Not in the market to buy an entire equestrian facility right now? Leasing has definite advantages versus owning, but whether you lease a few stalls or an entire facility, know exactly what you’re getting, and what’s expected of you, before you commit.
It’s just too risky to skip your homework, says Susan Collins, owner of Revolution Farm (www.revolutionfarm.com) of Bethel, Conn., and Palm Beach Gardens, Fla. “I’ve helped several trainer-friends negotiate leasing arrangements, and it always amazes me how few think to draw up a business-like contract to protect themselves,” says Collins.
One of her friends had to move more than 20 horses overnight after giving notice to her landlord of four years. The friend had no contract specifying how her deposit would be returned or how services would be maintained, says Collins. The professional suddenly found herself with zero maintenance—no ring dragging, paddocks locked up, no more snow removal on the 1.5-mile driveway, “along with other joys like the hot water heater and phone being turned off.” It was grim news for a barn populated by full-service clients paying several thousand dollars a month.
Sharing barn space is lot like a marriage. When it goes well, it’s bliss, but when it doesn’t…Happily, farm owner Judy Butosky and Pony Club and eventing specialist Janna Ritacco of Middle Ground Eventing in Greenville, S.C., are like-minded, says Butosky, when it comes to horse management.
“It’s important to work with someone who understands that their liability is your liability while they’re on your property,” Butosky says. Lessor and lessee must have compatible insurance and that all-important contract. In this case, Ritacco is allowed use of expansive farmland for hacking, plus truck and trailer access. She and Butosky split maintenance of the barns and the hayloft.
“I know what I’m allowed to do and not do. We sat down and spelled it all out,” says Ritacco.
Jotunheimens Staller, a.k.a., JS Dressage (www.jsdressage.com) leases stalls at Good News Farm in Barnesville, Md. “We like this arrangement,” says JS spokesperson Maat Van Uitert, “because all other work is taken care of, leaving us open for training.” USDF gold medalist Marat Bakhramov, formerly of the Soviet Union, focuses without distraction, says Van Uitert—on horse care and training for upscale clientele.
The trade-off, she says, is slightly higher expenses, but no more barn management worries. “You are not 100 percent in control,” she admits, “and friction or misunderstanding can arise. But, it’s a minor drawback compared to the benefits.”
And the benefits can be great. “You’d have to drag me out of here,” affirms Joshua Robertson (www.robertsonshowhorses.com), AQHA, NSBA trainer specializing in Western disciplines. He has 20 stalls at the top-class Double Diamond Equestrian Center in Boerne, Texas (www.ddequestrian.com).
The ranch bills his clients directly and provides a superb indoor arena, walkers, round pens and other amenities. Reliable ranch employees ready Robertson’s horses each morning: he pays extra for an office. “They do everything,” he says with relief, not missing the headaches of hiring or buying supplies. He’s clear on what’s expected and maintains a convivial dialogue with owner Ted Blanch and property manager Melinda Livingston.
And here’s another success story. “I have use of everything,” says Top Notch Eventing’s (www.topnotcheventing.com) Katie Willis at the 120-acre River View Farm in Bluemont, Va. Owners Peter Elzer and Ann Caldwell are pleased to have their farm get used, she says, and she works hard to retain their respect. The owners live on the property and keep an eagle eye on things, where Willis currently occupies nine stalls—she’s had up to 16 and she pays by the horse.
Her opportunity came in May of 2004 by word of mouth since the owners didn’t advertise. If you’re looking to lease space, she recommends asking around within the local horse community, as she did.
Contemplate the dynamics of leasing from the perspective of the barn owner. Property owners may be reluctant to rent the entire property to one trainer, says attorney Rachel Kosmal McCart of Equine Legal Solutions (www.equinelegalsolutions.com). Credit ratings are a concern, plus, “owners take a big risk when someone comes in with 30 horses and doesn’t pay the bill.” To help spread the risk, owners may bring in individual boarders.
McCart often recommends a flat fee for trainers to rent whatever portion they decide on. When deciding on a price, trainers often forget that being able to run their businesses out of a facility is a privilege, McCart says. Just paying board like everyone else doesn’t adequately compensate the owner for use of the property, because horses in training create a lot of wear and tear.
McCart recommends first coming to an agreement on who’s responsible for maintenance, especially when something breaks or is damaged. Damage can occur to fencing, plumbing, driveways, parking, automatic waterers and other facilities. “If trainers and property owners are cognizant of what needs to be done, and how much things cost, conflict can be greatly reduced,” she says.
Trainers who invest sweat equity, fixing fences or improving footing, deserve consideration and might consider asking for a reduced lease fee. “These are things that you can’t take with you,” she says. “Why not negotiate a reduced rate for your effort to improve someone else’s property?”
Be wary of leasing from a property owner who’s not a horse person and isn’t involved in day-to-day matters. “Sometimes property buyers don’t know what a money pit a horse property can be,” she notes.
Both owner and trainer should have their own liability insurance, McCart says, and trainers should include property owners’ names on clients’ releases. Casualty coverage is usually the owner’s responsibility. Again, talk it out.
About those “free stalls” that trainers often expect? McCart discourages them, and suggests owners reduce the rate or provide a bonus for keeping stalls full. “People are more likely to fight about these; they’re the first thing the landlord wants to take away, and the last thing a trainer wants to give up,” she says.
She discourages owners from taking a percentage of lesson income. “It’s hard to keep accounting straight, and people aren’t always inspired to be that honest. I’ve seen lots of situations blow up.” An overall lease fee should cover overall facility use.
Other questions to ask:
- Will the facility host clinics or shows?
- What impact will this have on customers?
- Will the barn owner allow the professional to host shows or clinics?
- Can customers ship in, and if so, how will this impact leasing trainers’ use of facilities?
There’s much to consider, which is why forethought and discussion are paramount, as is a good contract to fall back on. When all sides know what to expect, nasty surprises can be kept to a minimum.