Boarding disputes and the law
There’s nothing more disheartening to a barn owner than a boarder behind on his board. A horse requires constant attention, food and care, veterinary and farrier services, and other expenses that cost the stable owner dearly. If a boarder falls behind in their payments — or worse, disappears — what options does a stable owner have to properly care for the horse and get paid the board they are owed?
First step: prevention
Every barn owner needs a good written boarding contract which includes all financial matters:
- payment terms – usually a fixed monthly amount, plus applicable taxes
- method of payment – post-dated checks are useful, wire transfers etc.
- Termination provisions – how much written notice must a boarder provide to vacate the barn?
- boarding school contact details
- authorization and agreement around veterinary and farrier fees
- default provisions, including late payment interest charges, information on lien rights and other remedies
- possibly a dispute resolution provision requiring negotiation, mediation or arbitration of disputes
A good repo agreement will avoid most disputes, clearly outline the barn owner’s payment expectations for repo and other expenses, and address tricky issues related to repo termination.
Financial due diligence
In addition to a written repo agreement, a barn owner must think like a landlord. If you were interviewing a tenant for a residential lease, you would need photo ID, references, possibly proof of employment, and sometimes a completed credit application including banking information. . Some landlords will perform a credit check on a potential tenant. Some may request a letter from an employer.
In short, owners want to know financial situation of a proposed tenant before signing the lease. If the proposed tenant is financially sketchy, he will not get the apartment. Given that horse boarding can be the same amount or more than residential rent, why don’t barn owners make the same demands?
Once the horse has arrived at the stable, implement the second step: consistent application terms of payment in the boarding contract. Don’t be lazy; if the pension is due on the first of the month, it is due on the first. Interest accrues in the event of late payment. A barn owner must ensure payment terms are understood by all boarders and are enforced equally and effectively. If you start authorizing payment later in the month, it can easily roll over to the next month and you’re two months behind. Be diligent in enforcing the terms that the resident signed at the start of the relationship. You are not a bank or a charity. Clear communication and diligence go a long way towards a successful boarding arrangement.
If a boarder is late on board and fails or refuses to pay outstanding bills, the third step is collection. A barn owner has a few options to recover from a non-paying boarder.
- The boarding agreement could require the mediation of a recovery dispute, which means that both parties go before a mediator to try to reach a settlement or alternatively, the agreement could require that an arbitrator be chosen who will settle the dispute between the parties. The arbitrator’s decision can be made into a court order.
- Small Claims Court is a place to collect debts up to $35,000 in Ontario. In other provinces, the upper limit will vary. It is designed so that people can sue for unpaid accounts without the need for lawyers. He is very friendly.
- Superior courts are used to collect debts that exceed the limits of Small Claims Court. It is best to hire a lawyer to access these courts.
- The exercise of lien rights for unpaid accounts is unique to the equine industry among several other industries. A stable owner has a lien on any horse in his possession for unpaid boarding and other expenses.
Throughout Canada, stable owners have the right to keep and sell a horse or other stabled animal for reasonable unpaid boarding and care charges. In some provinces, this right is set out in provincial law, available online.
In Ontario, the Innkeepers Act, RSO 1990, cI7, provides that the owner of a boarding stable or boarding stable has a lien on every horse or other animal boarded at the stable for reasonable boarding and care charges for the horse , the animal or the car. A lien is the right of a creditor in possession of property to retain the property until the debt owing has been paid or satisfied.
Where the barn owner has a lien on a horse for the cost of care or maintenance, and the unpaid amount has remained unpaid for two weeks, the barn owner may, in addition to all other legal remedies , sell the horse at public auction to collect the fees due. The owner of the stable must give two weeks’ written notice of the proposed sale by advertisement in a newspaper published in the municipality where the stable is located; if there is no newspaper published in the municipality, in a newspaper published nearest to the stable.
The advertisement must state the name, if known, of the person or persons who brought the horse to the stable, the amount owed, the name of the auctioneer and the details of the auction, and provide a description of the horse.
The owner of the barn may apply the proceeds of the sale to the payment of the sum due and the expenses of publicity and sale, and must return the surplus, if any, to the person entitled to it on demand who is made (usually the owner of the horse).
The courts have upheld a stable owner’s lien rights and also stated that a stud owner has a separate lien for stallion service charges. In a case, decided in 1974 in Ontario, the owner of the stud farm was entitled to a lien on two mares bred by his stallion. Indeed, the mares foaled under the care of the stud and the privilege extended to the two foals. If, while the property is in the possession of the creditor, a change occurs in the property, as in the case of the birth of two foals, the court concludes that the creditor should have the right to retain the offspring as well as the two originally received mares.
Catherine Willson is a practicing attorney at the law firm Goldman Sloan Nash & Haber LLP in Toronto, Ontario. This article contains general information only, based on the laws of Ontario and is not intended to provide legal opinion or advice. Readers should consult an attorney regarding the application of the information contained above to their particular situation.