Featured Equine Legal Panelist: Free Advice!

Photo by Charlton Equine Law September 2012

This evening I was the featured equine attorney on the national Horse Business Hotline hosted by the great EquestrianProfessional.com.
In addition to my offered insight there were also three other panelists: two for marketing and one for financial/tax/ accounting issues, all geared towards making your equine business more profitable.

Here are the nine topics we covered:
1. Employee or Independent Contractor: a classic question about how to classify those who work or provide services for your equine activities.  IRS.gov provides a large list of factors that they balance in determining the classification, apart from you have called the worker.  Control over a worker's schedule, provision of materials, and others factors are certainly important, but I have found that insurance coverage is one of the elements of primary importance to the IRS (if worker's compensation isn't provided, is the worker self-insured?)

2. What does the horse breeding business look like from a profitability standpoint?
 Not great right now because of the sluggish economy, and you should realize that if you are just beginning a breeding business, you could be 2-3 years from having your first foal on the ground.
Also, keep an eye on what types of horses are selling, yearlings/ young stock vs. trained/ proven stock, etc. and plan accordingly

3. Boarder doesn't pay the board bill, what are the steps that the barn owner can take?
Should have an excellent Boarding Agreement that provides for this, either waiver of rights under lien laws, provisions for additional liens (such as against tack and equipment).  If not, Stablekeeper's/ Agister's Lien is likely automatic, but is very state-specific; can be a timely, confusing, expensive process, so it would definitely be better to avoid the conflict than to go through the lien perfection process.  Avoid allowing board bills to build up.

4. Tax Laws for equine businesses: discussed from a perspective of which entity formation you have chosen for your equine business, such as LLC, Inc., S Corp., etc.

5. Selling a horse on terms
Regardless of the terms of the sale, whether they are financial (e.g., down payment now, the remainder in full within 30 days), or terms based on a vet check or trial period, it is always crucial to have a written document signed by the buyer and seller, and list the things you are both agreeing on (e.g., the risk of loss of the horse shifts to the buyer at the time the buyer picks of the horse, or who insures the horse).  And then take one further step: what do you both agree you will do if one person doesn't fulfill the required term? (e.g., lose all deposit money for the horse and the horse has to be returned).

6. What are some tips for "no budget marketing" (i.e., free?!)
Be a part of your local horse community before you need their help, use social media, tap into your current relationship, get the local paper involves.  Also, can offer a referral program with kickbacks to your present clients for their help, you can get local food sponsors, and more.

7. Whether you must declare Commissions in a horse sale
This deserves an entire blog post in and of itself! If you have a fiduciary relationship with a party, you do need to disclose a commission.  In California (and most states), if you are acting as a dual agent then you must declare that in writing and it must be approved by the parties.

8. Non-traditional funding for starting your equine business (i.e., not a bank loan)
Look into grants that might be available, such as conservation grants, from agricultural departments, perhaps financing from an energy grant for installing solar panels at your new business.  In Kentucky there is a tobacco company funded program for providing infrastructure grants, such as installing new fencing at a loan rate of just 1-2%.

9. What are the features to add to a facility that will yield the greatest ROI? (for example, to bring in a higher net-worth client?)
First, be sure to identify the target client and be sure those clients are in your area, otherwise any improvements are for naught.  You should also do a cost analysis and projection to determine what the improvements will cost, whether you will have to raise fees to cover them, and what financial return is anticipated from the improvements.
Certain low-cost but high-effect improvements are: adding a nice seating area by the barn or overlooking the arena, refacing the stall doors so they look new, repainting the inside of stalls, and perhaps some landscaping.

It was a pleasure to participate in the Hotline, and I hope there was some info in this review that was helpful to you!  Anything particularly interesting to you?

Padlocking your Rights

I've only boarded in one barn in which I saw a padlock on a stall door.  Perhaps at other barns boarders weren't delinquent, or perhaps the barn owner just didn't have a flair for the dramatic statement.

Barn owners put padlocks on stall doors when the horse owner hasn't paid for the horse's care and upkeep.  This provision is typically included in the boarding agreement so that the horse owner has notice.  

I have always hated padlocks because I just think: what if there was flood, fire, earthquake, tornado, or other freak occurrence in which the horse needs to be removed immediately from the stall, but the person at the stable doesn't know where the padlock key is kept, or the barn owner has gone out to the grocery store.

Interestingly enough, the padlock is considered to be a "peaceful means" of keeping the legal owner of the horse from removing the horse.
While I don't necessarily think it is a good idea to keep a non-paying horse on the property (it may be better to have the horse removed, then sue for the balance owing), in some situations it might be.
When a horse owner fails to pay past due board the barn owner has an automatic general lien on the horse.

In addition to any other rights and remedies provided by law, a lienholder may:
(a)Retain possession of the livestock and charge the owner for the reasonable value of providing livestock services to the livestock until the owner's obligations secured by the lien have been satisfied.
So if the horse owner shows up to take the horse away, and you as the barn owner have an automatic lien, then you can peacefully prevent the horse from being removed (such as by locking gates, or asking the horse owner to leave); you as the barn owner have the right to call law enforcement to prevent removal of the horse.

In my opinion, it is always better to keep contentious situations from escalating- do this by ensuring that boarders understand and have signed the terms of the boarding agreement, communicate clearly and often with your boarders, and prevent board bills from growing too large to pay off easily.
As always, you must continue to care for the horse while it is in your stable even if you are not being paid, otherwise you would be subject to criminal animal welfare prosecution.
If you choose to use a means of "locking" the horse onto the property I would recommend getting a Notice of Lien from the courts and posting it to the stall door so if the horse owner calls law enforcement to help take the horse you can provide the notice to the officer.

Have you ever seen a padlock on a stall door?
Or seen an alternative method used?

Let Freedom Ring!

I'm grateful to see such honor and respect given in memory of 9/11 every anniversary.

Each year I am filled with even more gratitude for the United States, and for the countries who reached out to support us in our most disastrous terrorist attack, now eleven years ago.

Thank you to those who have given their lives in support of freedom around the world,
and my thoughts are with those who lost family members and friends in the 9/11 attacks.

And in an attempt to bring horses into this post, lyrics from American country artist Toby Keith for you:

Justice is the one thing you should always find
You got to saddle up your boys
You got to draw a hard line
When the gun smoke settles we'll sing a victory tune
We'll all meet back at the local saloon
We'll raise up our glasses against evil forces
Singing whiskey for my men, beer for my horses

What impact does 9/11 still have for you today, on this 11th anniversary?

The September Issue: publication for Polo Immigration Law

My article on polo immigration law is featured in the September issue for the premiere publication on polo in the U.S.

Immigration for the Polo Community
       During a break between chukkers recently, I played a guessing game with myself: how many non-U.S. citizens are involved in an average U.S. polo game? I counted the grooms, some of the field and club staff, a veterinarian traveling with team horses, and of course the pros; needless to say, I found that this one day at the field was representative of the significant number of foreign nationals involved in U.S. polo each year.
       Immigration law is a pivotal subject in state governments, in the United States' presidential race, and is also an integral aspect of our polo community. Polo is one of the most foreigner-concentrated areas of equestrian sport in the U.S.; we depend upon, and welcome, the polo skills and services brought by nationals of other countries, such as from South and Central America and parts of Europe.

       While the state of U.S. immigration law and policy is in flux and often hotly contested, there are a number of nonimmigrant visas that are particularly appropriate for those in the polo world. These visas are considered 'nonimmigrant' because the visa applicant intends to return to his or her home country by the expiration of the visa.

To read the rest of the article, pick up the latest issue of the magazine!

Update: You can read the entire article online here

Do you have any insight on immigration in the horse world? Or on how the next President should handle the issue?