Over the past few months, we’ve taken a long look at the process of purchasing a horse, exploring various options, considerations and pitfalls. While each purchase is unique in its own right, one fact remains the same—buying a horse is expensive! It’s not just the purchase price, but everything that comes with horse ownership…vet bills, farrier fees, boarding costs, and so forth. It’s quite a commitment. But what if you don’t have that much extra income to pour into such a long term investment? Are you forever barred from the joys that come along with horse ownership? Not necessarily.

Some of you may already be familiar with the option of leasing a horse. It has become increasingly popular for both owners looking to defray expenses and would-be buyers looking to avoid them. Leasing, however, does have its pro’s and con’s, and there are a few points that you should be aware of from a legal point of view.

There are basically two types of leases: a “full lease” and a “share lease.”

A full lease is one in which the lessee (the person leasing the horse) pays all horse-related expenses, such as boarding fees, feed costs, farrier costs, routine veterinary care, tack expenses, and so forth. In exchange, they get to use the horse whenever they want. In other words, there are generally no restrictions on riding times and special events, such as shows and competitions. In fact, with most full leases, the horse is not kept on the owner’s property, but is boarded at a location of the lessee’s choosing. It’s the closest you can get to ownership without actually owning the horse. Keep in mind, though, that frequently, aside from horse-related expenses, full leases include leasing fees as well. These fees are generally about 25 to 30 percent of the horse’s value per year.

Logically speaking, a full lease might seem like a losing proposition. After all, you would pay all the same expenses as if you owned the horse plus an additional fee, and in the end, the horse is not yours, so you can’t even sell it if you wanted to recoup your expenses. In fact, in the long run, a full lease can actually be more expensive than a purchase, year per year. So why do it? For one thing, full leases are limited in duration (usually a year), so you are not committed to one horse for more than a certain period of time. This can be advantageous if you are just not sure about horse ownership, and you want to “try it out” for a bit. In this regard, a full lease can include an option to purchase at the end of the lease, which could take into consideration the extra fee. In addition, the cost of a one year lease is still less than the full purchase price, even if it would add up to more over time. Full leases are also ideal for the owner who has a valuable horse for which they want some exposure (i.e. show off its bloodlines or gain recognition in the competitive arena). The owner can lease the horse to an amateur rider for a year or so. The rider gets experience and access to a spectacular horse that would otherwise be beyond his reach, while the owner gets the exposure he wants for future competition, breeding, or sale prospects.

A share lease is more common among recreational riders. As the name suggests, the owner of the horse and the lessee share the expenses associated with horse ownership. Generally, boarding, feed, veterinary, farrier and other expenses are split 50/50 (although even this can vary depending upon the circumstances). In exchange, the lessee is given certain days and times that they can have access to the horse. It’s usually three or four days a week during daylight hours.

Generally, in a share lease, the horse remains at the owner’s boarding facility. Overall, the share lease is more restrictive for the lessee, but it is also less expensive than a full lease. A share lease is also more versatile in that it can be tailored to the specific needs of the parties involved.

With both types of leases, it is absolutely essential that the parties set forth in writing their rights, responsibilities and expectations. There are many “form” leases out there on the internet, ripe for the picking, but while they are a good starting point, the terms specific to your particular lease arrangement need to be spelled out.

Of course, the basics must be included, such as the names and addresses of the parties to the lease, the length of the lease, the terms of payment, and the identity (including registration information) of the horse, but there are other less obvious points that need to be considered. For instance, consider the following:

• Will there be an option to purchase at the end of the lease term?
• Will there be opportunity for renewal at the end of the term?
• If someone wants to break the lease before the term is over, can they, and under what circumstances?
• While routine veterinary costs are included, what happens if extraordinary veterinary measures are required?
• What happens if the horse becomes ill or injured? Can the lease be broken?
• In a share lease, can the lessee or owner change their designated days around if there is a special event or other reason, and what is the procedure for doing that?
• Is travel out of state permitted?
• Are others permitted to ride the horse (especially children)?
• Is the lessee entitled to use the horse for profit (i.e. give riding lessons or trail rides to others)?
• Is breeding permitted? (If so, there should be a separate breeding contract setting out the details of that arrangement—a topic for another time perhaps).

So, as you can see, there are important considerations that should be addressed in any lease agreement. Simply signing a form agreement and hoping that you can work out any problems that arise is a recipe for litigation.

As a final note, regardless of whether you are entering into a full lease or a share lease, you should always have a vet check performed (and any problems noted in the written lease). You should also obtain your own theft and mortality insurance. This way, if the horse should be stolen or fatally injured while in your custody and care, you will be covered. These may be extra expenses you didn’t anticipate, but unless you are a gambler by nature, they are well worth the peace of mind.