Loanee wants to buy my horse by installment !

opinionuk

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I wonder if anybody else has had this experience, not sure what to do!

My horse is currently on loan to a lady and has been since July, I have recently lost my job and need to sell the horse, she was offered first refusal but asked if she could make part payments until the end of the loan period which is next July.

Not sure how I would go about this with regards to getting a formal payment plan in place if I were to go down that route, the horse is happy and settled and think she has a nice home but not sure what to do!
 

windand rain

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It rather depends on how you view the loaner is she/he reliable and honest and can you trust them to pay up
Dont transfer ownership until paid in full though as that could be a problem if they can't afford it and decide to sell
 

LovesCobs

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personally I wouldn't as if your horse suffers an illness or injury during that period it could make things complicated. I personally would put the horse up for sale and she can start saving, if your horse hasn't sold then she can buy him when she has the money. You ay find she begs and borrows of people in order to buy him. Are you selling your horse before the loan period finishes.
for me the only 2 choices would be to let her have him in full loan and but him in july (still with the risk of him becoming ill or injured in that time) or put him up for sale and see how it pans out.
good luck in whatever you decide
 

opinionuk

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I would like to say yes, but you just don't know do you.
I was hoping there was a legal document out there somewhere.
 

LovesCobs

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you probably can sort a legal document covering all bases (fixing the price, date of final payment and transfer of ownership, what happens if horse is injured etc) however it can still get complicated if the value of your horse changes and a long drawn out battle can ensue. either one of you may then end up cutting your losses or taking the other to small claims.
 

ihatework

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Tricky.

In your shoes I would probably do something like the following.

Agree a sale price. For sake of argument lets say 5000. That sum is due 1st July 2015 and completes the transfer of sale.

Nov - June, you have a lease agreement in place, at a monthly sum of £312.50 (I say this as 50% of purchase price split over 8 months).

During this time you remain the sole owner. If the horse is returned then they get no refund. If they make the sale then the lease fee is deducted and they pay £2500.

Depends how much you trust this person and want them to have the horse?

I was in a not too dissimilar situation recently. I had a horse on loan and agreed with the owner to buy on a non refundable deposit basis with balance due 4 months later. In that 4 month period the horse went lame. Thankfully we were both honest grown ups and eventually extended the balance due by 8 months to treat the horse and have it back to competitive fitness.
 

opinionuk

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Tricky.

In your shoes I would probably do something like the following.

Agree a sale price. For sake of argument lets say 5000. That sum is due 1st July 2015 and completes the transfer of sale.

Nov - June, you have a lease agreement in place, at a monthly sum of £312.50 (I say this as 50% of purchase price split over 8 months).

During this time you remain the sole owner. If the horse is returned then they get no refund. If they make the sale then the lease fee is deducted and they pay £2500.

Depends how much you trust this person and want them to have the horse?

I was in a not too dissimilar situation recently. I had a horse on loan and agreed with the owner to buy on a non refundable deposit basis with balance due 4 months later. In that 4 month period the horse went lame. Thankfully we were both honest grown ups and eventually extended the balance due by 8 months to treat the horse and have it back to competitive fitness.

Surely the horse will always be mine until full payment is made, however all medical treatment and payment remains with the loanee as it does now?
 

Merrymoles

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Presumably if she can afford to pay you in instalments, then she can afford the payments on a loan.

TBH, if I had a good relationship with someone, having loaned their horse successfully, I might be tempted to offer instalments first, rather than going through the hassle of getting a loan so she may have just thought it was worth asking.

If she says she can't afford to get a loan, then I would question whether she can afford a horse at all!
 

ihatework

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Actually a bank loan is a good suggestion. Maybe as a gesture of goodwill reduce the price to refund the interest paid on the bank loan?
 

honetpot

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As its a really bad time of year to sell I would look into it. The terms being its remains yours until the final payment and payments are made by standing order on X date of the month and any insurance is maintained and the payments made to you. The horse is out on loan anyway, you must have some loan agreement in place which she signed, you get the new contract signed and witnessed properly and say if she stops paying the horse remains your property and she forfeits the payments made. If she stops paying and keeps the horse take her to the small claims for the value. She must be loaning because she could not afford a horse out right, if you sell you have to start paying livery and costs in winter and it may take a couple of months at least to sell, so factor in any livery costs.
 

ester

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I'd want that written out by someone who knew what they were writing though which would cost/be hassle in the first place, let alone if it goes wrong.
 

windand rain

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Although she doesn't know it I have one on sales loan who is slowly paying off in her value by paying me livery. It would cost me x amount of money to keep the horse so under my breath I am using her livery money to offset my costs so for every x amount the girl pays y amount comes off what I expect to get for the pony so she is nearly paid for but I trust this lass with my life so it is no big deal for me. If you sell immediately you will get the horses value but if you have to pay for it you will lose a minimum of 200 per month off its value for every month you have to pay for it so eg you want 2000 for it now if you dont sell until Spring in 6 months time the horses value will only be 800 to you as it will have cost you that 1200 to get it there if you get my drift
 

sarahw123

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Personally I wouldn't entertain this idea. A friend was in the same situation and got messed around with payments and in the end had to go and rescue a broken horse
 

kezz86

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I did this about 2 years ago.

My loanee had had the horse on loan for 8 months before I decided to sell.

I gave her first refusal, but she said she couldn't afford to buy. (She was 16 then)

So I went ahead and advertised, but I felt like a right ol' meany knowing that she wanted the horse.

I have 4/5 people come and make me offers very close to my asking price, but I didn't think they were right for my horse...

About 2 weeks after advertising the loanee's Mum came to talk to me about possible installments on the purchase.

We agreed to a 40% deposit and the rest would be paid monthly by Direct Debit. Of course I'd known them for a while by this point and knew where they worked and lived so I was confident they would pay eventually!

We also had a written agreement that she was to insure the horse and cover ALL cost including disposal if PTS (though had to consult me if it came to this). I did though continue to insure the horse myself during this time just incase!!! All tack and equipment was listed and she had to replace anything I had supplied if it got damaged, I wrote it up a lot like a loan agreement. I also put a clause in that should she not be able to pay the final installments all previous installments were forfeited, as well as stating should the horse die during the payment period again all payments were forfeited and no refunds would be given. (Sounds harsh but needed to be down on paper just in case!). We both signed a copy and kept a copy, I suppose we could have gotten a solicitor involved if there were any concerns.

They did struggle around Christmas time on payments but since I'm lovely and LOVE Christmas I just let them skip the payments and added it to then end payments.

I would seriously consider taking payments from your loanee if you trust her as it's so hard selling horses right now, and chances are a purchaser may ask for a trial period anyway. This way at least she knows and you know she actually likes the horse.

If you're worried she won't pay perhaps suggest a loan and do as you said reduce the amount by the interest she will pay on the loan (though careful with this as she may have to get a loan with high APR rate!)

All the best with whatever you decide.
 
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Midlifecrisis

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I seem to recall a thread on here illustrating the complications with deferred payment - who actually owns the horse until the final payment - what if there is damage caused to the horse - who insures.. I think an outright sale is the only way to go as too many problems may occur.
 

Jnhuk

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I would be very wary tbh. You may be lucky with your loaner buying in installments BUT you never can guarantee it.

I would take proper advice from a horse solicitor in drawing up the arrangement which may be costly and I think the loaner should pay the price of this since she is the one requesting the installment purchase. Here is some advice on the subject from such a firm http://www.equestrianprofessional.com/members/367.cfm

Some questions you worth considering
Is it worth the aggravation, worry, stress and hassle when things go wrong?
If you are selling now due to financial reasons, is it not better to get a lump sum than installments?
Will the loaner see the loan period through with winter coming and knowing that you will see the horse next year?
Will the factors making you decision to sell now, have changed for the better by the end of the loan period?

I would have a candid conversation with loaner and say that you are not keen on the installments and ask her directly if there is any way that she could buy the horse outright just now? If they come back to you and say no, cannot do for genuine and reasonable reasons, then you may wish consider it, if the correct legal documentation was in place but she would need to pay for the legal fees to set it up the arrangement to both your satisfactions.
 

Spring Feather

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I do this often with some of my sales horses. I actually have 2 very indepth legal contracts and use whichever one suits me. With foals their contract states that the moment the 1st installment is paid then the liability and ownership starts to transfer to the buyer however I still hold the collateral (foal) until full payment is made. The second contract I have I generally use for my older riding horses whereby I hold full ownership of these horses until final payment is made. No horse leaves my property until they have been paid for in full, regardless of which contract I use. So, my thoughts are, no reason not to do it BUT make sure you are totally covered legally should anything go wrong.
 

Ibblebibble

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if you feel she is right for your horse and you can afford to wait for the money until July why not go the route of changing the current loan to 'loan with view to buy' , take a sizable non refundable deposit now with the balance due in July. that gives her time to save up and horse stays where it is still under your ownership. if at any point she changes her mind you get to keep the deposit but if all goes well you will have a guaranteed sale. if july seems too far away see if you can come to an agreement of maybe 6 months instead of 9. Just make sure you get a watertight legal agreement drawn up whatever route you do down
 

angelish

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This! Far too messy in my opinion.

this ^ i wouldnt either tbh

potential for far too much to go wrong , what if the horse drops dead ,
what if its injured and is worth less , or they can't afford a big vets bill as well as the cost of paying instalments
i would just say your so very sorry but having money problems of your own you really need to sell to pay off xyz bills etc

i sold a pony to a friend who really couldn't afford the asking price but pony was too good to miss out on and so i took instalments and although i did eventually get all my money and everything went fine , it was a real worry in case the pony hurt himself or worse (it wasn't a problem if they didn't get on with him as i'd of had him back in a flash)
but i did have to nag and ring them for payments which i could have done without tbh

and i insisted they had him insured before they took him and made it clear that if he were to die they still owed me the full asking price/insurance payout
 

Spit That Out

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If this was a random person asking for instalments after you had advertised your horse for sale then I would say no...I have had this question asked several times when selling my last horse!?
However this person already has your horse and us currently paying for its upkeep. You must trust her to have given your horse to her in the first place? Perhaps they can't afford a lump sum but don't want to lose the horse they obviously love? I know that I would struggle to find a few thousand at a moments notice.
Apart from getting a lump sum yourself then I can't see the problem however make it clear that any payments made won't be refunded if they pull out if the deal, that way you don't loose the horse or the sale and it makes them be 100% sure they want to go ahead.
 

LadyRascasse

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If you don't want to do instalments but are happy for him to stay there why not ask her to save the instalments and pay for the horse in full next July, if that is an option. Less complicated that way.
 

Princess Rosie

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Could you not just say to her that you would love for her to buy him but as you've just lost your job, you need the money. If she really wants him she will find the money I'm sure, as people have said if she can afford instalments then she could potentially get a loan (obviously don't know her financial situation), then at least you've tested the water with her before making any further decisions? x
 
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