In Part I, previously posted, we reviewed requirements in the FAC relating to required provisions in a bill of sale and requirements to disclosure of medical conditions. However, a bill of sale is not the only written agreement required by the FAC, and if you are an agent selling horses for customers, you may be required to have several other written agreements even for a single horse sale.
The FAC requires that an agent acting in dual capacity (i.e. for the owner and purchaser) may do so only upon written consent from the purchaser and the owner, each of which must have knowledge of the dual agency prior to the sale. In some instances, it may be unclear to an owner or purchaser whether an agent is a dual agent. For this reason, while dual agents are required to have a written agency agreement, it is advisable for agents to utilize an agency agreement for all types of representation, so that the scope of representation is clear to all.
The FAC seeks to crack down on undisclosed third party commissions by requiring that payment of commissions (whether in the form of consideration, compensation, fees, gratuity or any other item) with a value exceeding $500 by any person or entity, other than the purchaser or owner being represented by the agent, are unenforceable unless the agent receiving and the person or entity making the payment disclose the payment to the purchaser and the owner in writing and each principal represented by the agent consents in writing to the payment. Dual agents have an increased burden under the FAC and must disclose a commission of any amount in a writing signed by the party against whom enforcement of the commission payment is sought. The FAC provides a mechanism for a seller or purchaser to review the accuracy of the disclosed commissions by requiring an agent to provide its principal(s), upon request, with a copy of all financial records and financial documents in the possession or control of the agent pertaining to the transaction, excluding only the owner’s work product used internally for the evaluation of the horse.
Finally, the FAC requires trainers and agents to disclose in writing their ownership interests in horses being sold or recommended for sale to customers of the trainer or agent. If a trainer or agent purchases or recommends the purchase of a horse in which the trainer or agent has a legal or equitable ownership interest, either directly or through an entity in which the agent or trainer exercises any ownership or control, the principal of the trainer or agent must have prior knowledge and provide written consent.
It is critical that any person involved in the sale of a horse in Florida comply with the requirements in the FAC because any violation resulting in actual damages to a person are considered unfair and deceptive trade practices and give rise to an award of actual damages, attorneys’ fees and court costs, and civil penalties. Many other states have their own laws governing equine transactions, with similar consequences for violations. If you are planning on buying or selling horses as owner, seller, trainer or agent, there is no time like the present to review your agreements and best practices relating to horse sales in the states where you conduct business.
If you have any questions relating to this topic or other equine law matters, please contact Karin Corbett, Esquire at 484-531-1702 or firstname.lastname@example.org.
ABOUT KARIN CORBETT
Karin Corbett is a business attorney and litigator who effectively prevents, resolves and litigates legal disputes for businesses and individuals alike in a variety of industries; but her focus is primarily in the construction & real estate and equine industries.
As a construction and real estate attorney, Ms. Corbett negotiates contracts, analyzes and advises clients on all types of business matters, litigates contract claims.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 140 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eleven offices serve individual and corporate clients in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
You can connect with Offit Kurman via our Blog, Facebook, Twitter, Google+, YouTube, and LinkedIn pages. You can also sign up to receive Law Matters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.
MARYLAND | PENNSYLVANIA | VIRGINIA| NEW JERSEY | NEW YORK | DELAWARE | WASHINGTON, DC