Have you ever wished that you could cut your horse-care costs in half? Or maybe dreamed that your horse could be exercised more times throughout the week? There’s a way to achieve both those goals and retain ownership of your horse. It’s called the “half lease.”

[READ: Avoid These Horse Buying Mistakes]

In this type of agreement, the owner of the horse or lessor splits the horse’s care expenses and riding time with a lessee. It can be a beneficial way to save money on board, feed, vet bills, etc., and it can be great for your horse if your own saddle time is limited. With respect to the lessee, a half lease can act as a steppingstone into horse ownership.

However, it’s not an agreement that should be taken lightly. In fact, it’s a deal that should be in writing?every time.

“I receive numerous calls every week from people who’re involved in disputes over arrangements, such as leases and half leases. Yet nothing is in writing,” says Julie Fershtman, attorney at law and equine law specialist. “Without a written contract that clarifies the arrangement between the parties, resolving these types of disputes is never easy, quick, or cheap,” she notes.

So what should the contract include? That’s where we, and Julie, come in. tapping her expertise, we’ll share four hypothetical scenarios to show the importance of certain contract provisions. We’ll also go over all the bullet points every contract should include, should you decide to write your own. (Note: This list will also be helpful if you have an attorney draft it.)

If you decide to half lease your horse, we hope this article will help protect you and your lessee in the event of an incident.

Scenario #1
Mary is half leasing Bandit, her 15-year-old Quarter horse gelding, to her friend Kevin. During one of Kevin and Bandit’s rides, the horse spooks at the delivery truck driving past the arena. The quick movement unseats Kevin, and he falls off, breaking his arm. Kevin then decides to sue Mary for the cost of medical expenses.

In this case, Mary could’ve attempted to avoid a costly lawsuit, and more, by using a carefully worded release of liability.

This is one of the most important factors for the horse owner to consider, and Julie stresses that “homemade” releases are more likely to fail in court than those drafted by attorneys.

“Because their horses are used in a half lease, the owners accept a degree of risk that someone might be injured by that animal,” says Julie. “I wish more people were aware of this risk. To me, the risk of liability is far more significant than the risk of injury to the animal. I don’t mean to diminish the value of the horse, but when a person is killed or seriously injured, it could be millions of dollars in liability. If the animal is injured, that number is far less.”

Keep a couple of important factors in mind with the release of liability.

First, most states will enforce a properly worded release of liability, so make sure that your state does (more on that later), and make sure your document meets state law requirements, as they all differ.

“It’s important to remember that people who sign releases can and do sometimes sue. The release might cause a dismissal of the case, but not always,” says Julie.

Second, don’t assume that a release will be effective for a minor who’s injured. A release signed by someone under 18 isn’t valid. Even if the parents sign for the child, there could be some issues. Some states won’t enforce it and some will.

“A lessor who’s uninformed accepts a tremendous liability risk in that situation,” Julie warns.

To find out about which agreements your state allows and will enforce, it’s best to speak with an attorney.

Another action you can take as the lessor, suggests Julie, is to purchase an appropriate liability policy, such as a personal horse owner’s liability insurance policy. However, the insurer should be notified that the horse is subject to a lease arrangement.

With this type of insurance, she adds, the policy is designed to protect you if someone were bitten, kicked, struck, or thrown by the horse, and, at the very least, provides a legal defense.

Scenario #2
Kara is half leasing Jazzie, a 10-year-old Appaloosa mare, from her trainer. She and Jazzie get along great, and the arrangement is working well. A month into the half lease, Kara receives an unexpected bill from her trainer for half the cost of Jazzie’s hock injections and two chiropractic appointments. Though Kara agreed to pay half of Jazzie’s board and vet bills in her contract, she had no idea the mare was on such an expensive regimen.

There are two things Kara could’ve done to avoid the surprise bill. First, she should’ve done her homework and talked extensively with her trainer about Jazzie’s care and upkeep and all of her veterinary expenses.

“The lessee needs to be very comfortable with the horse that will be half leased. If willing to enter an agreement, the lessee should do his or her homework and understand the history of that particular horse?any quirks or propensities and special care needs,” says Julie.

Second, this particular issue could’ve been addressed in Kara’s contract. Along with the provision of all the fees the lessee is responsible for, the trainer could’ve listed all of the extra care Jazzie receives on a regular basis. (These can be as little as extra supplements in the mare’s diet to more costly chiropractic, equine dental, massage, acupuncture treatments, etc.)

Or, Kara could’ve insisted that the contract cap her expenses to a certain limit. Another option to cover this in the contract would be to set an approximated flat fee per month, rather than half the expenses.

[READ: 7 Tips for Buying the Right Horse]

Scenario #3
Cody half leases Bella, his Arabian mare, to his friend Bill. Bill rides the mare three times a week, and both men are happy with the arrangement. After six months of half leasing, Bill loses his job and can no longer afford to pay half of Bella’s board and care. The contract was for one year, and there was no provision for this unexpected event. Cody was counting on the half lease as a way to affordably keep Bella and decides to sue Bill for the remaining six months’ worth of board and care.

In this situation, a solution could’ve been written into the contract.

“If the match of the horse and the lessee is unsuitable, or if economic or geographic circumstances change, the lessee may want to have an escape hatch built into the contract,” says Julie.

Scenario #4
Natalie half leases her 6-year-old Paint gelding Jack to Tess. After nine months into the agreement, Tess decides to take Jack to a local show. While there, the gelding colics severely and Tess calls her vet. The doctor determines that it’s an emergency situation, and that the gelding needs immediate surgery. Natalie is out of town and can’t be reached, but Tess gives the vet the green light. When Natalie returns, she refuses to pay for half of the surgery.

Though not all emergency situations or injuries can be accounted for in a contract, there are three options on how to cover this in the agreement.

“Option one says that if anything happens under the lessee’s watch, the lessee bears responsibility. Option two says that if the lessee was negligent in the use of the horse?and that negligence caused the injury?then the lessee is responsible for the fees and costs. And option three says that the lessor and lessee split all costs during the terms of the lease,” says Julie.

To take it one step further, the agreement can also be specific about veterinary treatment.

“The contract can be clear to say that no veterinary treatment can be arranged, except in a true emergency, without prior approval of the lessor. Also, the document can include a contact person in the event the owner can’t be reached.” One last step owners can take to help prevent a scenario like this is to have prearranged plans with their veterinarians. This way, the vets know the owners’ intentions and that, ultimately, they make the decisions, Julie recommends.

The Take-Away
While these scenarios might seem extreme, they do illustrate some of the major problems that can come up in a half-lease agreement. These problems are why Julie stresses the need for a written contract.

“This is a relationship that really deserves to be memorialized in a carefully worded document,” she says.

Though a half-lease contract doesn’t have to be drawn up by an attorney to be legal, Julie highly recommends working with one. Just make sure the attorney you choose is comfortable drafting a half lease, as very few attorneys are equine specialists.

“Without an attorney, people may miss critical details important for the document. In my practice, I deal extensively with liability,” Julie says. “I’ve been asked by businesses and insurance companies to review releases of liability that were drafted by people on their own. Some of them just don’t measure up, and they won’t hold up in court.

“People can draft binding contracts, but they accept the risk that the contract might not have proper language that would render it enforceable,” she adds. “A trained attorney will protect the client with language that’s more likely to be enforced.”

You must consider many factors when you decide to half lease your horse. But with the insights we’ve provided here, you stand a better chance of not only protecting yourself and your horse, but also of having a happy half-lease arrangement.

The Important Points
If you’re looking to half lease your horse, use Julie Fershtman’s list as a basic template and starting point. Consider all these provisions.

• How long the agreement will last, complete with start and end dates.
• A schedule of the horse’s use?when each person can ride or otherwise use the horse.
• What payments are due, when they must be made, and to whom.
• Obligation for each party to pay the horse’s maintenance expenses or to submit the payment directly to someone else (e.g., the boarding stable, farrier, etc.)
• Who pays major veterinary expenses.
• The type of use of the horse?what’s permitted and what isn’t.
• Where the horse will stay during the agreement.
• Restrictions (e.g., the owner may not want the horse to do certain events).
• Liability waiver and release with indemnification (a transfer of risk of litigation) release, where allowed by law, and with state-specific language.
• Who’s allowed to make decisions in a medical emergency, and who’ll pay for those procedures as well as follow-up care and expenses.
• Equine Activity Liability Act language (some states require this).
• How the arrangement will end, including advanced notification for
• termination.
• An optional “escape hatch” clause in case a party’s circumstances or interest level changes.
• A standard of care for the leased horse during the arrangement.
• Which state’s law governs the arrangement, and where disputes
• should be brought.
• How any legal disputes will be addressed, and who pays the legal fees.

The Expert: Julie Fershtman
Julie is one of the nation’s most well-known and experienced equine law practitioners; she’s been practicing for 26 years. She’s currently a shareholder with Foster, Swift, Collins & Smith, P.C., in Farmington

Hills, Michigan. Julie serves as an officer of the American College of Equine Attorneys, and she’s one of less than 15 lawyers to ever become a Fellow in the organization.

She’s received numerous awards from prominent equine organizations such as the Outstanding Achievement and Partner in Safety awards from the American Riding Instructors Association, and the national Partnership in Safety award from the Certified Horsemanship Association. Julie is an author or co-author of the Equine Law & Horse Sense book series, and she’s written over 200 articles on equine law for over 400 publications and Web sites. Learn more at equinelaw.net.