Between the shut-down of horse slaughter facilities, the downturn in the economy, and the increase in agricultural expenses, the number of abandoned horses has been on the rise. As a business owner, many boarding barn owners have been trapped with these unwanted and abandoned horses. What boarding barn owners need to know is that Illinois does provide protection in the form of the Innkeepers Lien Act – Stable keepers and Agisters.
There are two sections of the Innkeepers Lien Act that deal with horses:
770 ILCS 40/49: Stable keepers shall have a lien upon the horses, carriages, harness, tack and equipment, and any other personal property stored by the owner at the stable or boarding facility in the amount of the proper charges due for the keeping thereof and expenses bestowed thereon at the request of the owner, or the person having the possession thereof.
770 ILCS 40/50: Agisters and persons keeping, yarding, feeding or pasturing domestic animals, shall have a lien upon the animals agistered, kept, yarded or fed, for the proper charges due for the agisting, keeping, yarding or feeding thereof.
Typically Section 49 applies more to horse boarding businesses (i.e., the typical barn that boards horses). Section 50 is more often used for farm animals, including horses on pasture board or working ranch horses. Albeit two distinct applications, it is highly recommended that any boarding agreements or contracts reference both Section 49 and Section 50.
Formalizing the Stable Keepers Lien
The Stable keepers lien provided in Section 49 is a possessory lien. In other words, the stable keeper …
A “stable keeper” is defined as the owner, operator, lessor, or sublessor of a stable or horse boarding facility, or his, her, or its agent, or any other person or entity authorized by him, or her, or it to manage the horse boarding facility or to receive rent from a horse owner under a boarding or stabling agreement. 770 ILCS 40/49(a).
… can restrict the movement of the horse from the facility, except for emergency veterinary care. 770 ILCS 40/49(c). It is critical for stable keepers to have horse owners execute a complete and detailed board agreement, including provisions that acknowledge and recognize the stable keeper’s right to a lien under the Innkeepers Lien Act.
The enforcement of the lien must be through public sale unless the written boarding agreement specifically authorizes that the stable keeper may sell the horse and personal property through private sale or that the stable keeper may take ownership of the horse and personal property.
The lien attaches as of the date the horse is brought to the stable; and, the lien shall be superior to any other lien or security interest except for a statutory lien or security interest which is perfected through a proper filing under Article 9 of the Commercial Code prior to the beginning of the boarding. 770 ILCS 40/49(i).
Should a horse owner fall behind in payments, the stable keeper must give the owner 30 days written notice to make payment in full. If payment in full is not received within that 30 days, then the horse and any personal property left on the premises may be sold. 770 ILCS 40/49(e). Although the Act does not specifically require the actual filing of a lien with the county recorder, it is a highly recommended and prudent step to take to verify and confirm the possessory lien on the horse and personal property. The lien should be filed in the county in which the horse and personal property is located. In furtherance thereof, a notice of lien should be posted on the horse’s stall identifying that the lien has been filed and the horse is being held pursuant to the Innkeepers Lien Act. The stable keeper must not allow anyone to remove the horse from the property. It is crucial that the stable keeper retains possession.
If enforcement of the lien is to occur through public sale, the sale shall be conducted by the local sheriff or other authorized individual. The horse and property shall be sold to the highest bidder. The date, time and place of the sale shall be advertised by written notice of the sale: (1) being posted at 3 of the most public places in the township or municipality where the horse is boarded (or if not in a township or municipality, at 3 of the most public places in the county) at least 21 days before the sale; or (2) being advertised by placing a sale notice for 3 consecutive weeks in a weekly or daily newspaper of general circulation distributed in the township or municipality where the horse is boarded. The Notice of Sale shall include the lien amount and, if applicable, a minimum bid.
A minimum bid restriction is sometimes highly recommended to prevent “kill buyers” from taking possession.
Upon completion of the sale and payment of the purchase price, a public sale certificate of purchase of the horse to the highest bidder shall be provided to show the highest bidder is the new legal owner of the horse.
If the stable keeper has recorded a lien with the county recorder, a release of said lien must be filed to give the highest bidder clear title to the horse.
At the time of delivery of this certificate, the original horse owner shall have no claim of right, title, or interest in the horse. The stable keeper is entitled to recoup the balance for any unpaid invoices, all fees (including attorney’s fees), and all costs (including the auctioneer or sheriff fees and advertising costs). If any surplus funds exist, they shall be paid to the horse owner. If the horse owner receives the surplus funds, the horse owner has 7 days thereafter to forward any ownership papers in the horse to the sale buyer. If the horse owner (after reasonable attempts) cannot be located, then any surplus funds shall be paid to the stable keeper’s chosen equine rescue, rehabilitation, or retirement facility or organization. 770 ILCS 40/49(f).
If the board agreement specifically provides for private sale, the procedure is less complicated. To satisfy the requirement of written notice, notice of the sale must be sent at least 3 weeks prior to the date of the private sale to the horse owner’s last known mailing address by first class certified or registered mail or by email or facsimile. At the time of the private sale, the stable keeper shall, upon payment of the sale price, provide a private sale certificate for the horse to the buyer certifying that the requirements were met and that the buyer is the legal owner of the horse. At the time of delivery of the private sale certificate, the original horse owner has no claim of right, title, or interest in the horse. The application of proceeds is consistent with that outlined for public sales. 770 ILCS 40/49(g).
If the board agreement specifically provides that the stable keeper obtains ownership of the horse and any personal property, the stable keeper shall provide a 30 day demand for payment. Said demand shall include an appraisal of the value of the horse and the personal property left on the premises showing that the value of the horse and the personal property on the premises is at least equal to the amount due and owing to the stable keeper.
The best option in the current economic climate (where good horses are often being given away) is to let the horse go for a reasonable amount. It most often is not a good business decision to keep the horse. In a perfect world, the horse and personal property would sell for enough to cover the past due board, as well as the expenses in perfecting the lien and sale. The question then arises, what happens if the sale comes up short and there is still a balance due? In most instances the best remaining course of action is for the boarding barn to file a small claims action against the horse owner for the amount still owed.
Remember though that in Illinois a business cannot be a pro se plaintiff in a small claims action. Ill. Sup. Ct. R. 282.
The main points to take away from this article are
- the importance of including the language of the Innkeepers Lien Act in boarding agreements,
- to not let any boarder get too far behind in paying their board, and
- to be very proactive in protecting the rights afforded under the Act. It is critical to protect yourself as best as you can so that you are not the one left with horses that you cannot afford to keep.
Want to know more about Equine Law, contact Jody Booher today.