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How Stables Can Avoid Past-Due Payment Problems
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Operating expenses for stables are tremendous. Utility bills, feed bills, hay costs, labor costs, taxes, insurance, veterinarians, farriers, building maintenance, property maintenance – all of them add up and require operating capital. To keep up with these and other expenses, boarding stables rely on their boarders to pay their fees on time and in full. Unfortunately, stables occasionally encounter problems when boarders fall behind. Although all disputes cannot be prevented, careful advance planning might help prevent problems from occurring.
Before the Boarding Arrangement Begins
Even stables that have never encountered a non-paying boarder have every incentive to plan for the possibility of this happening. Here are two options to consider:
• Use detailed contracts. Boarding contracts can address, in detail, payment responsibilities of the boarder. For example, the contract can include payment deadlines and grace periods (which are a few extra days the stable allows for
payments to be received), interest on unpaid balances at a rate allowed under the applicable state’s law, and late payment fees (where allowed by law) that the stable can impose if payments are not timely received. In addition, stables can learn more about their applicable state’s stablemen’s lien law (also called an “agister’s lien law”) that applies to non-payment situations, and the contract can reference this law. Because of the possibility that stables may need to engage a lawyer to help collect unpaid board, stables can consider including an attorney fee clause through which the stable could potentially recover its legal fees from the non-paying boarder.
• Send timely invoices. Stables can send their clients monthly invoices setting forth the amount due. Sending timely invoices to boarders helps them understand the basis for charges. Invoices also remind boarders of upcoming payment deadlines. Invoices would include basic monthly boarding fees and extra amounts incurred during the prior month for services, such as training, hauling fees, shared barn call fees for the veterinarian, show fees, and others. The boarding contract can include the stable’s current schedule of additional fees and charges that lists these possible fees.
Julie I. Fershtman, Attorney at Law
When Problems Start
Under the stablemen’s lien laws of some states (all laws differ), a stable is legally permitted to keep possession of a boarded horse until the stable has been paid in full. In states that allow stables to do this, stables should think carefully before insisting on holding a horse under these circumstances. Keeping a horse is a potentially great expense for a stable; added to this is the risk of the boarded horse becoming injured or ill but the boarder being unable to pay for needed veterinary attention. Consequently, if a non-paying boarder wants to remove a horse, despite a pastdue balance, stables should seriously consider letting the boarder remove the horse and thereafter pursuing other collection options, such as a lawsuit to collect pastdue amounts. Because of the risks and benefits associated with these options, stable managers should discuss this with a knowledgeable lawyer.
Extreme Measures – Take Caution
Over the years, stables have undertaken a variety of extreme measures after boarding customers fell behind on payments without permission of the non-paying owner and without determining if any action was lawful. They include:
• declaring the boarded horse to be
“abandoned” • claiming to “own” a boarded horse due to non-payment • using the horse in their riding lesson or horse breeding programs • leasing out the horse to others • selling the horse and keeping the proceeds • To avoid legal disputes, stables interested in pursuing any of these actions would be wise to seek legal advice first.
Boarding stables should also take caution before compromising the quality of care given to a boarded horse when board has not been paid. In the eyes of the law, horse boarding arrangements create a bailment relationship and, under that arrangement, stables are required to give boarded horses “reasonable care.” Because the determination of what qualifies as “reasonable care” can be complicated, stables might want to discuss changes to the quality of care with their lawyers.
This article does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable attorney.
About the author:
Julie Fershtman, is one of the nation’s most experienced Equine Law practitioners. A lawyer for 35 years, she is a Shareholder with Foster Swift Collins & Smith, PC, in Michigan. She has successfully litigated cases in 20 jurisdictions nationwide and has tried cases in 4 states. She is listed in The Best Lawyers in America and received the American Bar Association (ABA) “Excellence in the Advancement of Animal Law Award.” Her speaking engagements span 29 states. Her latest book is the 372-page book published in 2019 by the ABA called “Equine Law & Horse Sense.” This book has won four national awards. Find it on Amazon, and look for the horse on the cover. For more information, please visit www.equinelaw.net
