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December 12, 2013

A Bill Of Sale: Too Much To Ask?

Debbie Bass, co-chair of the USHJA Joint Owners Task Force, staunchly defended a rule change proposal requiring a bill of sale in horse sales transactions that caused vehement debate. Photo by Mollie Bailey

Yes, said those gathered at the U.S. Hunter Jumper Association convention, Dec. 8-12 in Atlanta.

It was meant to be so simple, but I don’t think there was any issue with more confusion surrounding it than the bill of sale rule change proposal (GR702.1n).

The end result: the proposal was withdrawn at the USHJA Board of Directors meeting on Dec. 12. But that’s not the end of the story.

“Our messaging is in trouble,” said USHJA Joint Owners Task Force co-chair and general Joan of Arc of the bill, Debbie Bass. “One of the major concerns turned into the perception that the bill of sale for a horse sale or lease needs to be filed with the USEF, and that is not the case.

“This concept is so fundamentally simple; it’s a little confounding how you can further explain it,” she added. “You just need bill of sale with four pieces of information.”

That information includes the full sale or lease price, the full names and addresses of the principals and their agents, and the names of anyone other than the agents taking compensation in excess of $500. Dollar amounts of commission are not even required.

Nor does the rule require sales documents to be filed or kept or ever even shown to anyone at USEF, unless a complaint is filed—in which case the paper would be presented to simply determine if it exists, nothing more.

But there was surprisingly little support for the concept. Here’s a sample of comments various committees noted on the rule change proposal:

“This rule is unpractical.” - USHJA Young Professionals Committee

“Do not want sale price and commissions to be public knowledge or required to be reported in order to register a horse with the USEF. Cannot expect all exhibitors to use a standard Bill of Sale.” - USHJA Amateurs Task Force

“Transactions are not the business of the Federation.” - USHJA Children's/Adult Jumper Task Force

“This is overstepping the bounds between the governing body and the participants.” - USHJA Jumper Working Group

“Do not want to be forced to disclose the private transactions with owners.” - USHJA Pony Hunter Task Force

“To protect privacy of all parties.” - USHJA Professionals Task Force

Bass, of Gates Mills, Ohio, continually defended the bill, often against hostile complaints. Her intelligence, research, motives—all were insulted, but she kept taking another deep breath and calmly repeating her explanations. “Oh that, that doesn’t bother me,” she said of the rabid opposition, shrugging it off. “Now my committee is getting radicalized. This was scary, but after this reception, we’re pretty unhappy.”

By Wednesday afternoon, after quite a battering, she was looking a little deflated. You could tell she was disappointed, but her determination was still there. 

“I commend Debbie on still standing,” said USHJA President Bill Moroney at the conclusion of the Owners Task Force meeting. “Whatever happens to this rule, you have raised the temperature and the issue. You’ve stated that this is out there, and as owners, you’re not lying asleep at the wheel anymore. I commend you for having the fortitude.”

Over and over, she was asked, why don’t owners DEMAND a bill of sale and full disclosure? Why do business with someone who wouldn’t give you that?

Because owners are intimidated, she insisted. Owners are taught not to question anything. They are told this is how it’s done. Then they’re embarrassed to find out they’ve been swindled.

“But everyone has one of these stories,” she says.

The rampant—and illegal—abuse of the sales process through dual agency and hidden fees is making news. It’s only a matter of time before this hits the front pages of The New York Times, resulting in more bad press for the industry and, possibly, in government regulation someday down the road, such as is required in real estate transactions.

Trainers are the ones with expert knowledge. Owners hand over their confidence and their cash—frequently very large sums—to people from whom they expect professional behavior. Trainers need to be responsible for the effects of their expert advice, whether it’s where and when to show, what to do to prepare the horse for the ring, or which animal to purchase and at what price.

“I’ve been doing this for a long time, and I still have to beg for a bill,” said Bass. “I’m paying someone to look out for my interests, and I still have to beg. It’s creepy to buy a horse, and it should be exciting. I have to sit my husband down and give that speech every time, and it makes me feel fraudulent too.”

USEF general counsel Sonja Keating said that based on the number of calls the USEF regulatory department receives related to sales and commission questions and confusions, they’d need to significantly increase staff to handle the call volume if this rule passed.

But I ask, what better evidence than this that people are looking for help with this issue?

“This rule is exceedingly simplistic, asking for a bill of sale,” said Bass at the general rules forum. “I have to ask you, is that really too much to ask?”

And the response—not so much from her peers but from a room full of trainers, show managers and officials—was that yes, it was. Might that change if the conversation is available via live-stream broadcast so that owners and riders at their day jobs can follow the conversation? Bass thought it would and that this could possibly happen by next year’s meeting.

As one person stated, “In the discussion, the offenders made it pretty clear that they’re the offenders.” 

Bass believes, rightly so, that the USEF isn’t just charged with regulating competitions but is responsible for the overall health of the sport as well.

“We lose owners, and we lose the sport in the end,” said Moroney. “This is important to the culture of our sport. The owner deserves the right to have that receipt. It is important that this issue is not forgotten, or this will come back to haunt you.”

I wish that people had been more willing to listen to the arguments in favor of this, be open-minded enough to really understand what it was asking and consider if that might not be in the best interests of keeping people in—and enjoying—the sport. Bass may be out in front of the culture shift here, but it’s long since overdue. She deserves a standing ovation for her work and her fearlessness in presenting and defending it. It seems to be part and parcel of commendable USHJA work toward making all aspects of the sport and its governance more transparent. My hat is off to Debbie and everyone else who worked to advance this proposal. The discussion she initiated here is only beginning, not ending.

Read more in-depth discussion of this topic and many others that were debated at the USHJA annual meeting in the Jan. 13 print edition of The Chronicle of the Horse

 

Inner Bay
36 weeks 5 days ago
Bill of Sales proposal
As a member of one of many USHJA committees that examined this proposal, and as someone who was in attendance in Atlanta and spoke about several aspects of it, I'm somewhat concerned at the direction... Read More
Linn
37 weeks 1 day ago
How is the sale even
How is the sale even considered legally complete if there is no bill of sale? On the other hand, I can't believe how simplistic the USEF ownership transfer form is. The stock horse breed associations... Read More

Comments

csmorris
37 weeks 2 days ago

Bill of Sale

If the owners are not receiving a bill of sale, why do they continue to do business with that trainer? Obviously good business sense means having a bill of sale, so why continue to have to beg for one? If one is not offered prior to the sale and transfer of money, walk away from the transaction. I don't think that having this in the rule book is the right place for it - USEF has made it clear in the past that they do not get involved in ownership disputes - but perhaps the education aspect needs improvement.
Linn
37 weeks 1 day ago

How is the sale even

How is the sale even considered legally complete if there is no bill of sale? On the other hand, I can't believe how simplistic the USEF ownership transfer form is. The stock horse breed associations require addresses, phone numbers, and email addresses on their transfer reports, but then again they must also mail in the horse's registration certificate so the new owner can be recorded on the certificate. As someone who spends time tracking down USEF competition history on several horses per year, I am frustrated with the shortcomings of the USEF website compared to how quickly I can negotiate the AQHA and APHA systems and find the information I need, with data going back decades. I agree that the current USEF transfer form does not require enough information, but I draw the line at reporting a horse's selling price and any commission fees. Yes, price disputes happen (too frequently in my opinion) but this is not the way to attempt to enforce what should be a common business practice.
Inner Bay
36 weeks 5 days ago

Bill of Sales proposal

As a member of one of many USHJA committees that examined this proposal, and as someone who was in attendance in Atlanta and spoke about several aspects of it, I'm somewhat concerned at the direction this discussion (sparked by the rather provocative headline running over the COTH story-- i.e. "A Bill of Sale: Too Much To Ask?") has taken. Debbie Bass is to be commended for bringing this issue to everyone's attention of all USHJA/USEF members. My own observation is that there is widespread, strong, practically universal support of the concept that no sales transaction should take place without a formally written Bill of Sale (a few thought that giveaways shouldn't be included, while others thought they should be). In fact, I have heard no one speak against the notion that a Bill of Sale should be an integral part of the purchase or transfer of a horse from one owner to another. That doesn't automatically mean that the knee jerk response should be to support a proposed USEF rule that: 1) arguably oversteps the purview of the mission statement of either the USHJA or the USEF 2) is not able to be enforced 3) does not contain any requirements to ensure compliance in advance of a dispute 4) does not provide for recourse by either party in the event of a disagreement 5) cannot account for transactions taking place between individuals that are not members of any discipline group or of USEF 6) should not be construed as a substantial protection against abuse of existing state statutes covering contract/sales/fiduciary matters. None of the above concerns should IN ANY WAY be regarded as a feeling that owners and trainers involved in a sale transaction should not execute a Bill of Sale, which provides protection to all parties to the agreement, not just owners. It's worth noting that normally the only parties to a Bill of Sale are the old owner and the new owner, not trainers, not agents, not middlemen. A Bill of Sale is not always a comprehensive sales agreement executed at the level of detail sought for the purposes of this rule change. But a simple Bill of Sale is already one of several acceptable proofs of ownership asked for when submitting a change of ownership to USEF. And the USEF already has on the books rules which allow for the suspension of individuals found guilty by courts of law. Legal protections can be invoked by owners who insist they will not enter into a transaction without a Bill of Sale. And reputable, honest trainers will not mind seeing to it that an owner and buyer are both provided with one during the course of a sale transaction. The problem is that even if the sentiment behind it is laudable, the proposed rule itself is defective in many ways, and therefore not supportable in the opinion of many intelligent people (who raised their hands against it when asked); this doesn't mean they are 'against owners.' In short, the answer to the sensational headline is equivocally: "NO, IT'S NOT TOO MUCH TO ASK," but there are other, more efficient, more proper, and most importantly, more effective ways to go about it than a weakly written USEF rule. As the Owner's Committee meeting concluded, a list of action items was generated at the direction of USEF President Chrystine Tauber, who was in attendance. These items (educational and awareness initiatives regarding proper sales practices, and consequences that could result from legal judgements) are likely to be much more effective at achieving the aims of the proposal's proponents than the rule, if passed, could be. It's also worth noting that Bills of Sale can result in exposure of the parties to it to state sales tax liability…this in itself is a can of worms that few wanted to touch…but could be a related and unexpected consequence of a mandatory requirement. Mary O'Connor (NY / VA) USEF r H/J/HEq since 1992 USHJA Certified Trainer
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