The Buying, Selling, and Leasing Horses with Confidence panel on Friday discussed their focus over the past year and how they hope to educate members. US Equestrian staff attorney Amelia Sandot moderated the panel with members of the Equine Transaction Task Force and guest speakers covering this issue facing the horse industry.
The task force was formed to help members navigate equine transactions and to identify what can be done to counter how misrepresentation in horse sales and leases negatively affects the industry. Since the group’s inception, they agreed to start with reasonable goals and engage a diverse group of members with the aim of US Equestrian providing transaction resources and education for members. The task force continues to focus on education, professionalizing the process, and resources for when things go wrong.
Task force members Lisa Blackstone, Elisabeth Goth, Janine Malone, and Judy Sloan recapped the group’s steps to educate members. The task force created the Equine Transaction Packet with relevant educational materials for members to address asymmetric information, where the buyer knows less than the seller. Since it is relatively easy to buy a horse with undisclosed issues, the packet stresses the importance and role of a professional trainer or agent in the transaction process and emphasize communications between parties. It also touches on the commission process.
- “Our first question was ‘What can we do? What is the first step?’ and the obvious answer is educate more people and produce more information that can be handed out.” – Janine Malone
- “I think this [packet] is a good start, but it needs to go farther. Part of the problem is we need to get to these people before the first transaction takes place, not afterwards. I think for that reason that the more that USEF can have educational things available on the website and these kinds of handouts to get that word out that they need to get educated before they sign on the dotted line–and to make sure they do sign on a dotted line instead of just having a handshake.” – Lisa Blackstone
Professionalizing the Process
Task force members Debbie Bass, Goth, and Judy Werner and guest Kate Levy elaborated on how the equine transaction process can be professionalized. The task force points out that buyers and sellers should be able to rely on some “standard of business” to know that a trainer or agent will act as a fiduciary on behalf of the buyer, and that the starting point for ensuring transparency is at the buyer/agent/trainer relationship level. California, Florida, and Kentucky have focused their laws against dual agency on the buyer’s agent in an attempt to protect the process. New companies have emerged to assist buyers, sellers, and agents with transactions, but if you have concerns about a transaction, consult professional legal counsel.
- “I sell only on a contract. I am breeder, so therefore I don’t buy, I sell. Even with broodmares, I insist on selling on a contract, and it is a contract that is updated by my lawyer about every year in the spring. The reason I do that is because, years ago, I bought horse on a contract and it was a bad contract. … My advice is to sell on a contract, and when you do sell on a contract, make sure you have somebody who understands horse transactions.” – Judy Werner
- “A horse’s health was at the heart of nearly every purchase decision [based on my research]. A horse’s health is the common denominator that transcends transactions in any discipline, price point, use, or level.” – Kate Levy
Resources for When Things Go Wrong
Task force members Goth and Armand Leone, members of the task force, and guests Steven Tarshis and Debbie Hanson discussed what actions can be taken when things do not go as planned. When there is a bad equine transaction, the task force recommends seeking help from an attorney. A next step is to establish a voluntary registry for professionals and horse owners to register, stating that they agree to abide by specific principles in equine transactions, then publicizing this registry and highlighting people on the registry. The US Equestrian Hearing Committee can reciprocate penalties involving civil or criminal dispositions to an extent. The committee has the ability to invoke a suspension, fine, or revoke an official’s license, but it does not have subpoena power and cannot award monetary penalties between members.
“Attorney fees in transactions for leasing or buying a horse are very, very little compared to the expense of what probably is going to be spent in the purchase or lease.” – Steven Tarshis
“It is important to ask your trainer or agent to talk to the seller and have a whole list of how the money will be disbursed. … You have the right to ask. If you are not getting answers, that is a red flag.” – Armand Leone
Watch the on-demand panel video on USEF Network.