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Undisclosed commission?!

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  • Undisclosed commission?!

    Need some advice on an unfortunate/awkward situation around a horse purchase and undisclosed commission.

    I have been riding at a barn and with a trainer that i really like for about 2 years. A horse came up for sale who was already in the barn owned by someone else but was in a program with said trainer, so I paid to have lessons on him, liked him, and decided to buy him. Trainer then took horse to be vetted, advised me on results of vetting, and 'negotiated' purchase price with seller. Barn manager then drew up a contract of sale that disclosed the terms, price, and payment agreement between the seller and I, which seller and I both signed. Seller then moved on to another barn, and I continued to board the horse in a program with said trainer.

    Months after the purchase, I receive bill from trainer for 10% commission on purchase. I am surprised at this because commission never came up once in conversation nor was there any mention of it in any of the contracts. Since it was never brought up, I presumed commission would be paid by SELLER for trainer marketing the horse, and figured that was an agreement between them that had nothing to do with me.

    Normally I would expect to pay a commission in a purchase for the work involved, but in this case the trainer did very little for this sale, other than take the horse to the vetting and stand with him, and spent about 20 minutes advising me on PPE results and purchase price. I already paid her separately for the lessons where she evaluated me riding the horse and also already paid her for the transportation to/from the vetting.

    Trainer knew that this was my first time purchasing a horse and despite this being a situation of agreed-upon dual agency, I still would expect full transparency and disclosure regarding any commissions. I would also presume that she is asking the seller for commission as well, so trainer is walking away with a hefty 20% on a mid 5 figure purchase for doing what was in my opinion very little work. Is this an acceptable practice?? I could see paying a commission if it was agreed upon and disclosed ahead of time but it was not, she did not 'find' the horse for me or even have to sit on him either, and as far as i'm concerned the only thing she hasn't been paid for is her time she was with him during ppe.

    As mentioned I like the barn and trainer and want to stay there because the operation is good but am beyond frustrated that trainer has put me in this awkward position of not disclosing the fact that I owed her a commission until months later. How should i Handle this seeing as how i don't want to leave the barn???

  • #2
    Many years ago (when dinosaurs roamed the Earth) a 20% commission to intermediary (Trainer in this case) was not unheard of.
    The BOS contract you signed: did it mention any commission? Amount? To be paid by??
    How was Barn Mgr involved in the sale?

    Perhaps this added 10% was to be paid by Seller to Trainer (or Barn Mgr?) covertly & for whatever reason did not happen.
    IMHO, you now have some options:
    1 - ask trainer why this 10% was not mentioned to you until now, pay & stay on good terms
    2 - refuse to pay, as contract did not include this commission, expect to have some friction w/trainer
    *friend of bar.ka*RIP all my lovely boys, gone too soon:
    Steppin' Out 1988-2004
    Hey Vern! 1982-2009, Cash's Bay Threat 1994-2009
    Sam(Jaybee Altair) 1994-2015

    Comment


    • #3
      That's BS. I would refuse to pay. If there is friction from trainer regarding this, trainer is out of line. Trainer is already out of line and apparently has no shame as I agree, trainer did next to nothing for what trainer is charging. Trainer has some serious nerve. You SURE you "really like" this trainer? This is shady business practice. You can do better then this trainer.

      Ps. I don't care if it's "industry standard" or common practice, it is and always is and always will be BS. This is how/why H/J trainers get a bad rap. Those of us who don't operate like this get really super frustrated when our colleagues make the entire industry look shady.
      Power to the People

      Comment


      • #4
        This absolutely should have been disclosed up front, you are correct there.

        Not quite as correct that trainer has not worked to produce this result. She built & maintains the program that has the nice horse that you liked, didn't have to spend money traveling to find, and got to lesson on at length before making a mid 5 figure purchase.

        Were you taking lessons on this horse, and then moved towards an interest in purchasing him? Or were you interested in purchasing him, and then took lessons on him to pursue that interest? Two different things. Fees towards lessons in Scenario 1 cannot really be held against a trainer trying to recover a commission. Fees in Scenario 2 potentially could.

        10% definitely sounds like you and the seller split the increasingly typical 20% commission that you would have each had to pay to sell to or buy something outside the barn.

        This could be covered in the boarding contract, but if you're not a boarder you may not be aware of that. And in typical trainer fashion she perhaps forgot to reiterate what's in a document that the majority of horse-buying clients have signed. Still not saying that is right, but if she just brazenly sent you a bill this isn't screaming shady horse trading. Typical trainer disconnect when it comes to running a business? Totally.
        EHJ | FB | #140 | watch | #insta

        Comment


        • #5
          From what you said this trainer and her staff earned the commission...Sales and showing is how trainers make money. Board and training are a wash.

          "Trainer then took horse to be vetted, advised me on results of vetting, and 'negotiated' purchase price with seller. Barn manager then drew up a contract of sale that disclosed the terms, price, and payment agreement between the seller and I, which seller and I both signed."

          Many barns charge 15% commission for one side or 10% to each side if sold within the program. Nothing out of the ordinary. If trainer had bought and sold outside of the program then they would have made more money. This is often stated on the rate sheet. And I am in Seattle...(since your screen name is PNW).

          I just pulled Hillcrest's rates on their website as an example...scroll to the bottom.

          https://www.hillcrest-training.com/horse-show-rates/

          "Sales Commissions: 15% on Sales and Leases, minimum commission is $1500. In barn Sales & Lease commissions are discounted to 10% for buyer and 10% for seller. Purchase and Lease prices are fully disclosed. Buyer pays trainer travel expenses. Seller pays all advertising, photo, video purchases to market sales horse. "

          Comment


          • #6
            Check with your state laws regarding commission.
            Only two emotions belong in the saddle: One is a sense of humor. The other is patience.

            Comment


            • #7
              Yes, trainer should have told you about commission in the beginning. But if I were in the same situation, I would have expected to pay a commission and would have asked rather than assumed the seller was picking it up. A hidden commission would be when the trainer didn't disclose the cut they were taking -- like bumping up the price you paid, having the check made out to them, then passing along only a portion to the seller. This doesn't seem unethical, what you are describing here, just bad communication. Talk to them and let them know. I would expect to at least pay something for the time they took with the vetting and so on, unless you plan to pick up and move. Stuff like this can fester if not addressed and cause problems both ways, so just have an adult discussion. And make sure you get all this info up front next time you are buying and selling (and hope trainer learns the same and is more forthcoming from the start in the future with other clients).

              Comment


              • #8
                First, you need to have a non-confrontational conversation with the trainer. For example, I would start with something like, "Oh, hey, I just got your bill for commission on my purchase of Dobbin back in May. Because we didn't discuss it at the time, I just assumed that the seller was covering your commission." Then see what she says.

                But, I bought a horse several years ago under pretty much the same circumstances as you except that I handled the PPE and I fully expected to pay commission. When I decided to go ahead and buy the horse, I asked the trainer directly how much I owed her for commission on the sale. She declined to collect any, saying her policy was to not charge commission when all parties involved are in her program, which I thought was nice, but, again, I was fully prepared and expected to pay commission.

                So, yeah, this should have been fully disclosed up front, but it's a perfectly reasonable charge, IMO. If you really like the trainer and the barn and want to stay in her program, then just write a check, smile, and say, "thank you."
                "Facts are meaningless. You can use facts to prove anything
                that's even remotely true."

                Homer Simpson

                Comment


                • #9
                  Only in horseland does a buyer pay a commission. Unless it was disclosed upfront and in the sales contract, you are under no obligation to pay a commission. In real estate only the seller pays the commission which is split between the buyers and sellers broker/agent, usually 6% which is split. It is always disclosed.

                  I had this happpen to me and I was asked to leave the barn because I would not pay. I was happy to leave and the trainer lost out on future training and show fees. Her loss, not mine.

                  Comment


                  • #10
                    Originally posted by 2DogsFarm View Post
                    Many years ago (when dinosaurs roamed the Earth) a 20% commission to intermediary (Trainer in this case) was not unheard of.
                    HA! My trainer still charges 20% on sales, 15% on purchases staying in barn, and 20% on purchases outside the barn.

                    I don't mind paying her 15% to select a horse - she's GOOD! And her selections result in successful, winning combinations. She's a good "picker" and worth the extra money. A good selection upfront saves money and heartache down the road.

                    Comment


                    • #11
                      Apparently you saw and signed a contract which detailed all the terms of the sale. Regardless of what is common practice in the hunter world, if the commission wasn't mentioned at the time or in the contract, I don't think you should feel any obligation to pay. However I wouldn't be surprised if you have to leave the barn if you decline.

                      Your trainer is the one who created this awkward situation. Whether it was due to bad business practices or whether she's just trying to extort some extra money from a past transaction, I probably wouldn't feel comfortable continuing in the program of someone who thinks that this kind of behavior is okay.

                      www.laurienberenson.com

                      Comment


                      • #12
                        I agree with LaurieB. You had a contract, you and seller both signed it. You said it was even drawn up by the Barn owner, so presumably the trainer had the ability to put in her commission costs. I don't know what she was thinking because she didn't tell you. Whether or not there is an expectation of a commission, the fact there will be one, how much it is, and who is paying it needs to be disclosed. If it's not in the agreement, you didn't agree.

                        I would try to meet with her and the barn owner to find out why you are being billed so late for something that wasn't agreed to at the time. Maybe the trainer needs to understand how to better protect herself and can chalk this up as a learning experience. If you decide you should pay it, you can very likely negotiate a lower price, seeing as it was her mistake, not yours. She is responsible for her commissions.

                        I worry that this is an attempt to get money from you because she failed to get it in another way, or she is financially struggling right now and saw an opportunity.

                        Weeks later isn't an oversight on 10% of tens of thousands.
                        Last edited by LilRanger; Sep. 7, 2018, 12:10 PM. Reason: edited for typos!

                        Comment


                        • #13
                          Geez, people. I really don't think we know enough about the situation to be painting the trainer as some kind of evil, unscrupulous businessperson. OP, I strongly advise you not to climb on the high horse some people here are trying to sell you until after you've had a conversation with the trainer.

                          To paraphrase Hanlon's Razor, never attribute to malice that which is adequately explained by inexperience, poor communication skills, or lackadaisical recordkeeping.
                          "Facts are meaningless. You can use facts to prove anything
                          that's even remotely true."

                          Homer Simpson

                          Comment


                          • #14
                            OP stated that the contract was drawn up with the buyer and seller as the parties, no mention of the trainer/agent signing the contract. While that would certainly have been the *best* time to raise the issue of who was responsible for commission, if one was being charged, a signed contract between a buyer and a seller wouldn't necessarily answer the question of the obligation between the buyer and his/her trainer/agent. That said, I would bet that somewhere in the barn policies/documentation, there is a policy that says 10% commission charged on all purchases, and it doesn't carve out in-barn. I moved barns earlier this year, and every barn I looked at addressed commission in their documentation.

                            Comment


                            • #15
                              What Madison said. The purchase agreement for the horse, between buyer and seller, would not have covered the commission between buyer and agent or seller and their agent. It is in everyone's best interest that those agreements remain separate, and that all commissions are paid on top of purchase price (buyer) or out of purchase price (seller).
                              EHJ | FB | #140 | watch | #insta

                              Comment


                              • #16
                                The way I read the original post the contract that was signed was not between the buyer/seller and the trainer. It was the transfer or ownership of the horse. The trainer's commission does not have to be in there.

                                PNWhunter92 does your trainer have a rate sheet?

                                One thing that you posted here that will get you in lots of trouble in your life is forgetting that there is skill to picking a horse and matching a horse and rider. Not everyone has that skill. You saying your trainer did nothing is negating the fact that there is knowledge there that clearly you like because you asked your trainer's opinion on this purchase.
                                The commission is not just paying for the trainer's time, it is paying for their knowledge.

                                Edit to add - I typed too slowly. The two posts above mine said the same thing while I was typing.

                                Comment


                                • #17
                                  My advise to my clients (not that many of them follow it) is "up front and in writing". If it is not in the contract, I would ask the trainer why it wasn't in the contract. Handle it carefully if you want to keep the trainer but it may be trainer overlooked the commission piece. Trainer may waive fee if you ask nicely.
                                  kenyagirl

                                  Comment


                                  • #18
                                    I agree about the contract not being between the trainer and the buyer/seller. that is a good point. But the trainer billing the buyer *months* later is a red flag. Is it a sign of poor record keeping? Poor communication? a matter of the buyer not understanding her boarding contract and the trainer having to give her a printed bill or she won't believe it? We don't really know. Certainly as it is presented, the buyer is now in the hot seat as far as her next move, and due to the lateness of the bill, potentially has the upper hand as far as paying this. She will of course, have to deal with whatever fall out happens.

                                    As I see it, only really good communication and calm acceptance of her own decision will keep this from heading to drama-town.

                                    Comment


                                    • #19
                                      Boggles my mind how in this day and age things like this are still happening in the horse industry. Not necessarily pointing finger at you but reading about your situation brings to light to never assume anything. There are plenty of educational resources to help avoid this very situation. Goggle is your friend. I hope you get this worked out to your satisfaction.

                                      Florida, Kentucky and California have specific legal requirements on equine bills of sale.

                                      In addition to the link, I have listed out the what the USHJA publishes as a resources guide on agents, purchases and bills of sale. Perhaps COTH could "pin" this information somewhere prominent on the bb to help others.
                                      Bold- red text covers commissions and disclosures of commissions.

                                      https://ushja.org/programs/bestPract...thInStride.pdf

                                      Agent Disclosure Agreement Checklist
                                      ‰ Date of agreement
                                      ‰ Names and Addresses of Agent
                                      ‰ Names and Addresses of Purchaser
                                      ‰ Statement of Agent’s expertise in the industry and purchase/sale of horses
                                      ‰ Statement of Agent’s intent to act as agent for the purchaser for the horse(s)
                                      ‰ Statement of Agent’s agreement to locate suitable horses for future purchase and to negotiate the purchase.
                                      ‰ Statement of requirements for purchase outlined by the Purchaser
                                      ‰ Agent acknowledgment of acting as Purchaser’s fiduciary with respect to his obligation under this Agreement.
                                      ‰ Statement of what acts or omissions would constitute a breach of Agent’s duties including but not limited to: (a) communicating any false or misleading information to Purchaser regarding the horse under Purchaser’s consideration; (b) failing to disclose to Purchaser the true price at which any horse under consideration by Purchaser has been offered for sale; (c) arranging with any person or persons the sale of a horse to Purchaser at an inflated price; (d) entering into any other agreement with any person with respect to any transaction involving the sale of a horse to Purchaser, other than an agreement which has been fully disclosed to Purchaser and which Purchaser has consented to in writing; (e) failing to disclose to Purchaser any ownership interest of Agent in any horse Purchaser has under consideration; or, (f) otherwise acting in any manner contrary to the best interests of Purchaser.
                                      ‰ Agent acknowledgment of duty to disclose to Purchaser any adverse/dual interest Agent has in a transaction
                                      ‰ Statement of whom Agent is employed by concerning the horse under consideration and Agent’s compensation for those services.
                                      ‰ Statement that agent is not employed by any other persons or entities regarding a horse under consideration by Purchaser and is not being paid any additional compensation other than that expressly mentioned in agreement.
                                      ‰ Agent’s remuneration including commissions for services in connection with the purchase
                                      ‰ Statement of when Agent payments by Purchaser will be made and in what manner
                                      ‰ Agent acknowledgment that failing to disclose and receive consent from Purchaser for any adverse/dual interest Agent may have in a transaction concerning the subject matter of this Agreement, including but not limited to acting as a dual agent, may constitute fraud and subject Agent to civil and/or criminal prosecution.
                                      ‰ Signature of Agent Date of Signature ‰ Signature of Purchaser Date of Signature

                                      Purchase-Sale agreement Checklist
                                      ‰ Date of agreement
                                      ‰ Names and Addresses of Seller and Seller’s Agent
                                      ‰ Names and Addresses of Purchaser and Purchaser’s Agent
                                      ‰ Detailed Description of the Horse being sold Name/Color/Markings/Breed/Sire/Dam Sex/Tatoo/Age/Passports/Registry Papers.
                                      ‰ Purchase Price Date of when payment is to be made. Statement of who is responsible for payment. Statement of who is responsible for paying commissions. Statement of who is receiving commissions.
                                      ‰ Transfer of Possession Statement of when and where horse will be delivered.
                                      ‰ Purchase Contingency Veterinary Examination.
                                      Obligation to purchase subject to an inspection and written certification by a licensed veterinarian selected and paid for by the Purchaser. Certification states Purchaser’s satisfaction. State if horse is in good physical condition and fit for the intended purpose or use. List name of veterinarian and timeline for examination /inspection.
                                      Seller’s Representations and Warranties Statement of Horse’s Physical Condition. List any and all known medical conditions, vices, and medical treatments: Veterinary Records and Examination.
                                      Seller provides copies and/or access to Horse’s vaccination records as well as any other records.
                                      If Purchaser fails to timely secure documentation and review records prior to the sale and transfer of Horse, it is at Purchaser’s own peril, and Purchaser waives the right to condition the validity of sale on the basis of non-disclosure of said records. Statement of authority to enter into agreement and execute sale. Seller statement of horse’s behavior. List all known behavior issues.
                                      Transfer of Possession and Registration. Upon Seller’s receipt of the full Purchase Price, Seller promises to deliver possession of the Horse and provide Purchaser with Horse’s registration papers, if any, and documents necessary to transfer registration of the Horse.
                                      Statement of which state the parties have mutually agreed that this Agreement shall be construed in accordance with and governed by Signature of Seller Date of Signature Signature of Purchaser Date of Signature

                                      Bill of Sale Checklist
                                      ‰ Detailed Description of the Horse
                                      ‰ Name
                                      ‰ Color
                                      ‰ Markings
                                      ‰ Breed
                                      ‰ Sire/Dam
                                      ‰ Sex
                                      ‰ Age
                                      ‰ Statement of authority to enter into agreement and execute sale
                                      ‰ As is, where is and with all faults
                                      ‰ Purchaser acknowledges that he/she has conducted inspections as appropriate, including the use of a qualified veterinarian, and is satisfied with the Horse’s condition.
                                      ‰ Acknowledge the Purchaser has had the opportunity to have a pre-purchase examination performed on the Horse by a veterinarian of Purchaser’s selection at Purchaser option and expense.
                                      ‰ Acknowledgment that the execution, delivery, and performance of the Bill of Sale is legal and does not require the additional consent of any person, governmental agency, or any other body of any kind.”
                                      ‰ Acknowledgement of delivery and agreed upon date
                                      ‰ Seller acknowledges that the Horse has been delivered into the possession of Purchaser on or before the date of this Bill of Sale.
                                      ‰ Acknowledgement that the sale is agreed to be final with no warranties, guarantees or other promises.
                                      ‰ Purchaser assumes all risks, responsibilities, and liabilities on the Horse upon execution of this document.
                                      ‰ Consideration, Commission, and Other Remuneration.
                                      ‰ Statement of price and payment agreements
                                      ‰ Purchaser is responsible for payment of a commission to his agent and Seller is responsible for payment of a commission to his agent.
                                      ‰ List names of persons or entities receiving commissions
                                      ‰ Statement of which state the parties have mutually agreed that this Bill of Sale shall be construed in accordance with and governed by
                                      ‰ Signature of Seller and Date
                                      ‰ Seller’s Address
                                      ‰ Signature of Purchaser and Date
                                      ‰ Purchaser’s Address

                                      Comment


                                      • #20
                                        Only in the horseworld are commissions expected and not always earned. The trainer didn't seem to do too much. We don't know how the OP came to try the horse in the barn. Did Op always think Dobbin was a nice horse and interested in trying him once he came up for sale? Or did Trainer suggest it? Trainer was paid for the lessons on the purchase horse and paid for transportation to/from vetting. Did trainer forget to get a commission agreement with the seller so now seller balking so now is dumping commission on OP? If there is no written or expressed agreement of a commission due by OP to trainer I'm not so sure they have to pay.

                                        Since OP is happy there, certainly some sort of compromise should be worked out. Does the barn have some sort of "finder's fee"? which even though the horse was in-barn are new boarders expected to pay this on a horse? I've heard of a trainer or 2 doing this which ultimately ended up in an empty stall for them. Anyhoo, because there was no written or expressed commission agreement, then OP should offer to pay less % commission which would include deducting expenses already paid to the trainer and those expenses due to trainer (like their time at the PPE) and hopefully both parties will reach an amount that is mutually agreeable to them. I don't think the OP should roll over and just pay the commission.

                                        Comment

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