Selling & Leasing

Selling

There are numerous options for buying or selling stock at public auction and privately; the major auctions in GB, Germany, France and Ireland can be found on the relevant sales houses websites.

There are many options for breeders who are seeking to buy or sell stock:

  • Foals (November – December)
  • Yearlings (August – December)
  • Breeze-ups (Spring, Flat bred two-year-olds)
  • Stores (National Hunt horses at two and three years old)
  • Horses in training
  • Horses out of training 
  • Horses (potential stallions)
  • Stallions

Pin-hooking is a term used for short-term investments (e.g. buying a foal to sell as a yearling or a store).

In most cases, horses are put through a “sales preparation” period prior to sale which can involve extra exercise, feed and grooming to present them in the best possible condition. The most intensive programmes are likely to be used for Flat-bred yearlings in preparation for the late summer and autumn sales; for many consignors, this will be completed over a period of six to eight weeks.

Leasing

Leasing involves ownership of a horse for a set period of time. During this time the costs the horse incurs become the responsibility of the lessee and in return the horse will run under their ownership.  

Whilst some breeders choose to sell their youngstock, a number choose to lease their horses for part of all of their racing careers. The TBA and ROA have produced a leasing agreement template in order to assist members and ensure that agreements are formalised and fair for both parties. As a template agreement it has been designed with the most common leasing considerations in mind and as such may not cover all scenarios. However, as a template it provides a solid framework of terms that parties may wish to consider.

The template can be edited and we recommend all parties read through any leasing agreement thoroughly before accepting terms. It may be useful to refer back to the original template in order to establish any customised sub-sections which may need further consideration.

Agreement Terms:
Owner/Lessor – legal owner of the Horse
Lessee – the person or persons wishing to lease the Horse
Trainer – the person designated as the Trainer of the Horse
Horse – the animal to be leased.

Some additional considerations not covered by the template:

  • Mortality insurance. Some owners may wish to ensure that the Lessee contributes to the annual cost of insurance in respect of all risks of mortality, to a value determined by the Owner. (Item 10.5). A possible addition to the item could include:

    The Lessee will pay the Owner a sum of £x[insert value] each year towards the insurance of the Horse in respect of all risks of mortality to a value determined by the Owner.
  • Training decisions. The template places day to day decisions with the Trainer. However, the involved parties may wish to grant authority on race planning decisions to either the Lessee or Owner. In such cases a possible addition to 7.3 could include:

    OR Lessee acknowledges and agrees that the Trainer shall make the day to day decisions relating to the welfare, training, running, riding, stabling and transport of the Horse, other than that the Lessee/Owner [delete as appropriate] shall have the final say on any race in which the Horse may run; and that Lessee shall have no other rights in relation thereto.
  • Uplift in value of horses. An uplift in value of horses may mean that any lease extension periods could increase in cost for the Lessee. Lessees may wish to add to item 2.1 on lease extensions:

    OR some other time specified under 2.2.

    Then adding at the end of 2.2:

    OR The lease may be extended on these same terms for x further periods each of 12 months until xx/xx/xxxx [insert date] so long as the Lessee gives at least one calendar months’ notice before the commencement of each period of his intention to extend the lease. The Owner will agree to such extensions of the lease unless he regards it as not in either his or the Horse’s best interests for it to continue racing, in which case he undertakes that the Horse will not be raced by him or sold as a prospective racehorse.
  • Other considerations may include the early sale of the horse (prior to the end of the original term of lease). Owners or Lessees may wish to agree a sum to be paid for early termination of the agreement. A possible addition could include:

    If any sale of the Horse is completed under 11.5 or 11.6 the Owner shall pay the Lessee a sum in compensation for early termination of the lease, this sum to be either £x (insert appropriate sum) or x% (insert appropriate percentage) of any sum realised that is greater than the agreed initial value of the horse, £x (insert appropriate value).