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Selling Your Horse On Payments – Who Owns The Horse?

By Tracy L. Dopko, Certified Senior Equine Appraiser


You have sold your horse, and the Buyer and you (the Seller) have agreed the horse will be sold on payments and reside on the Buyers' property, or at the Buyers chosen boarding facility. Normally, Sellers and Buyers involved in this type of Sales Agreement never think about who the actual owner is during this time...until there is a problem!

Let me just start off by saying that I am not a lawyer, so all information provided in this article is for reference only. As an Equine Appraiser and Equine Expert Witness, I have worked on many cases involving disputes over ownership of a horse. Many times, it could have been avoided by having a proper contract in place, or seeking the advice of an Equine Attorney before any agreements are finalized. Below are important facts that Sellers and Buyers need to be aware of.

Using one case as an example, a successful 2nd Level dressage mare was sold to the Buyer on payments. The Seller and Buyer agreed on the amount of the monthly payments and terms, and it was agreed that the Buyer would keep the horse at their own facility while payments were being made. The Seller was diligent in making sure the Buyer understood the mare's registration papers would remain with the Seller, and no transfer of ownership would occur until the mare was paid for in full. As well, the Seller made sure that the sale would become null and void if the Buyer stopped making payments and made sure to spell everything out thoroughly in the Bill of Sale. Fast forward, the Buyer stopped making payments and refused to return the mare. With Bill of Sale in hand, the Buyer now legally owns the mare. The Seller was forced to retain legal counsel.

Many people hearing this story would simply say to the Seller, "If you know where your horse is, just go and get it!" Unfortunately, in a case like this, it is not that simple. At the end of the day, possession is 9/10ths of the law.

Many sellers do not realize that a Bill of Sale is a legal document that transfers the title of the horse. Once a Bill of Sale is given to a Buyer, you have handed over the title on the horse. It is now their horse, regardless of whether they still owe payments or not. Often, the equine business cases dealt with over and over again by Equine Attorneys are disputes over ownership or title of a horse.

If you have sold a horse on payments, do not combine your Purchase Agreement and Bill of Sale all in one contract. Why? Re-read the paragraph above! A Bill of Sale determines the title on a horse. Even though a Buyer may not have finished paying for the horse, if they have a Bill of Sale from the Seller, they own the horse, and therefore can easily dispute any further payments at a later date!

It does not matter whose name the registration papers are in. Equine Breed Registries normally have a policy of staying out of this type of dispute, as they simply provide registration papers on the horse, not proof of current title or ownership. As many people are familiar with, especially in the open performance world (i.e. hunter/jumper, dressage and eventing), a horse can change ownership 2 or 3 times with the registration papers never being transferred. It does not mean the last person recorded as owner on the registration papers is the current legal or rightful owner of the horse.

The only way to combat this huge problem within our industry is to realize it is extremely important that a Purchase Agreement or Promissory Note needs to be drawn up when a horse is being purchasing on payments, and a Bill of Sale should never be given to the Buyer until all conditions of the sale have been met. As well, it is important for the Seller to maintain a security interest or collateral interest in the horse, otherwise, you do not have the right to repossess the horse. If this has not been included in the Sales Agreement, then the Seller's only recourse is to sue for damages!

Please note that at the time this article was written, the States of California, Florida and Kentucky have special requirements regarding Bill of Sales, which is why it is important a Seller does not go on the internet and simply ask someone for a generic Promissory Note, Sales Agreement, etc., as most generic contracts are missing crucial elements. Paying an Equine Attorney (or an attorney with a bit of equine knowledge) to draw up your own personal contracts can be worth its weight in gold. Often, these personally drawn up contracts can be used by your business over and over again. It is important to note that if you do seek the help of an Equine Attorney, it may be beneficial to find an attorney who practices in your home State or Province, as laws may vary from State to State, or Province to Province.

Also of importance, in your Promissory Note or Purchase Agreement, make sure there is a clause, stating that if the Buyer does not complete their payments on the horse, you have the right to come onto their property and remove the horse. As stated by law, you do not have a right to go on to someone's property and seize or repossess a horse unless it is agreed up front.

People seem to have a mistaken belief that a Sheriff, or the Police, will accompany a Seller to pick up their horse if the Buyer has refused to finish paying for the horse. Unfortunately, this type of situation is a civil matter, not a criminal one. The police will not help if you do not have anything in writing, or do not have the proper documentation to back up your complaint. Current television shows like Repo Games make repossessions look easy. It is important to understand that the people featured in these shows do not just walk on to someone's property and take their vehicle just because they have a tow truck with them. They have already gone through the court system and have the proper documentation to back up the repossession.

If more people would realize how important contracts and Equine Attorneys are, as well as always making sure all business deals are done by contracts, and not just a hand shake and a hope, you would be putting Equine Attorneys and people like myself (Equine Appraisers/Equine Expert Witnesses) out of business!


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