Lease to Buy Contract.

[Name Trader]

I've had an offer for one of my domains for a lease to buy contract, where they are claiming to be a poor startup company with little funds. They basically agreed my price but want a lease to buy contract to defer expenses. After some negotiation they are offering 0.8% per month for 24 months and a 55% buyout payment. I was asking for a 2.85% per month with a 30% buyout payment. I would guess these are close to our final positions. Personally, I don't feel confident about such a low monthly payment.

I know that every contract is different, but is there any kind of acceptable average for such contracts?

Could someone post a link to a sample contract I could use?

Any other comments or tips are welcome.

 

[mhdoc]

" I don't feel confident about such a low monthly payment." I don't understand what you mean by confident. Its not like they will damage your collateral.

As a startup they will most likely fail and you will get your domain back. Would you be happy if that happens?

 

[bmugford]

I don't understand the math on this one.

You are saying they are offering 0.8% of your asking price per month, over 24 months? That is a total of 19.2% of your asking price, then they are offering a lump sum of 55%? That is still only 74.2% total.

Brad

 

[johname]

clickleasing has a domain leasing contract that a good start to getting you in the right frame of mind


http://www.clickleasing.com/site_map.php

 

[.NJ]

Whats with the 2.85% and the 0.8%????

Make it simple............

What they can afford right now would be their down payment.

Then break the rest of the payments into a 24, 36, or 48 month financing contract.

Tack on a 5% APR charge into the payment structure and be done with it.

Don't neg different payment options with them. You set the structure you want, and they have to use it.

Remember, your in control........not them.

 

[Name Trader]

I don't understand the math on this one.

You are saying they are offering 0.8% of your asking price per month, over 24 months? That is a total of 19.2% of your asking price, then they are offering a lump sum of 55%? That is still only 74.2% total.

Brad

Oops! I was working off of 2 different sets of numbers. The correct figures are they are offering 1.1% per month and 74% (approx) as the purchase price.

My total price and their total price are not the same.

---------- Post added at 08:57 AM ---------- Previous post was at 08:39 AM ----------

" I don't feel confident about such a low monthly payment." I don't understand what you mean by confident. Its not like they will damage your collateral.

As a startup they will most likely fail and you will get your domain back. Would you be happy if that happens?

What I mean by confident, is I don't see this purchase ever reaching it's conclusion with such low investment in the front-end. So I get 1 or 2 measly 1.1% payments and that's it? Sure it's money in my pocket, but what I want is a sale of my domain, not a couple of months rent. So I wouldn't be so happy if that happened.

---------- Post added at 09:10 AM ---------- Previous post was at 08:57 AM ----------

Whats with the 2.85% and the 0.8%????

Make it simple............

What they can afford right now would be their down payment.

Then break the rest of the payments into a 24, 36, or 48 month financing contract.

Tack on a 5% APR charge into the payment structure and be done with it.

Don't neg different payment options with them. You set the structure you want, and they have to use it.

Remember, your in control........not them.

The problem is they are a poor startup. They don't have any funds to pay anything up-front (or for the monthly rental also, apparently). The reason for the percentages are to hide the real prices.

---------- Post added at 09:14 AM ---------- Previous post was at 09:10 AM ----------

clickleasing has a domain leasing contract that a good start to getting you in the right frame of mind


http://www.clickleasing.com/site_map.php

Thanks John. I downloaded it.

 

[bmugford]

Oops! I was working off of 2 different sets of numbers. The correct figures are they are offering 1.1% per month and 74% (approx) as the purchase price.

I don't think that is putting enough skin in the game for the buyer.

They can use the domain for (2) years for 25% of the total price then just walk away if they want.

During that time you will not be able to sell the domain, and depending what they do with the name you might have a domain that has a history of a failed business on it.

Brad

 

[south]

Agree on a price (sounds like you have already done this).

Then let them make payments:

https://escrow.com/services/domain-name-holding-escrow.aspx

 

[johname]

Then let them make payments:

https://escrow.com/services/domain-name-holding-escrow.aspx

"The fee for this service is our standard escrow fee, 0.89%, plus a domain holding fee of $500.00 for each year or portion of a year we hold the domain."

They will be spending $1000+ 0.89% to do it this way in addition to the money that goes to stub. The buyers sounds super upfront cheap. So if the $1000 a large percentage of the domain cost, I would suspect the buyer wouldn't go for this method.

But still a nice addition to the thread, Thanks.

 

[DU]

Be wary of just copying other lease agreements because the laws, even if not strong on domain leasing, will vary by state and locale.

Be clear in defining the jurisdiction in which the contract applies (i.e. make it somewhere where you can respond and act appropriately). If the amounts are "claims court" numbers you don't want them to be in another part of the country (or country).

Consider all things and then check that they are covered... for example:

Early termination (either buy out or get out)
Defaulting on a Payment (you can't just shut them off)
Agreement on what is hosted (liability,, see next point)
Who would be defending the name in UDRP/DMCA or ACPA? Responsible for compliance?
Sub leasing

This one covers a lot of that including jurisdiction (not saying it's good or without issues but at least has significant coverage and gives you an idea of the complications involved in leasing):

http://www.timespublishing.com/domain_and_website_lease_terms_of_service.html

I would add additional $ to cover the additional legal considerations that might come up rather than amortizing to the fixed predetermined cost (it looks like you've done that with yours a little).

IANAL

 

[Name Trader]

I don't think that is putting enough skin in the game for the buyer.

They can use the domain for (2) years for 25% of the total price then just walk away if they want.

During that time you will not be able to sell the domain, and depending what they do with the name you might have a domain that has a history of a failed business on it.

Brad

Thanks Brad. These were my thoughts too.

---------- Post added at 01:17 PM ---------- Previous post was at 01:13 PM ----------

Agree on a price (sounds like you have already done this).

Then let them make payments:

https://escrow.com/services/domain-name-holding-escrow.aspx

Thanks south. I wasn't aware of this service. But it's starts at $75,000. More than my domain is worth.

---------- Post added at 01:25 PM ---------- Previous post was at 01:17 PM ----------

Be wary of just copying other lease agreements because the laws, even if not strong on domain leasing, will vary by state and locale.

Be clear in defining the jurisdiction in which the contract applies (i.e. make it somewhere where you can respond and act appropriately). If the amounts are "claims court" numbers you don't want them to be in another part of the country (or country).

Consider all things and then check that they are covered... for example:

Early termination (either buy out or get out)
Defaulting on a Payment (you can't just shut them off)
Agreement on what is hosted (liability,, see next point)
Who would be defending the name in UDRP/DMCA or ACPA? Responsible for compliance?
Sub leasing

This one covers a lot of that including jurisdiction (not saying it's good or without issues but at least has significant coverage and gives you an idea of the complications involved in leasing):

http://www.timespublishing.com/domain_and_website_lease_terms_of_service.html

I would add additional $ to cover the additional legal considerations that might come up rather than amortizing to the fixed predetermined cost (it looks like you've done that with yours a little).

IANAL

Thanks DU. For highlighting somethings to watch out for. I've downloaded the contract. Give me something to play with over xmas

 

[Name Trader]

OK. I stuck by my last offer of 2.85% for 24 months and 30% buyout, nothing up front, even though I wasn't 100% happy with my offer. The buyer said it wouldn't work for them. Deal folded. I've got mixed feelings. I would have liked to sell the domain (preferrably outright), but as Brad said, and I'd been thinking, it was just too easy with the low payments for them to pull out without too much pain on their side, and an unknown amount of pain on my side.

 

[Spade]

Stub,

That was my thought as well. They have a quality domain name they can build on with low risk. If their business concept doesn't take off, they simply walk away, leaving you with whatever crap history they created. Also, who the hell wants to be responsible for collecting a small % every month?... not enough to make it worth it for me...

 

[alistair80]

Cyger actually had an interview with Nokta domains on this a couple week ago. Check it out!

 

[Name Trader]

link please?

 

[alistair80]

http://www.domainsherpa.com/merve-engine-domainleasing-interview/

 

[Name Trader]

Very informative. Thank you.