily saying that the fee SHOULD be 1/3 horse's value. Just that I think it's fair to charge a fee of some sort, in addition to half costs and expenses. I guess what is appropriate would depend on what the lessee wants to do and what value that has to the owner. If someone wanted to lease my horse to show a LOT, I sure as heck would want more than if they were going to walk him on trails. That pounding is worth something. I suppose I'd be willing to charge less for good mileage in my discipline of choice etc. It really depends on the sitation. |
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| soloudinhere | Jan 28 2008, 05:02 PM Post #13 |
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I Visited Candy Mountain and All I Got Was This Lousy Incision
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I can photocopy mine that I signed on my horse for you if you want. |
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| onwego | Jan 29 2008, 09:01 AM Post #14 |
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You're BANNED!
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Can you do that? That would be awesome! |
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| MyGiantPony | Jan 29 2008, 09:38 AM Post #15 |
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Is the meadow on fire?
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Does anyone require the half-lesee to insure the horse? I get some odd looks when I specify that, but if I'm letting someone go off and show my horse, I want her insured. |
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