How to Buy a Horse and Not Get Taken for a Ride A lawsuit was filed last week against Heritage Farm in New York.

How to Buy a Horse and Not Get Taken for a Ride

If those involved are not willing to make it right, gone are the days that victims just walk away.

Equine Sales Agent

A lawsuit was filed last week against Heritage Farm in New York. The suit alleges the stable and two co-defendants, who were working on a buyer’s behalf, withheld key information from a pre-purchase exam. The $325,000 claim is a good reminder that agents have a fiduciary duty to act in the best interest of their clients and that the buyer must be their own best advocate.

Horse Authority went to Florida attorney Bonnie Navin, who handles equine-related matters. “I hear these stories so many times that they no longer shock me.”

Navin says the best way to avoid a dispute is to put your goals and expectations upfront and in writing. She recommends the following steps for buyers when purchasing a horse with a trainer or agent.

Equine industry commissions

-No one expects trainers to work for free, but it is important to discuss an acceptable commission up front so there are no surprises. Additionally, the differences in commissions can be vast, anywhere from 10-20% of the purchase price, so make sure everyone is on the same page.

Once a commission rate is agreed upon, it needs to be put in writing.

Remember, as your agent, it is their responsibility to represent your best interests, although many times this isn’t necessarily what occurs.

-Demand that your agent advises you, in writing, of any and all finder’s fees that are attached to the purchase. This protects everyone after the sale.

-Get in writing from your agent, that they will receive nothing from the seller or seller’s agent and are satisfied with the commission you pay.

-Advise your agent that you expect to speak directly with the owner before the horse goes for the vetting, to ensure all due diligence is done.

The seller should advise in writing all medical care the horse has had. The monthly needs of the horse should also be listed.

-Request all past medical records and x-rays be provided before taking the horse for a pre-purchase examination. Ask to speak with their vet and farrier about the animal.

-Many mistakes are made by sellers and agents lowering the age of a horse to attract a buyer. Be sure that your agreement reflects the age and breeding of the horse you are buying and demand to see the horse’s papers before the vetting.

Vets should not be left to age a horse by its teeth. Also, do not depend on USEF records for the age or breeding, because this information is not verified. 

-All too often buyers are taken to the ceiling of their budget to buy a horse. This can lead to corners being cut on the vetting because there is not enough money. You are better off to re-negotiate the price offered on the horse and spend what you need on the vetting.

-If the seller is not willing to sign a purchase agreement then you should insist that you receive a copy of the Bill of Sale (filled out), in order for you to see what you are agreeing to.

-If you don’t have your own vet that you trust, advise your agent that you want a list of 3-5 veterinarians to consider for the pre-purchase exam.

Before hiring a vet, ask them about any conflicts they may have with your agent, trainers, seller, etc.

-The buyer should speak to the vet about the scope of the exam and the work regiment intended for the horse. Agents don’t need to do this. This should be left to the medical professionals as to what type of exam and diagnostic tests need to be done. This lessens any appearance of impropriety for the agent.

Agents should insist the buyer or buyer’s agent be present and video the examination. The agent should insist the vet prepare a report and send it directly to the buyer before the payment is made.

-Advise the vet up front that the x-rays need to be emailed to a vet of your choice for a second opinion. This should be done in a timely fashion. Drug tests should be considered in all purchases.

-Have a purchase agreement signed before vetting the horse to ensure everyone agrees to the same terms of the contract.

At the time the purchase agreement is signed, the buyer should obtain insurance for the animal. If the horse is not purchased the buyer can cancel the policy.

-The contract should include a payment schedule, vetting schedule, deposits (whether refundable or not refundable), legal venue, and attorney fees clause. Don’t sign a contract with an “AS-IS” clause. If you are willing to allow the seller to review the exam, this should also be in the contract. Otherwise, the veterinarian will not be able to speak with them about their horse’s vetting since you are the client.

-If you try a horse in Florida, California or Kentucky you want to ensure the contract is pursuant to that State’s laws.

These states have excellent equine laws to assist both the buyer and seller. For instance, dual agency (acting on behalf of the buyer and seller) is unlawful in these states without the prior knowledge and written consent of both the buyer and seller.

All too often people come to Florida and try a horse, have it vetted, and purchase it — then sign a contract that reflects another state’s laws. 

-Once an agent has located a suitable horse for you the agent should defer to the veterinarian doing the pre-purchase as to whether or not the horse is sound. Once the vet has determined the horse is sound, it is the agent’s job to close out the transaction by securing the paperwork.

The buyer should insist on paying the seller directly, no exceptions. The buyer should pay their agent and the seller pays their agent.  The money should never go through the agent’s hands

Navin says clients often ask her if they need such a lengthy and complicated contract. She says, “You bet! You can address problems up front and if a Seller won’t sign the contract then something is being hidden.”

And, if you haven’t received full disclosure you might be the victim of fraud.

So what do you do if you’re the buyer who’s shocked because you paid $150,000, but the prior owner tells you she’s happy with the $25,000 she got because her trainer said no one wants medium ponies these days?

Navin says don’t run straight to the attorney. She says the best method for resolving these disputes is communication. Sitting down and requesting answers to specific questions may get you much farther than lawyering up. If something nefarious happened in the deal, the players may work out a solution as opposed to having their dirty laundry hung on the line. If you reach a resolution, get it in writing and signed by all parties. Then you have a legal contract.

If those involved are not willing to make it right, gone are the days that victims just walk away.

Navin says an attorney with a background in contract law can help address any issues. A good equine attorney may have a leg-up with their understanding of the industry’s nuances she says.

While you may experience push-back from your professionals initially, you can expect a more transparent buying experience or the opportunity to work with more honest horse professionals, if you follow the steps provided.