Monday, April 20, 2009
Recession Ripples Throughout Horse Industry
From time to time, I'm asked how the downturn in the economy has affected the horse industry. Here's my perspective as an equine attorney.
Boarding
Although Equine Legal Solutions always receives a lot of calls from boarding stables about boarders who aren't paying their bills, the situation seems to have reached nearly epidemic proportions, particularly in California. Our practice spans California, New York and Washington, and most of the calls about past-due boarders come from California, with an increasing number from Washington. Over half of our free phone consultations are now about non-paying boarders, whereas those calls typically represent more like 20% of our call volume.
In more and more of the non-paying boarder cases, the boarding stable has no way of reaching the boarder. Sometimes, the information the boarder gave the stable was completely fictional - the boarder intended to dump the horses on the boarding stable from the very beginning. (Note that screening potential boarders would help eliminate this problem.) In other cases, the boarder's contact information was initially good, but the boarder's phone has now been disconnected, and the boarder hasn't visited the stable in quite a while. Often, the boarding stable has sent the boarder a certified or registered letter, which has been returned unclaimed. The boarding stable is often desperate for solutions and wants to know when the boarder's horses are considered abandoned and what the stable can do with them.
Now more than ever, the boarding stable is usually better off not executing on its agister's lien. The horse market has declined significantly due to the slaughter ban and the recession. Horses that would have brought at least $500 at auction a few years ago now have no value at all. Meanwhile, hay prices have increased dramatically, making it more expensive to feed horses while waiting for foreclosure proceedings to conclude. And, the chances of being able to collect past due board through traditional methods are slimmer. The boarder may be out of work, with no wages to garnish, and/or may be preparing to file for bankruptcy. Usually, the best thing a boarding stable can do is to get the boarder to come and take the horses, even if the boarder owes the stable money. Getting the horses off the property stops the meter from running on the hay bill and it also cuts off the stable's potential liability for the horses' care.
More boarding stables are having to enforce the payment, lien and eviction portions of their boarding contracts. Unfortunately, many of them are finding their contracts don't adequately address the issues they face. These old, outdated contracts have unwieldy and difficult notice procedures for eviction involving certified and/or registered mail (which most deadbeat boarders will not claim). Often, they require the stable to give the boarder 30 days' notice of termination, even if the boarder owes the stable thousands in back board, effectively making the stable feed the boarder's horse for free for yet another month. And they contain virtually no practical remedies for collecting past due board and getting rid of abandoned horses and tack. As a result, more boarding stables are weighing the high cost of dealing with boarding problems, and deciding that having a boarding contract they can rely upon to protect their interests is well worth the relatively small price.
Breeding
Most breeders booked fewer breedings in 2009, and many of the bookings were made later than usual, simply because mare owners needed to wait to make sure they had the money to breed this year. Mare owners are being more selective, opting to breed fewer mares. Large breeders are downsizing their broodmare bands, keeping the best and offloading the rest. Many smaller breeders are exiting the breeding business altogether, finding that it's less expensive to buy young stock than it is to breed their own. As a result, there's a glut of broodmares on the market and prices are at historic lows.
Given the significant costs associated with shipping cooled semen and artificially inseminating mares, some breeders are finding that offering live cover and on-site artifical insemination services is drawing more local breedings. Breeders are also keeping costs down by doing more of the work themselves and involving veterinarians and stallion stations less frequently.
As usual, discounts are available to mare owners who book early, book multiple mares and/or have mares with proven production or show records. However, these discounts are more widespread, the discounts are deeper, and even the top stallion owners are offering them. Hoping to draw budget-conscious mare owners, some stallion owners are waiving collection and shipping fees on initial shipments, and others are significantly reducing stud fees and eliminating booking fees. Other stallion owners are offering enhanced live foal guarantees, some with no stud fees due until a live foal is born.
Horse Sales
It won't be news to anyone that horse sales are down, and so are horse prices. Craig's List abounds with free horses, and not just junk. More and more of those free horses are sound, registered and/or well-trained. Breeders are having more dispersal sales, and sending more young stock and broodmares to auction.
At the same time, there are fewer buyers at those auctions, and the buyers who do attend buy fewer horses. Sellers are less likely to "no sale" low-selling horses, opting not to haul them home.
Some horse buyers are being more careful. They're making fewer impulse purchases, not buying as many horses sight unseen over the Internet. They're using horse purchase contracts, insisting upon some accountability from the seller. Some horse buyers are taking horses on trial and/or making payments in installments. More sellers are agreeing to these relatively risky terms because they have no other buyers, but conscious of these risks, they are seeking out higher quality horse sale contracts in an effort to protect themselves.
Other horse buyers are cutting costs unwisely, opting not to get a pre-purchase vet exam or not have radiographs or blood draws done during the exam. And some horse sellers are also accepting risky deals that they wouldn't have even considered in a better economy, simply because they need to move some horses, and they need to do it now.
Riding Lessons
It should come as no surprise that many families consider riding lessons a luxury, so children's lessons are eliminated or reduced when a family experiences financial difficulty. Adult amateurs are also doing without lessons, opting to ride on their own instead.
Training
A lot of horse owners who would have sent young horses to a trainer are now either letting those horses sit, selling those horses as unbroke or greenbroke, or doing some of the training themselves. As a result, I think we can expect to see even more untrained young stock for sale in the coming months. Other horse owners who normally keep their horses in full-time training are bringing their horses home, or cutting back to part-time training, filling in the gaps themselves. Fewer training clients are going to shows, and many of those still showing are opting to attend fewer shows and show in fewer classes this year. More and more trainers are opting to use training contracts, fearful that they won't get paid, or will get stuck with a client's horse.
Boarding
Although Equine Legal Solutions always receives a lot of calls from boarding stables about boarders who aren't paying their bills, the situation seems to have reached nearly epidemic proportions, particularly in California. Our practice spans California, New York and Washington, and most of the calls about past-due boarders come from California, with an increasing number from Washington. Over half of our free phone consultations are now about non-paying boarders, whereas those calls typically represent more like 20% of our call volume.
In more and more of the non-paying boarder cases, the boarding stable has no way of reaching the boarder. Sometimes, the information the boarder gave the stable was completely fictional - the boarder intended to dump the horses on the boarding stable from the very beginning. (Note that screening potential boarders would help eliminate this problem.) In other cases, the boarder's contact information was initially good, but the boarder's phone has now been disconnected, and the boarder hasn't visited the stable in quite a while. Often, the boarding stable has sent the boarder a certified or registered letter, which has been returned unclaimed. The boarding stable is often desperate for solutions and wants to know when the boarder's horses are considered abandoned and what the stable can do with them.
Now more than ever, the boarding stable is usually better off not executing on its agister's lien. The horse market has declined significantly due to the slaughter ban and the recession. Horses that would have brought at least $500 at auction a few years ago now have no value at all. Meanwhile, hay prices have increased dramatically, making it more expensive to feed horses while waiting for foreclosure proceedings to conclude. And, the chances of being able to collect past due board through traditional methods are slimmer. The boarder may be out of work, with no wages to garnish, and/or may be preparing to file for bankruptcy. Usually, the best thing a boarding stable can do is to get the boarder to come and take the horses, even if the boarder owes the stable money. Getting the horses off the property stops the meter from running on the hay bill and it also cuts off the stable's potential liability for the horses' care.
More boarding stables are having to enforce the payment, lien and eviction portions of their boarding contracts. Unfortunately, many of them are finding their contracts don't adequately address the issues they face. These old, outdated contracts have unwieldy and difficult notice procedures for eviction involving certified and/or registered mail (which most deadbeat boarders will not claim). Often, they require the stable to give the boarder 30 days' notice of termination, even if the boarder owes the stable thousands in back board, effectively making the stable feed the boarder's horse for free for yet another month. And they contain virtually no practical remedies for collecting past due board and getting rid of abandoned horses and tack. As a result, more boarding stables are weighing the high cost of dealing with boarding problems, and deciding that having a boarding contract they can rely upon to protect their interests is well worth the relatively small price.
Breeding
Most breeders booked fewer breedings in 2009, and many of the bookings were made later than usual, simply because mare owners needed to wait to make sure they had the money to breed this year. Mare owners are being more selective, opting to breed fewer mares. Large breeders are downsizing their broodmare bands, keeping the best and offloading the rest. Many smaller breeders are exiting the breeding business altogether, finding that it's less expensive to buy young stock than it is to breed their own. As a result, there's a glut of broodmares on the market and prices are at historic lows.
Given the significant costs associated with shipping cooled semen and artificially inseminating mares, some breeders are finding that offering live cover and on-site artifical insemination services is drawing more local breedings. Breeders are also keeping costs down by doing more of the work themselves and involving veterinarians and stallion stations less frequently.
As usual, discounts are available to mare owners who book early, book multiple mares and/or have mares with proven production or show records. However, these discounts are more widespread, the discounts are deeper, and even the top stallion owners are offering them. Hoping to draw budget-conscious mare owners, some stallion owners are waiving collection and shipping fees on initial shipments, and others are significantly reducing stud fees and eliminating booking fees. Other stallion owners are offering enhanced live foal guarantees, some with no stud fees due until a live foal is born.
Horse Sales
It won't be news to anyone that horse sales are down, and so are horse prices. Craig's List abounds with free horses, and not just junk. More and more of those free horses are sound, registered and/or well-trained. Breeders are having more dispersal sales, and sending more young stock and broodmares to auction.
At the same time, there are fewer buyers at those auctions, and the buyers who do attend buy fewer horses. Sellers are less likely to "no sale" low-selling horses, opting not to haul them home.
Some horse buyers are being more careful. They're making fewer impulse purchases, not buying as many horses sight unseen over the Internet. They're using horse purchase contracts, insisting upon some accountability from the seller. Some horse buyers are taking horses on trial and/or making payments in installments. More sellers are agreeing to these relatively risky terms because they have no other buyers, but conscious of these risks, they are seeking out higher quality horse sale contracts in an effort to protect themselves.
Other horse buyers are cutting costs unwisely, opting not to get a pre-purchase vet exam or not have radiographs or blood draws done during the exam. And some horse sellers are also accepting risky deals that they wouldn't have even considered in a better economy, simply because they need to move some horses, and they need to do it now.
Riding Lessons
It should come as no surprise that many families consider riding lessons a luxury, so children's lessons are eliminated or reduced when a family experiences financial difficulty. Adult amateurs are also doing without lessons, opting to ride on their own instead.
Training
A lot of horse owners who would have sent young horses to a trainer are now either letting those horses sit, selling those horses as unbroke or greenbroke, or doing some of the training themselves. As a result, I think we can expect to see even more untrained young stock for sale in the coming months. Other horse owners who normally keep their horses in full-time training are bringing their horses home, or cutting back to part-time training, filling in the gaps themselves. Fewer training clients are going to shows, and many of those still showing are opting to attend fewer shows and show in fewer classes this year. More and more trainers are opting to use training contracts, fearful that they won't get paid, or will get stuck with a client's horse.
Labels: agister's lien, horse boarding, horse breeding, horse sales, horse training
Monday, February 25, 2008
When It's Better to Just Let the Horses Go...
Non-paying boarders and abandoned horses have always been a significant problem for boarding stables, and judging from the volume of calls we receive at Equine Legal Solutions, the problem is escalating quickly. While state agister's lien laws typically provide the boarding stable with an automatic lien on the horses for unpaid past due board, foreclosing on that lien may not make sense. Here's why:
-Worthless Collateral. The horses seldom have much market value, and even if they do, that market value will be compromised by the situation. Registration papers (if the horse is even registered) will be hard, if not impossible, to obtain. Agister's lien statutes frequently require that the horse be sold at public auction, which almost certainly means a lower price than a private sale. Even if a private sale is permitted by the agister's lien statutes, prospective buyers will be spooked by the possibility of title problems. Note that all of these issues are exacerbated in a soft horse market.
-Expense. Horses are expensive to keep, and getting more expensive all the time due to the rising costs of hay, feed and bedding. To properly foreclose on an agister's lien and sell the horses, it will likely take at least 60-90 days, often longer. During that entire time, you will have to feed and care for the horses at your own expense, and you may not ever recoup those expenses. Not only that, you will have to hire an attorney to represent you in the civil lawsuit you will almost certainly need to bring to properly foreclose on the lien. Most attorneys charge several hundred dollars per hour and require a substantial deposit or retainer up front, and unless you have a signed boarding contract that provides for attorneys' fees in the event of a lawsuit, you will have virtually no chance of recouping your attorneys' fees.
-Better Alternatives. If you allow the horses to leave the property, it limits the amount that the boarder owes you, making it more likely that the claim can be brought in small claims court. And, you can usually convince the boarder to make at least some cash payment when they take the horses, reducing the amount of money that you have to chase. If, when the boarder arrives to take the horses, you can convince the boarder to sign a statement that they do owe you the amount in question, it will make pursuing your claim that much easier. In small claims, you can represent yourself and therefore do not have to incur the expense of hiring an attorney. And, contrary to popular opinion, small claims judgments CAN be enforced. For example, if the boarder has a job, you can garnish their wages. If the boarder owns a home, you can put a lien on it, ensuring that you will be paid if the property sells. A claim reduced to a court judgment is far easier to enforce than a claim of lien, and in most instances, judgments earn interest until they are paid and you can usually recoup the cost of enforcing a judgment.
-Liability. Horses are fragile. During the months it will take to foreclose on your agister's lien, you will be caring for the horses and if something happens to them, the horse owner could sue you.
-Opportunity Cost. While you are feeding and caring for horses that belong to a non-paying boarder, those horses are occupying stalls or pastures that could be occupied by horses belonging to a good paying customer.
-Stress. Let's not forget about your quality of life. Foreclosing on an agister's lien is a lengthy, expensive and time-consuming process that typically leads to a lot of stress for the boarding stable owner. The horse owner often surfaces at the 11th hour wanting to negotiate a deal or try to stop the foreclosure process, and they always seem to show up on a holiday or weekend. When the stable owner refuses to allow the boarder to take the horses, the horse owner will usually try to bring the sheriff out to intervene. Typically, the sheriff will arrive, hear the other side of the story and tell the parties that the situation is a civil matter and therefore law enforcement will not get involved or allow the boarder to take the horses. However, such situations frequently turn into a scene before that happens, with shouting, threats and worse.
-Worthless Collateral. The horses seldom have much market value, and even if they do, that market value will be compromised by the situation. Registration papers (if the horse is even registered) will be hard, if not impossible, to obtain. Agister's lien statutes frequently require that the horse be sold at public auction, which almost certainly means a lower price than a private sale. Even if a private sale is permitted by the agister's lien statutes, prospective buyers will be spooked by the possibility of title problems. Note that all of these issues are exacerbated in a soft horse market.
-Expense. Horses are expensive to keep, and getting more expensive all the time due to the rising costs of hay, feed and bedding. To properly foreclose on an agister's lien and sell the horses, it will likely take at least 60-90 days, often longer. During that entire time, you will have to feed and care for the horses at your own expense, and you may not ever recoup those expenses. Not only that, you will have to hire an attorney to represent you in the civil lawsuit you will almost certainly need to bring to properly foreclose on the lien. Most attorneys charge several hundred dollars per hour and require a substantial deposit or retainer up front, and unless you have a signed boarding contract that provides for attorneys' fees in the event of a lawsuit, you will have virtually no chance of recouping your attorneys' fees.
-Better Alternatives. If you allow the horses to leave the property, it limits the amount that the boarder owes you, making it more likely that the claim can be brought in small claims court. And, you can usually convince the boarder to make at least some cash payment when they take the horses, reducing the amount of money that you have to chase. If, when the boarder arrives to take the horses, you can convince the boarder to sign a statement that they do owe you the amount in question, it will make pursuing your claim that much easier. In small claims, you can represent yourself and therefore do not have to incur the expense of hiring an attorney. And, contrary to popular opinion, small claims judgments CAN be enforced. For example, if the boarder has a job, you can garnish their wages. If the boarder owns a home, you can put a lien on it, ensuring that you will be paid if the property sells. A claim reduced to a court judgment is far easier to enforce than a claim of lien, and in most instances, judgments earn interest until they are paid and you can usually recoup the cost of enforcing a judgment.
-Liability. Horses are fragile. During the months it will take to foreclose on your agister's lien, you will be caring for the horses and if something happens to them, the horse owner could sue you.
-Opportunity Cost. While you are feeding and caring for horses that belong to a non-paying boarder, those horses are occupying stalls or pastures that could be occupied by horses belonging to a good paying customer.
-Stress. Let's not forget about your quality of life. Foreclosing on an agister's lien is a lengthy, expensive and time-consuming process that typically leads to a lot of stress for the boarding stable owner. The horse owner often surfaces at the 11th hour wanting to negotiate a deal or try to stop the foreclosure process, and they always seem to show up on a holiday or weekend. When the stable owner refuses to allow the boarder to take the horses, the horse owner will usually try to bring the sheriff out to intervene. Typically, the sheriff will arrive, hear the other side of the story and tell the parties that the situation is a civil matter and therefore law enforcement will not get involved or allow the boarder to take the horses. However, such situations frequently turn into a scene before that happens, with shouting, threats and worse.
Labels: agister's lien, horse boarding
Friday, September 21, 2007
Evicting a Boarder from Your Boarding Stable
From time to time, boarding stables find themselves in the difficult situation of having to evict a boarder. Much erroneous information circulates in the horse community about boarding stable evictions and what is and is not lawful. However, unlike evicting a tenant from an apartment, boarding stable evictions are not subject to state landlord/tenant laws unless your boarder actually resides on the property. Horses are considered personal property and therefore the eviction process is governed exclusively by contract.
When Can You Evict a Boarder?
As the owner of a boarding stable, you can generally evict boarders for any reason that is not based upon unlawful discrimination (i.e., age, race, sex, national origin, physical disability). Common (and lawful) reasons for evicting boarders include late or non-payment, personality mismatches, destructive horses and unsafe horsemanship. However, you do not even need to have a reason!
How Much Notice Do You Have to Give?
If you have a written boarding contract, you must provide the amount of notice specified in your boarding contract. If you do not have a written boarding contract, Equine Legal Solutions recommends that you provide your boarder with one month's advance notice, although this time period is not legally required. This 30-day period allows your boarder to find new accommodations without undue hardship, and in most cases, the boarder will vacate before the 30-day period has expired. However, there are certain circumstances where you may need to evict your boarder immediately, such as in cases where the boarder is engaging in unsafe or unlawful behavior. In such instances, you should provide the boarder with the shortest amount of time in which they can reasonably be expected to find a new place and move out. Typically, a week would be reasonable under such circumstances. Note that if you have reason to believe that your boarder has been engaging in unlawful behavior, such as threatening another boarder with bodily harm, willfully injuring a horse or stealing, you should immediately contact law enforcement and report the alleged crime. In addition, because your other boarders may be in danger, you may want to give such a boarder as little as 24 hours' notice to vacate the premises.
What Should the Notice Say?
In eviction notices, as in many of life's most difficult communications, less is more. Include only the most basic information: the date and time by which the boarder needs to be out, and the amount, if any, that will be due upon the boarder's departure. Do not specify the reasons for termination, as it will provide the boarder with a basis for arguing with you. To give the boarder an incentive to move out as soon as possible, state that you will provide a prorated refund of any prepaid board if the boarder moves out before the termination date. Also state that if the boarder does not move out by the termination date, that a daily board charge per horse and a daily storage fee for personal property will apply.
What Format Should the Eviction Notice Be In?
Boarding contract termination notices should always be in writing and signed by a person with authority to act for the boarding stable, such as a stable manager.
How Should I Deliver the Eviction Notice?
Deliver the notice of termination to the boarder's home address (or the address given by the boarder in the boarding contract) via a method that provides proof of delivery. Fax notice, with confirmation of delivery, is acceptable. Email notice is not, unless acknowledged in a reply email from the recipient. For mail deliveries, Equine Legal Solutions highly recommends Federal Express rather than U.S. Postal Service registered or certified mail. Not only is it faster, the likelihood of the recipient signing for it is much higher. Most folks with credit and/or legal problems are well aware that no good news ever arrives by certified or registered mail, so they will not sign for it, and by the time that the stable determines the notice hasn't been delivered, more time has passed. Personal delivery (i.e., handing the notice to the boarder) is not recommended, because the boarding stable will have no independent proof of the date of delivery. Plus, the boarder may be very angry when they receive the notice and cause a scene (or worse).
What If I Don't Know Where to Find the Boarder?
In many cases in which the boarder owes a substantial sum of money in back board, the boarder cannot be located. In such instances, it may be helpful to use free Internet-based search services such as reversephonedirectory.com and whitepages.com. Paid searches through online services such as Intelius.com can also yield excellent results. If these methods fail, you can contact a professional process server to run a "skip trace" for you and serve the boarder with the notice. You can find a professional process server in your area by contacting the National Association of Professional Process Servers.
Do I Have to Give the Boarder a Refund?
While your boarding contract may not require you to give your boarder a partial refund for the unused period, it is often an excellent idea to do so. Stating in the termination notice that you will give your boarder a refund of any unused board will give them a reason to move out earlier. Otherwise, they may feel like they should stay until the last day to "get their money's worth," meanwhile creating ill will at the barn. Offering a prorated refund will also help to keep the process as smooth as possible by making the boarder feel as though you are treating them fairly.
Do I Have a Lien on the Boarder's Horses for Unpaid Board?
If your boarder has signed Equine Legal Solutions' boarding contract, it specifies that you have an automatic lien on horses for unpaid board, and that you can sell or otherwise dispose of the horses if they remain on your property after a certain specified time period following termination of the boarding agreement. Because the boarder has specifically waived any rights that they might have otherwise had under your state's agister's lien law, you can typically take action to sell the horses without having to go through the typical lien sale process, though Equine Legal Solutions strongly recommends that you consult local counsel before doing so.
Without a contract stating that the boarding stable can sell the horses AND that the boarder waives his/her rights under the state agister's lien laws, the lien process is more complicated. In most states, boarding stables have an automatic lien on livestock for unpaid board. Typically, no formal filings are necessary, but the lien applies only for so long as the horses are in the possession of the stable. Having a possessory lien means that once you allow the horses to be removed from your property, you no longer have a valid lien.
However, to foreclose on your statutory lien and be able to sell the horses, you will typically need a court order and have to follow a specific sale process, which is usually cumbersome, time-consuming and expensive. See your state's agister's lien law for more information. Equine Legal Solutions highly recommends that you seek advice from a qualified attorney in your state prior to taking any action on your lien, as the boarder could successfully sue you for conversion if you proceed improperly.
Practically speaking, even though you may have a lien on the boarder's horses for unpaid board, it may be in your best financial interest to allow the boarder to take possession of the horses upon termination, even if they owe you money. Foreclosing on your lien is usually cumbersome and expensive, and during the foreclosure process (which usually takes a month or more), you have to continue to take reasonable care of the horses, incurring out of pocket expenses. Although the boarder must reimburse you for this care, you may not ever be able to collect from the boarder. Meanwhile, the boarder's horses are occupying stalls or pasture that could be used by paying customers' horses. Moreover, in the typical agister's lien situation, the boarder's horses are seldom worth more than a few hundred dollars, particularly because the public auction required by most lien statutes tends to result in much lower prices than a private sale would.
Therefore, the boarding stable may be more likely to limit its losses by allowing the boarder to take the horses and then immediately filing suit against the boarder, either in small claims court or in regular civil court. This is particularly true when the boarder has a job, because if the boarding stable obtains a money judgment and the boarder doesn't pay it, the boarding stable can seek garnishment of the boarder's wages, which is both effective for the boarding stable and embarrassing for the boarder.
Can I Sell the Boarder's Tack and Equipment to Satisfy the Debt?
In many cases, the boarder's tack and equipment is worth more money than the boarder's horses, and is also more readily salable than the horses. Plus, it doesn't eat! If your boarder has signed Equine Legal Solutions' boarding contract, it specifies that you have an automatic lien on the boarder's personal for unpaid board, and that you can sell or otherwise dispose of it if it remains on your property after a certain specified time period following termination of the boarding agreement. Because the boarder has specifically waived any rights that they might have otherwise had under your state's lien laws, you can typically take action to sell the personal property without having to go through the typical lien sale process. However, Equine Legal Solutions highly recommends that you consult local counsel before doing so.
Without such a contract stating that the boarding stable has a lien on the boarder's personal property, very few states' lien laws provide for a lien. See your state's agister's lien law for more information. Equine Legal Solutions highly recommends that you seek advice from a qualified attorney in your state prior to taking any action with respect to a boarder's personal property, as the boarder could successfully sue you for conversion if you proceed improperly.
What If the Boarder Doesn't Leave?
Once the eviction date has come and gone, the boarder is no longer lawfully entitled to be on the stable premises. If the boarder tries to come onto the stable premises after the eviction date, the boarding stable should call law enforcement to report the trespass. Note that if the boarder wants to take possession of their horses and personal property after the eviction date (and you consent - see above regarding your lien rights), you can accomplish the hand-off by meeting the boarder at the entrance to your facility rather than allowing them access to your property.
When Can You Evict a Boarder?
As the owner of a boarding stable, you can generally evict boarders for any reason that is not based upon unlawful discrimination (i.e., age, race, sex, national origin, physical disability). Common (and lawful) reasons for evicting boarders include late or non-payment, personality mismatches, destructive horses and unsafe horsemanship. However, you do not even need to have a reason!
How Much Notice Do You Have to Give?
If you have a written boarding contract, you must provide the amount of notice specified in your boarding contract. If you do not have a written boarding contract, Equine Legal Solutions recommends that you provide your boarder with one month's advance notice, although this time period is not legally required. This 30-day period allows your boarder to find new accommodations without undue hardship, and in most cases, the boarder will vacate before the 30-day period has expired. However, there are certain circumstances where you may need to evict your boarder immediately, such as in cases where the boarder is engaging in unsafe or unlawful behavior. In such instances, you should provide the boarder with the shortest amount of time in which they can reasonably be expected to find a new place and move out. Typically, a week would be reasonable under such circumstances. Note that if you have reason to believe that your boarder has been engaging in unlawful behavior, such as threatening another boarder with bodily harm, willfully injuring a horse or stealing, you should immediately contact law enforcement and report the alleged crime. In addition, because your other boarders may be in danger, you may want to give such a boarder as little as 24 hours' notice to vacate the premises.
What Should the Notice Say?
In eviction notices, as in many of life's most difficult communications, less is more. Include only the most basic information: the date and time by which the boarder needs to be out, and the amount, if any, that will be due upon the boarder's departure. Do not specify the reasons for termination, as it will provide the boarder with a basis for arguing with you. To give the boarder an incentive to move out as soon as possible, state that you will provide a prorated refund of any prepaid board if the boarder moves out before the termination date. Also state that if the boarder does not move out by the termination date, that a daily board charge per horse and a daily storage fee for personal property will apply.
What Format Should the Eviction Notice Be In?
Boarding contract termination notices should always be in writing and signed by a person with authority to act for the boarding stable, such as a stable manager.
How Should I Deliver the Eviction Notice?
Deliver the notice of termination to the boarder's home address (or the address given by the boarder in the boarding contract) via a method that provides proof of delivery. Fax notice, with confirmation of delivery, is acceptable. Email notice is not, unless acknowledged in a reply email from the recipient. For mail deliveries, Equine Legal Solutions highly recommends Federal Express rather than U.S. Postal Service registered or certified mail. Not only is it faster, the likelihood of the recipient signing for it is much higher. Most folks with credit and/or legal problems are well aware that no good news ever arrives by certified or registered mail, so they will not sign for it, and by the time that the stable determines the notice hasn't been delivered, more time has passed. Personal delivery (i.e., handing the notice to the boarder) is not recommended, because the boarding stable will have no independent proof of the date of delivery. Plus, the boarder may be very angry when they receive the notice and cause a scene (or worse).
What If I Don't Know Where to Find the Boarder?
In many cases in which the boarder owes a substantial sum of money in back board, the boarder cannot be located. In such instances, it may be helpful to use free Internet-based search services such as reversephonedirectory.com and whitepages.com. Paid searches through online services such as Intelius.com can also yield excellent results. If these methods fail, you can contact a professional process server to run a "skip trace" for you and serve the boarder with the notice. You can find a professional process server in your area by contacting the National Association of Professional Process Servers.
Do I Have to Give the Boarder a Refund?
While your boarding contract may not require you to give your boarder a partial refund for the unused period, it is often an excellent idea to do so. Stating in the termination notice that you will give your boarder a refund of any unused board will give them a reason to move out earlier. Otherwise, they may feel like they should stay until the last day to "get their money's worth," meanwhile creating ill will at the barn. Offering a prorated refund will also help to keep the process as smooth as possible by making the boarder feel as though you are treating them fairly.
Do I Have a Lien on the Boarder's Horses for Unpaid Board?
If your boarder has signed Equine Legal Solutions' boarding contract, it specifies that you have an automatic lien on horses for unpaid board, and that you can sell or otherwise dispose of the horses if they remain on your property after a certain specified time period following termination of the boarding agreement. Because the boarder has specifically waived any rights that they might have otherwise had under your state's agister's lien law, you can typically take action to sell the horses without having to go through the typical lien sale process, though Equine Legal Solutions strongly recommends that you consult local counsel before doing so.
Without a contract stating that the boarding stable can sell the horses AND that the boarder waives his/her rights under the state agister's lien laws, the lien process is more complicated. In most states, boarding stables have an automatic lien on livestock for unpaid board. Typically, no formal filings are necessary, but the lien applies only for so long as the horses are in the possession of the stable. Having a possessory lien means that once you allow the horses to be removed from your property, you no longer have a valid lien.
However, to foreclose on your statutory lien and be able to sell the horses, you will typically need a court order and have to follow a specific sale process, which is usually cumbersome, time-consuming and expensive. See your state's agister's lien law for more information. Equine Legal Solutions highly recommends that you seek advice from a qualified attorney in your state prior to taking any action on your lien, as the boarder could successfully sue you for conversion if you proceed improperly.
Practically speaking, even though you may have a lien on the boarder's horses for unpaid board, it may be in your best financial interest to allow the boarder to take possession of the horses upon termination, even if they owe you money. Foreclosing on your lien is usually cumbersome and expensive, and during the foreclosure process (which usually takes a month or more), you have to continue to take reasonable care of the horses, incurring out of pocket expenses. Although the boarder must reimburse you for this care, you may not ever be able to collect from the boarder. Meanwhile, the boarder's horses are occupying stalls or pasture that could be used by paying customers' horses. Moreover, in the typical agister's lien situation, the boarder's horses are seldom worth more than a few hundred dollars, particularly because the public auction required by most lien statutes tends to result in much lower prices than a private sale would.
Therefore, the boarding stable may be more likely to limit its losses by allowing the boarder to take the horses and then immediately filing suit against the boarder, either in small claims court or in regular civil court. This is particularly true when the boarder has a job, because if the boarding stable obtains a money judgment and the boarder doesn't pay it, the boarding stable can seek garnishment of the boarder's wages, which is both effective for the boarding stable and embarrassing for the boarder.
Can I Sell the Boarder's Tack and Equipment to Satisfy the Debt?
In many cases, the boarder's tack and equipment is worth more money than the boarder's horses, and is also more readily salable than the horses. Plus, it doesn't eat! If your boarder has signed Equine Legal Solutions' boarding contract, it specifies that you have an automatic lien on the boarder's personal for unpaid board, and that you can sell or otherwise dispose of it if it remains on your property after a certain specified time period following termination of the boarding agreement. Because the boarder has specifically waived any rights that they might have otherwise had under your state's lien laws, you can typically take action to sell the personal property without having to go through the typical lien sale process. However, Equine Legal Solutions highly recommends that you consult local counsel before doing so.
Without such a contract stating that the boarding stable has a lien on the boarder's personal property, very few states' lien laws provide for a lien. See your state's agister's lien law for more information. Equine Legal Solutions highly recommends that you seek advice from a qualified attorney in your state prior to taking any action with respect to a boarder's personal property, as the boarder could successfully sue you for conversion if you proceed improperly.
What If the Boarder Doesn't Leave?
Once the eviction date has come and gone, the boarder is no longer lawfully entitled to be on the stable premises. If the boarder tries to come onto the stable premises after the eviction date, the boarding stable should call law enforcement to report the trespass. Note that if the boarder wants to take possession of their horses and personal property after the eviction date (and you consent - see above regarding your lien rights), you can accomplish the hand-off by meeting the boarder at the entrance to your facility rather than allowing them access to your property.
Labels: agister's lien, horse boarding
Wednesday, May 23, 2007
There Is No Free Lunch, Even in Pasture...
One of our callers today found themselves in a situation that arises fairly often in friendships among horse owners. The callers were keeping their horses in two different pastures and the land owners (who were at the time friends of theirs) had apparently offered them free pasture board. The horse owners had no written agreement with the property owners, because at the time, they were all friends and this was a friendly arrangement.
Now, the friendship had soured and the former friends had sold two of the horses, leading to the horse owners' call to our practice. What could they do?
We reviewed their state's agister's lien law with them and determined the land owners hadn't followed the required process prior to selling the horses, which means the horse owners now had legal claims for conversion (a civil form of theft). Their state's lien law had required the land owners to first notify the horse owners of the lien and then obtain a court order prior to selling the horses.
Because the horse owners thought the sold horses were worth approximately $5,000 each, we suggested they pursue their claims in their state's small claims court. Even though their state's small claims court limit was $4,000, filing two claims (one against each of the two land owners, as each one had sold one horse) made more sense than filing a regular civil suit for $5,000 because attorneys' fees for a regular civil case would likely far exceed $5,000.
Of course, legal cases are never as cut-and-dried as they sometimes sound. Accordingly, we noted the horse owners could expect the land owners to file counterclaims demanding payment of back board, because in such situations, it has been our experience that the land owners typically claim the arrangement was not in fact free, but that the horse owners had agreed to pay (and didn't do so). The horse owners should also expect the land owners to claim the horses were worth (much) less than $5,000 and therefore the horse owners should come to small claims prepared to prove value. For example, the horse owners could provide a bill of sale showing what they paid for the horses, or they could have a qualified equine appraiser prepare a written appraisal based on the horses' pedigree and show record.
On their day in small claims, the horse owners can expect a fairly vigorous argument, and the case will likely turn on which story the judge believes, particularly because there was no written agreement. What a sad ending to a friendship among horse people!
Now, the friendship had soured and the former friends had sold two of the horses, leading to the horse owners' call to our practice. What could they do?
We reviewed their state's agister's lien law with them and determined the land owners hadn't followed the required process prior to selling the horses, which means the horse owners now had legal claims for conversion (a civil form of theft). Their state's lien law had required the land owners to first notify the horse owners of the lien and then obtain a court order prior to selling the horses.
Because the horse owners thought the sold horses were worth approximately $5,000 each, we suggested they pursue their claims in their state's small claims court. Even though their state's small claims court limit was $4,000, filing two claims (one against each of the two land owners, as each one had sold one horse) made more sense than filing a regular civil suit for $5,000 because attorneys' fees for a regular civil case would likely far exceed $5,000.
Of course, legal cases are never as cut-and-dried as they sometimes sound. Accordingly, we noted the horse owners could expect the land owners to file counterclaims demanding payment of back board, because in such situations, it has been our experience that the land owners typically claim the arrangement was not in fact free, but that the horse owners had agreed to pay (and didn't do so). The horse owners should also expect the land owners to claim the horses were worth (much) less than $5,000 and therefore the horse owners should come to small claims prepared to prove value. For example, the horse owners could provide a bill of sale showing what they paid for the horses, or they could have a qualified equine appraiser prepare a written appraisal based on the horses' pedigree and show record.
On their day in small claims, the horse owners can expect a fairly vigorous argument, and the case will likely turn on which story the judge believes, particularly because there was no written agreement. What a sad ending to a friendship among horse people!
Labels: agister's lien, horse boarding
Subscribe to Posts [Atom]
