Domain Leasing Contract

[ohassim]

Hi All Domainers

With domain leasing becoming more popular these days and with several domainers receiving more enquires on parked domains that have the leasing option, I think it would a great to share insight on how to go about a lease, all aspects of leasing and clauses that one needs to put into the contract.

Seeing that all domains are not the same, one could share what they would stipulate into a contract for a domain of a certain category and more general clauses that need to be stipulated into all contracts.

With the above being said: let me start...in my opinion...

- every domain is diff, thus needing to be priced differently
- no domain should be priced under WHAT??? p/m (if someone can't pay a min of e.g. $ 50 or $100 p/m to start a business idea that they have, then its probably not a good idea allowing them to utilize the domain)
- there should be a min period e.g. 3 or 6 months (depends domain name)

Please note we are not talking about crappy domain names, hyphenated domains etc.

* ONCE MORE LETS DISCUSS DOMAIN LEASES, CLAUSES , ASK QUESTION AND PROVIDE ANSWERS

 

[biggie]

:talk:

lol

Please note we are not talking about crappy domain names, hyphenated domains etc

more often than not, the names most are trying to lease, fit in above category and are priced waaay above their values as bin's.... let alone what they are asking as monthly lease fee


imo...

 

[kev]

Getting monthly payments off people is very difficult. I tried selling some domains with 12 monthly installments and sometimes it took over 2 and a half years to pay.

But leasing is a win win situation

 

[alien51]

I really don't know why anyone would pay to lease a domain. If you are a legit end-user, why build a customer base on a domain that can be taken away from you and destroy your business?? Doesn't make any business sense, unless you are engaged in a short-lived racket scam and you plan to ditch the domain in the gutter after you get your profits. But then, the domain would have been ruined already.

If it's a "lease-to-own", then it's much better to simply save the money and buy the domain at a later time.

 

[cache]

I really don't know why anyone would pay to lease a domain. If you are a legit end-user, why build a customer base on a domain that can be taken away from you and destroy your business?? Doesn't make any business sense, unless you are engaged in a short-lived racket scam and you plan to ditch the domain in the gutter after you get your profits. But then, the domain would have been ruined already.

If it's a "lease-to-own", then it's much better to simply save the money and buy the domain at a later time.

yes, I had "lease to own" type, the buyer tried, but his venture did not go well the first year, so he did not have the risk of owning the domain.

 

[alien51]

so he did not have the risk of owning the domain.

If the domain is really THAT premium, then there is no risk in owning it. He can sell the domain in the aftermarket.

 

[-NC-]

If the domain is really THAT premium, then there is no risk in owning it. He can sell the domain in the aftermarket.

Except that there will be capital tied up in it. Same reason businesses rent office space, lease computers for staff, don't build their own data centers. They can use the cash to keep the business going during a rough patch. If the cash is tied up, the rough patch causes them to fold.

 

[ohassim]

I really don't know why anyone would pay to lease a domain. If you are a legit end-user, why build a customer base on a domain that can be taken away from you and destroy your business?? Doesn't make any business sense, unless you are engaged in a short-lived racket scam and you plan to ditch the domain in the gutter after you get your profits. But then, the domain would have been ruined already.

If it's a "lease-to-own", then it's much better to simply save the money and buy the domain at a later time.

"lease to own" can be stipulated in the contract, regarding scamers, they will always be around thus the lease has to have appropriate clauses to avoid such situations.

"If you are a legit end-user, why build a customer base on a domain that can be taken away from you and destroy your business??" in the same way the domain owner is worried about the domain, a legit end-user will ensure that the lease has clauses that would avoid the domain being taken away from them.

* if the domain owner (possibly have a lot of domains) is getting his payments regularly I don't see why will he want to snack that domain away, this will give him time to focus on other business ventures or find other legit end-users for his domains.

 

[alien51]

Except that there will be capital tied up in it. Same reason businesses rent office space, lease computers for staff, don't build their own data centers. They can use the cash to keep the business going during a rough patch. If the cash is tied up, the rough patch causes them to fold.

The problem with an internet domain, is that it is a brand... an identity. It is not just a concrete office space where last week the signboard says Walmart, but now the same building says Mom&Pops Grocery Store. It may be the same building, but the identity has changed.

With a domain that is being leased, the brand stays the same, eventhough the entity running the brand is not the same nice guy as before.

Or the reverse can happen. Previous tenant has bad customer service rep. Now people avoid the brand. The brand gets destroyed in internet forums. So what happens now with a new guy who starts leasing the same brand ??

And if you are an End-User guy who is building a good reputation, you are now TIED to your domain name. You cannot move out somewhere else, because your customers identify you with the domain you are leasing. So if you are trying to avoid buying the domain and getting your capital tied up, you could end up leasing the domain forever-- which would cost you more money.

Leasing a domain, is a terrible idea for an End-User.

 

[-NC-]

you could end up leasing the domain forever-- which would cost you more money

Unless it is lease to own.

But anyway, I was responding specifically to your statement that there is no risk in purchasing outright. Running out of cash to pay your bills before the sales start coming in is a risk.

Everything is a risk!

 

[alien51]

I was responding specifically to your statement that there is no risk in purchasing outright.

Sorry about the "no risk" misunderstanding.

What i should have said was "manageable risk".

 

[biggie]

Getting monthly payments off people is very difficult. I tried selling some domains with 12 monthly installments and sometimes it took over 2 and a half years to pay.

But leasing is a win win situation

:talk:

a client couldn't pay bin, so they offered 12yrs @ $100 per month

I really don't know why anyone would pay to lease a domain. If you are a legit end-user, why build a customer base on a domain that can be taken away from you and destroy your business?? Doesn't make any business sense, unless you are engaged in a short-lived racket scam and you plan to ditch the domain in the gutter after you get your profits. But then, the domain would have been ruined already.

If it's a "lease-to-own", then it's much better to simply save the money and buy the domain at a later time.

:talk:

here are a few reasons why someone would want to lease a domain:

the buyer cannot afford to buy at bin price, so seller offers monthly payments over a fixed interval or an open end option.

the domain may not be available at a later time for the buyer to use. so leasing allows them to "possess" the property at lower intial cost, than if purchased at bin.

leasng also allows a buyer to allocate more capital towards other aspects of their plan, that may not have been possible without a lease

leasing provides the seller with a monthly income stream.

the lease contract protects both the leasee, the leasor, and the credibility of the domain name, by details stipulated within the language of the contract, which is agreed to by both parties.

unless you have experience in this area, then you really have no idea of benefits

imo....

 

[alien51]

here are a few reasons why someone would want to lease a domain:

.......


unless you have experience in this area, then you really have no idea of benefits

How leasing works, and its benefits, are common knowledge. That was not the issue.

I was talking about how leasing a brand/identity could backfire on an End-User. Many domainers only see domains as a receptacle, that's why they compare it with an office space.

So unless you have experience in brand positioning and brand protection, then you really have no idea what it means to an End-User.

If you have to pay "lease-to-own", then the sooner you could transfer the domain in your complete control, the better.

 

[Kate]

The problem with an internet domain, is that it is a brand... an identity. It is not just a concrete office space where last week the signboard says Walmart, but now the same building says Mom&Pops Grocery Store. It may be the same building, but the identity has changed.

That's it, leasing a domain name is not the same as renting office space or equipment. Because your domain name is your identity.

A company can move to other premises, even relocate to another country and still retain its identity. But leasing a domain means you are renting your identity/brand from a third party, which is an odd concept really.

I think there is a lot of confusion as to the meaning of leasing.
Lease to own is a form of financing, it means you are buying a domain and paying in installments, but you still have an opt-out clause usually.

In general, leasing domains doesn't make much sense if the aim is not to ultimately own the domain, but exceptions do exist. For example renting a premium/high traffic domain for time-limited campaigns, because you'll never be able to afford purchasing the domain.

That's why there isn't a market for leasing domains really.

 

[ioana_bv]

leasing a domain name is not the same as renting office space or equipment. Because your domain name is your identity.

leasing domains doesn't make sense

That is all I have to say about leasing a domain name

 

[alien51]

but exceptions do exist. For example renting a premium/high traffic domain for time-limited campaigns, because you'll never be able to afford purchasing the domain.

That exception is also problematic. That would be a terrible idea for the Domainer who owns the premium domain.

You have insufficient control on how your domain's traffic is getting abused by the short-term domain tenant. Why would anyone risk destroying his domain brand forever, just for short-term cheap financial gain from some monthly-paying stranger?

And remember, internet litigation is a wild goose chase. It's not like you're trying to sue that sofa guy who lives down the block.

One wrong act by your domain tenant, and your precious high-premium domain can get blacklisted from search engines, not to mention getting listed in various Spamhaus offenders list. Adsense accounts might not even work on a blacklisted domain, so that's bad news for the next guy who is clueless that the domain was already raped by the previous user.

It is important to note also, that not all bad reputation can be sued for civil damages. For example, poor customer service, rude phone calls, these are highly disputable acts. They could ruin your domain brand, and yet you might not be able to sue the guy. You end up as the loser.

Oh, and i've read many times here at Namepros that Escrow arrangements for domain leasing, is either non-existent or such a pain in the ass.

 

[biggie]

How leasing works, and its benefits, are common knowledge. .

if it were so common, threads like this would never be created

 

[alien51]

This thread was never about "I do not know what is leasing". You can Google or Wikipedia that stuff.

It is about whether it makes sense to apply the concept of leasing on internet domains, and whether the "so-called benefits of leasing" actually works on domains.