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What You Need to Know about New Horse Sale Law

Dual agency and bill of sale requirement in California

Pacific Coast Journal
July 2012

Would you buy a home if your real estate agent was representing both you and the seller? Some might consider it a conflict of interest.

Moreover, what if your real estate agent negotiated a home price of $450,000 with the seller, but told you the home would cost $500,000, pocketing the $50,000 as commission without you knowing it?

It’s been illegal for many years for a real estate agent to represent both buyer and seller without both parties being completely in-the-know. Real estate law also requires a fairly high level of transparency when it comes to agent commissions.

This has not been the case when it comes to horse sales in California – until recently.

Equine attorney and civil litigation lawyer in California

Understanding the basics of the new California Business & Professions Code 19525 can help ensure a smoother horse purchase or sale, and help you better understand how to use an equine law firm or California civil litigation attorney.

The new code, which became law in January 2011, changes three main elements of a horse sale in California. All point toward the use of a California law firm equine attorney.

Equine law firm – three main things to take away from the new law:

1. It requires a written bill of sale for virtually all horse sales

This means no more handshake deals, all deals must be in writing. An equine law firm should be contacted. An equine attorney can help ensure all paperwork is in proper order and according to law.

2. It spells out that dual agency – the representing of both buyer and seller – must be transparent through the written acknowledgement of both parties.

Simply put, dual agency is illegal unless everyone involved has okayed it – in writing.

Many in the industry depend heavily on their trainers for a litany of guidance from diet and exercise to health care and grooming. Because of this, some trust trainers to handle – at times exclusively – horse sale negotiations for them. While there is nothing wrong with this practice, this new law orders the agent to be completely clear when it comes to whom they are representing.

3. It mandates all third party commissions of more than $500 be disclosed to both parties.

It has been common practice in the industry for a third party – such as a trainer or agent –to act as representation for both the buyer and seller throughout a horse sale. It has also been somewhat common for that third party to be paid an undisclosed commission, which is oftentimes buried within the buyer’s cost.

This new law changes all this. The law states retribution can be taken in legal form if a third party fails to tell buyer and seller it is representing them both, or if they are collecting more than $500 in commission without explicit knowledge of both parties. The offense is a civil, not criminal, so contacting a California civil litigation lawyer would be an important first step.

Equine law firm – new law involving horse purchase

Failure to comply with the new law means offending parties can be sued for “treble” damages of up to three times the amount in question. It is important to note the new code section does not allow for recovery of fees related to an equine attorney. This means an equine attorney should be consulted to help evaluate whether a suit is cost-effective and worth your time.