Showcasemanager.com Leasing discussions - Just Discussion Phase!

[Adam Dicker]

Here's what I was thinking, just throwing this out for discussions.

Lete's assume you have a name you want to sell for $10,000.

Leasing options could be.

1 Year Lease Option:

We could have a first year lease for 5% or $500 / month with a buyout option at the end of the lease being $8,000 - Total Revenue $6,000 plus $8,000 = $14,000

2 Year Lease Option:

We could have a first year lease for 5% or $500 / month with a buyout option at the end of the lease being $8,000 - Total Revenue $6,000 plus $8,000 = $14,000
We could have a second year lease for 5% or $500 / month with a buyout option at the end of the lease being $6,000 - Total Revenue $12,000 plus $6,000 = $18,000

3 Year Lease Option:

We could have a first year lease for 5% or $500 / month with a buyout option at the end of the lease being $8,000 - Total Revenue $6,000 plus $8,000 = $14,000
We could have a second year lease for 5% or $500 / month with a buyout option at the end of the lease being $6,000 - Total Revenue $12,000 plus $6,000 = $18,000
We could have a third year lease for 5% or $500 / month with a buyout option at the end of the lease being $4,000 - Total Revenue $18,000 plus $4,000 = $22,000


I am open to better plans....
-=DCG=-

[britishbulldog]

Maybe you should focus on domain leasing as it's the best idea with no dedicated marketplace for it and you would become the world's market leader with no or little competition,being "niche" is the way to go imho...

[Gerry]

You are going to have to hire a lawyer to prepare all the drafts of contracts.

You will then need to have an attorney on retainer to enforce the contracts.

As for payment options, is this 500 renewable per month? What if they miss a payment?

Meanwhile you have a domain that is tied up in a less agreement, breach of contract pending, no revenue on a domain that someone else may be interested in leasing - but you can't lease it while it is being contested.

I am playing devil's advocate here which is what you need when planning such an activity. Look at it this way...

Person A agrees to lease a name. Person A pays for a couple of month's and stops paying.
Meanwhile, Person B is interested in leasing the name as well.
Meanwhile, your attorney has sent breach of contract notices to Person A and payment demands that Person A is in arears.
At what point do you now authorize a lease to Person B?
If you say 90 days, and you now lease the name to Person B but suddenly Person A pays his debt.

These are very explicit terms that need to be spelled out.
In addition, the lease agreement needs to stipulate any payment made while leasing is NON-Refundable should the leasee default on payment.
In other words, Person A has paid 10 months ($5,000) and is two months short of fulfilling the obligation but files litigation against you to recover the money paid toward purchase.

You really need to explore all sides of this issue with a legal expert in contractual law.

[Adam Dicker]

Zak Muscovitch will be doing all the legal agreements for this.

If they default they lose whatever payments they have paid and have no right to the domains just like any other lease.

-=DCG=-

[GeoOwners]

I'd try it...and agree no/low competition would help you and the customers.

[jaydub]

I have posted this before but I guess it can't hurt again as it is relative to the thread.

When a name is leased it usually stays in your name.
If the person that leases it uses it inappropriately or creates spam emails with it then it is you that gets the repercussions initially as it is your contact info that is in the whois.

I am sure that you could show it wasn't you that did it by providing your lease agreement but I don't know if that would release you from any legal culpability. And there would be costs and time involved just to prove it wasn't you.

So I guess this is just to say to beware of some of the possible pitfalls that can arise from leasing/renting a domain name.

Maybe Zak could see if there is a remedy for this possibly in something written into an agreement.

Just some food for thought

[Adam Dicker]

Yes, Zak will make sure their are liability clauses in the lease agreement.

ADam

[Gerry]

Zak Muscovitch will be doing all the legal agreements for this.

If they default they lose whatever payments they have paid and have no right to the domains just like any other lease.

-=DCG=-

Well, then you don't need me and my opinions...

[jaydub]

Well, then you don't need me and my opinions...

[Bill Roy]

Adam I think you already know I am in favour of leasing, however, as has already been pointed out in posts above the legal issues need to be checked through first.

Of course the thing about leasing is that both parties of the projected lease have the right to decline entering into any such lease, just as with a bricks and mortar company, just because an owner puts a domain up for lease does not mean he HAS TO enter into a lease with someone. It will be a case of due dilegence prior to entering the lease in the case for both parties concerned.

Perhaps on the 3 year lease it may be possible to shake the figures a little, 1st year at 4%, 2nd year at 5%, 3rd year at 6%, this is to possibly encourage the investment in time and money presumably invested in the first year by the leasee in developing the site. (The figures are only based on those given by you Adam in the OP, these could of course be varied.)

It may also be an idea for some variation in purchase cost to be taken into account. I would suggest that this, as with the percentage lease fee, should be somewhat liquid depending on the prospective leasee, just as in all businesses this is to reflect the perceived level of risk undertaken by the owner.

This is a sensible route for many companies to obtain and/or increase their presence on the internet, especially start-ups, and in general I fully welcome and support it.

[domaingeneration]

Leasing is a good way to go, if you can make it work with the marketplace.
We don't have to keep selling off domains. Not sure how successful
others have done leasing (leasethis.com?). Clearly there's no leader yet in
this niche.

DG
http://www.NicheResearch.com/whatittakes

[WeBuyThe.Com]

Adam, I think leasing is a high risk proposition. What happens if the party that is leasing the name does something that results in an ICE or UDRP or TM issue? If I have a name that is worth 100K and all of a sudden there is a lawsuit and the name is lost who is going to assure me that I will receive the remaining payments? What about liability when the lawsuit names all parties including owner/marketplace. I'd have two lawyers review this and be sure all points are covered. We've completed a few successful leases.

[Adam Dicker]

This is for the lawyers to work out, and obviously just becauyse you lease out a name, you shouldn't ignore it.

Making sure proper use of the domain will be in the lease agreement.

-=DCG=-

[Dynamic1]

This is for the lawyers to work out, and obviously just becauyse you lease out a name, you shouldn't ignore it.

Making sure proper use of the domain will be in the lease agreement.

-=DCG=-

Adam sounds like alot of work to me but it may be worth it.
My question is do you want to incorporate this as a part of ShowcaseManager or as a seperate entity?

[emaillance01]

Hello all. I am trying to find out a how or the formula used to determine the fair market value of leasing a domain name. If the formula is per 1000 monthly visits times $X that would be ok but need something a little more than arbirarily saying im leasing this site for $X,XXX and no way to gauge. Does anybody have the formula or tool to best gauge and if not how do you decide whats fair if you do lease?
Thanks in advance-Lance

[biggedon]

Hello all. I am trying to find out a how or the formula used to determine the fair market value of leasing a domain name. If the formula is per 1000 monthly visits times $X that would be ok but need something a little more than arbirarily saying im leasing this site for $X,XXX and no way to gauge. Does anybody have the formula or tool to best gauge and if not how do you decide whats fair if you do lease?
Thanks in advance-Lance

there is no "fair market value of leasing" per se', there is only the selling price which the buyer cannot afford to make at one time, so the payments are spread over an interval. with either a buyout option/clause or the lease is structured as "lease or rent to own".


the market value or not, is the asking price for the domain, which is set by the seller, based on varying criteria.



i received first payment last week for a "lto" 3 yr. agreement

[fatter]

I would go a different route, than your proposed leasing avenue, while your plan would work for a few elite names the logistics makes it a nightmare. I would just have domainers who are sick and tired of being ripped by google and yahoo, to change dns to a landing page that offers to have all traffic redirected for a month for a set fee with marketplace getting a percentage of the monthly payout, and the domainer getting the rest, other features could be added later but I beleive more and more endusers would use it just for the increased traffic,especially if it is instantanous, then they could base offers on results. It would be relatively easy to have traffic forwarded to purchasers site. A system similar to the old traffic avenue site. While i sold most of my higher traffic names I think there is a niche not being filled right now for most domainers portfolios since parking fell through. terms could be renewed each month the competitive logistics would have to be ironed out by those smarter than me like how to get higher bids for a months tarffic etc
Just my 2 cents
Joe t

[Adam Dicker]

Here's what I found out through a Canadian lawyer...

No laws against leasing or assisting with leasing, domains, in canada...

At least for gtld's....with .ca's for example, leasing is prohibited...because you cannot allow a third party to use the domain which is registered to you.

So leasing is out for .ca's but good for others like .com

-=DCG=-

[emaillance01]

Thank you regarding response. I figured that there is no real formula but that is to say that no one has really come up with a formula as of yet. Nearly everything does to where it could then be justified. I consider if realestate (offline) has value based on specifics elements i.e. good neighborhood schools access roads close to trnasportation it can be defined in that area as a lease rate to market value which can be justified. I hope that I can find some domainer who can put together metrics that can relate to a justifiable formula. Even at $100 I may be undercutting someone (me or them) but so far the only question has been "how much traffic is the site getting?"

---------- Post added at 07:30 PM ---------- Previous post was at 07:28 PM ----------

there is no "fair market value of leasing" per se', there is only the selling price which the buyer cannot afford to make at one time, so the payments are spread over an interval. with either a buyout option/clause or the lease is structured as "lease or rent to own".


the market value or not, is the asking price for the domain, which is set by the seller, based on varying criteria.



i received first payment last week for a "lto" 3 yr. agreement

I think this would be true if it were lease option (lease with option to buy or financing) I am simply trying to see if there is a formula and if not why it hasnt been thought of yet.

[WeBuyThe.Com]

Here's what I found out through a Canadian lawyer...

with .ca's for example, leasing is prohibited...because you cannot allow a third party to use the domain which is registered to you.
So leasing is out for .ca's but good for others like .com

-=DCG=-

I am sure a good lawyer could get around this simply by stating you are in a multi-year partnership with a buy out clause. The lawyers would make it sound much better. Certainly there is nothing banning you from being a silent partner in a venture.