The Show Horse Lease: Proceed with Caution
To earn points in amateur or youth events, many breed associations specify that the horse must be owned by the youth or amateur exhibitor (or a member of their immediate family). As a result, many show horse owners actually take the step of signing a transfer of registration when leasing a show horse so that the horse can be shown by the youth or amateur lessee and earn points. In most breed associations, transferring registration of a horse with no intent to actually transfer the ownership of the horse is strictly against the rules, and if caught, the perpetrators can be fined and/or suspended. Still, this practice is fairly common, and as you might imagine, it leads to all sorts of legal problems.
Because the parties rarely have anything in writing regarding the ownership transfer (or the lease, for that matter), the lessee may be able to successfully claim ownership of the horse. The lessee has possession of the horse, has been paying the horse's expenses, and has usually paid the owner a lease fee (for which they typically have a canceled check). The lessee is also the registered owner of the horse.
In contrast, the legal owner has little to prove that they really own the horse. They have signed a transfer of registration, so they no longer have registration papers in their name. Usually, they have no written lease agreement. The legal owner has not been paying the horse’s expenses during the lease, so they have no receipts for horse care. When faced with an ownership dispute, the legal owner often has nothing more than an argument that the lease fee paid to the owner was far below the horse's fair market value and therefore no sale took place.
To prevent ownership disputes, the lessor can put the lease agreement in writing, and include a provision about the transfer of registration being for the purpose of showing only. ELS offers a show horse lease agreement, its Full Equine Lease Agreement with Registration Transfer, that is designed to cover the above issues.
Because the parties rarely have anything in writing regarding the ownership transfer (or the lease, for that matter), the lessee may be able to successfully claim ownership of the horse. The lessee has possession of the horse, has been paying the horse's expenses, and has usually paid the owner a lease fee (for which they typically have a canceled check). The lessee is also the registered owner of the horse.
In contrast, the legal owner has little to prove that they really own the horse. They have signed a transfer of registration, so they no longer have registration papers in their name. Usually, they have no written lease agreement. The legal owner has not been paying the horse’s expenses during the lease, so they have no receipts for horse care. When faced with an ownership dispute, the legal owner often has nothing more than an argument that the lease fee paid to the owner was far below the horse's fair market value and therefore no sale took place.
To prevent ownership disputes, the lessor can put the lease agreement in writing, and include a provision about the transfer of registration being for the purpose of showing only. ELS offers a show horse lease agreement, its Full Equine Lease Agreement with Registration Transfer, that is designed to cover the above issues.