Loaning "deposit"....

[SatansLittleHelper]

Is it acceptable/legal/ethical etc to ask for a loaning deposit...???
I dont want to go into masses of detail but I'm trying to help someone out and *think* I have come up with a solution....
Owner is considering putting their horse on permanent loan with someone we both know well, horse has a few management issues (nothing major) but, having read many of the horror stories about loans, is understandably very worried.
So I suggested that the owner asks for a substantial deposit for the loan. This would be retained in a separate bank account and would cover any issues if there were welfare issues etc. By the same token the potential loaner has the right to end the loan and have their money back at any time. Ownership would be retained by current owner with the right to remove the horse if any of the loan criteria was not met. Horse would be leaving with his passport, all of his (fully fitted) tack and rugs etc.
Is this a fair way to do things or is it expecting too much..??

 

[TPO]

I'd be worried that the exchange of money could be seen as a sale?

 

[SatansLittleHelper]

It would be contracted that it was a deposit and I think the owner would have the contract checked over by a solicitor..???

 

[Apizz2019]

Why doesn't your friend lease instead and this money can be in return for that, rather than a loan?

This might be easier and a contract can be drawn up to reflect a lease rather than a straight loan with a deposit, which is unusual.

That said, if your friend is asking for a deposit 'just in case' then I'd say he/she probably hasn't found the right loaner if there is any doubt, which there must be to ask for this.

Ultimately, if a bad loaner decides to sell on, sub loan and/or neglect, a deposit won't prevent this from happening, unless you're talking thousands, which may make someone think twice.

 

[Orangehorse]

You would certainly have to have a copy each of a contract stating that it is definitely a loan and that the ownership remains with ............................

I think it is actually a good idea, but don't know if anyone has done it. It would stop anyone who is just looking for a free horse (I don't mean the person involved in this case, but we know it happens).

 

[Green Bean]

I assume this would all be accompanied by a legal agreement and not a simple hand shake, even thought the parties are known to each other. As for the value, the loaner is obtaining a horse essentially for free, presuming the horse is good at something (and not just a hack which would reduce its value), I would think the deposit should cover the secondhand replacement cost of the tack handed over, plus a figure agreed upon should neglect occur (I wouldn't have thought it fair to expect to cover illness or accidents where no blame could be implied). Do the management issues have a cost attributed to them - if so, then this couldn't be expected to be covered by the loaner.

 

[indie1282]

It would depend on what you call 'substantial?

 

[popletaa]

I guess it depends on whether the person being considered for the loan has a substantial amount of money lying around for the deposit... a lot of people loan a horse if they don't have the lump sum available to buy their own, but can afford the monthly cost of maintaining a horse. Though if the person you had in mind is loaning for a different reason then I suppose it could work.

Though, would it really achieve anything? I know if I loaned my pony to someone and a horror story happened, no amount of money would make things right if my pony was hurt/stolen/killed etc.

 

[IrishMilo]

I wouldn't hand over a deposit for a loan unless it was going into something like the horse equivalent of the Deposit Protection Scheme. You say you both know the person well, so why is the concern so big they feel they need a 'substantial' amount upfront?

 

[stormox]

I think the best way to ensure nothing goes wrong is to visit regularly.....

 

[Tiddlypom]

I think the best way to ensure nothing goes wrong is to visit regularly.....

At least weekly at first, and never less than monthly for the duration of the loan.

Though preferably don’t ever loan off the current yard, especially for a horse with management issues.

 

[Lady2021]

The problem is when you put money on a loan it could be seen as sale agreement .

 

[zaminda]

I would never have a horse on loan in these circumstances. If you want me to have it on permanent loan and expect me to hand over a large sum of money to do so for a horse with maintenance issues its called a sale. If it was someone I considered a friend expecting this it would probably end our friendship.

 

[Melody Grey]

I know it’s a different circumstance, but as a landlord I have to send deposits to a protection company, I’m not allowed to hold them myself so just wondering whether you can for other purposes, I.e. a horse loan?

 

[Keith_Beef]

A solicitor would be able to draw up a suitable contract.

I wonder if you could have the deposit money put into an escrow account, and the contract worded such that the money is released to the owner in proportion to any loss suffered through fault or neglect, and back to the "loanee" (don't know if that's the correct term) at the end of the agreement if there has been no loss.

 

[TPO]

I know that there are good people out there that are trustworthy and suitable loan homes but...after what happened recently with an HHOer loaning to a friend my take away would be to never loan a horse with "issues".


If the worst happens then a healthy horse has a better chance of landing on its hooves than one that has pre existing conditions or management requirement

There must be a niggle of doubt because if I were to loan to a friend I wouldn't ask for money from them because to loan to them I'd trust them implicitly. If I was loaning I wouldnt expect to pay an upfront amount. The suggestion of a lease with monthly payments is perhaps a better option.

 

[Shilasdair]

If I were going to pay a substantial amount of money I'd want a horse with no issues, to call my own.

 

[SatansLittleHelper]

There is nothing wrong with the person loaning the horse, no concerns...it's just that with recent stories such as Leo on here my friend is fretting.
Thank you for all of the replies, I think maybe there are better ways forward

 

[scruffyponies]

Put yourself in the shoes of the loaner for a moment. If this horse goes lame, what's to stop the 'owner' disappearing, leaving them with the horse, which is an expensive liability, and no chance they'll ever see their 'deposit' nagain.

 

[Apizz2019]

I know that there are good people out there that are trustworthy and suitable loan homes but...after what happened recently with an HHOer loaning to a friend my take away would be to never loan a horse with "issues".


If the worst happens then a healthy horse has a better chance of landing on its hooves than one that has pre existing conditions or management requirement

There must be a niggle of doubt because if I were to loan to a friend I wouldn't ask for money from them because to loan to them I'd trust them implicitly. If I was loaning I wouldnt expect to pay an upfront amount. The suggestion of a lease with monthly payments is perhaps a better option.

I disagree slightly with not taking on medical conditions, based on my own experience, but know what you're saying.

We took on a neglected 18 year old who had been around the circuit and back and left to his own devices when a new loan couldn't be found.

We took him on and he had multiple issues which I expensed and put right. He was also diagnosed with cushings which I expensed. The owner didn't pay a penny - she didn't have the money to anyway, and I didn't want her to, he was my responsibility.

Unfortunately, his suspensories gave up and we had to have him pts.

I have no regrets, I'm just happy that his last 11 months of his life were spent being loved and pampered.

Despite thousands spent and having him pts, I'm glad it was with us and not another home that would rag him around.

There are decent loaners out there, just few and far between, sadly.

 

[Polos Mum]

Substantial enough to cover meaningful vet bills would put most loaners off - not unreasonably.

Too much risk on either side - if your friend doesn't trust the loaner to the point of needing 'substantial' deposit she shouldn't loan to them

If she is that nervous of it going wrong then I would question whether loaning it the right option at all.

A few bad examples of loans going wrong is such a shame for most people who have successful loans that don't get all the noise and fuss about them because that doesn't make good reading on a forum. I disagree that they are few and far between - just that they are not constantly talked about.

On the side of loaners for once - people don't want their horses for what ever reason (age, injury, available time, finances) but then want a third party to do everything that the owner can't (or doesn't want to), jump through whatever hoops, be 'inspected' all the time, be not trusted with anything and all for the constant threat of having the horse whipped away from them at no notice.

There are loads of threads on here about unwanted horses where 'just loan it' is regularly advised then just as many threads with 'assume all loaners are horse beating / starving - dodgy dealer horse thief's'

The only way to be 100% sure of your horses future is to keep it yourself or pay someone to look after it in just the way you want.

 

[Apizz2019]

Substantial enough to cover meaningful vet bills would put most loaners off - not unreasonably.

Too much risk on either side - if your friend doesn't trust the loaner to the point of needing 'substantial' deposit she shouldn't loan to them

If she is that nervous of it going wrong then I would question whether loaning it the right option at all.

A few bad examples of loans going wrong is such a shame for most people who have successful loans that don't get all the noise and fuss about them because that doesn't make good reading on a forum. I disagree that they are few and far between - just that they are not constantly talked about.

On the side of loaners for once - people don't want their horses for what ever reason (age, injury, available time, finances) but then want a third party to do everything that the owner can't (or doesn't want to), jump through whatever hoops, be 'inspected' all the time, be not trusted with anything and all for the constant threat of having the horse whipped away from them at no notice.

There are loads of threads on here about unwanted horses where 'just loan it' is regularly advised then just as many threads with 'assume all loaners are horse beating / starving - dodgy dealer horse thief's'

The only way to be 100% sure of your horses future is to keep it yourself or pay someone to look after it in just the way you want.

Agree 100%

I've based my views, maybe a little unfairly, on the pony we had which I mentioned earlier in the thread.

This pony was a unicorn, in every way, who had spent 2 years out on loan to pc homes since the age of 5.

Experienced pc homes, sometimes at home with loaners.

I can't tell you the horror of what I saw when tracing back what he'd done and stalking previous loaners.

Even the owner admitted that of all the homes he had, approx only 3 of the 7 homes cared for him well and even then didn't give him 100% what he needed. But she turned a blind eye as she didn't want to sell but couldn't afford to keep him.

That's a lot of experienced people on the pc circuit who didn't give a toss about this pony.

Hence why I'd now be wary of loaning to even the most experienced home, despite being a good loaner myself and knowing we are out there.

 

[Wishfilly]

What protects the loaner from the owner running off with her money? As a loaner I'd be pretty uncertain, and if I had the money to do this, I'd rather just buy.

What happens if the horse is e.g. kicked in the field through no fault of the loaner but they want to give it back? Does the owner retain the money?

Loan the horse close by, check on it regularly, and be prepared to take it back if there are problems. But if the owner wants to be 100% sure of no loss/no costs from this, then they need to either keep the horse themselves or sell.

You're asking the loaner to take a lot of risk, for no real gain, for a horse with "issues".

 

[splashgirl45]

i had a horse on loan and wouldnt have paid up any money unless i was buying it especially if there were maintenance issues..why should the loaner trust the owner with a large amount of money? . if there are question marks about the care the loaner would give the horse, dont loan it. i cared for my loan horse as if she was my own and the owner was half an hour away and was welcome to visit unannounced at any time. she did know my YO and my YO gave me glowing references and the owner visited once and realised she could trust me. there are good loaners out there your friend needs to get someone by word of mouth who is recommended

 

[Goldenstar]

The person taking on the horse would have to be mad to consent to this .

 

[ycbm]

There are decent loaners out there, just few and far between, sadly.

Good loaners are the vast majority. The problem is that from the outside, you can't tell which are the good and which are the bad until it's too late.

 

[SatansLittleHelper]

Ok, as a few people seem to have taken a few points from my OP and misread or misunderstood them....to clarify a few points:
* This would be written up and checked over by a solicitor .
* The potential loaner is in full agreement with the situation, in fact they are extremely happy with the idea.
* The horse does NOT have any significant or expensive issues, at no point did I say it did..??? It doesn't cost more to keep than any other horse...it purely has a couple of slightly different management requirements.
* I say substantial but apparently the deposit would be £1500 which basically only covers tack etc anyway. Horse is purely a happy hacker.
* I think we can all agree that just because you trust someone doesn't mean it can't go wrong, there are plenty of threads on H&H that display that.
* Horse is insured.
* It is not an aging or complicated horse.

 

[ycbm]

I think it sounds like a good idea. I would be concerned about the cost of the solicitor's work and I would want the money held in professionally managed third party escrow if I was the loaner.
.

 

[Wishfilly]

Ok, as a few people seem to have taken a few points from my OP and misread or misunderstood them....to clarify a few points:
* This would be written up and checked over by a solicitor .
* The potential loaner is in full agreement with the situation, in fact they are extremely happy with the idea.
* The horse does NOT have any significant or expensive issues, at no point did I say it did..??? It doesn't cost more to keep than any other horse...it purely has a couple of slightly different management requirements.
* I say substantial but apparently the deposit would be £1500 which basically only covers tack etc anyway. Horse is purely a happy hacker.
* I think we can all agree that just because you trust someone doesn't mean it can't go wrong, there are plenty of threads on H&H that display that.
* Horse is insured.
* It is not an aging or complicated horse.

If the loaner is happy with the idea, then I think that's the answer. It doesn't really matter what the rest of us think!

ETA: I'd probably want a specialist Equine solicitor to do the contract, as my concern would be a general solicitor might not think of all the relevant circumstances.

 

[Tiddlypom]

horse has a few management issues (nothing major)

It‘s this, SLH.

Will the loaner be both willing and able to cope with these management issues at her yard? This sort of detail often gets lost on a loan, loaner decides to cut corners, save time/money...

Yes, I am very cynical about loans .