Domain Lease Agreement

Lease agreementToday I am going to outline the main parts to consider in a domain lease agreement, this is not intended as legal advice, if you were to lease a domain you should get a professional opinion, if you want to buy an example lease agreement please go here. Furthermore the lease agreement I have used is aimed at UK domains so if it were another extension you would have to replace Nominet and their domain dispute resolution service with the equivalent.

Frontpage
Full name and address for the ‘lessor’ who owns the domain and the ‘lessee’ who wishes to lease the domain.

Subject of the matter
Detail the name of the domain

Term
Detail the length of the lease usually in months stating when it would commence and expire.

Rental
Detail the amount of the monthly payments and cover whether that would include VAT, the fact that payment is due one month in advance and the day each calendar month the payment should be made. Also note that if a payment is missed or not completed without prior consent the lessee is deemed as giving notice to cancel the lease.

Buy Out
In some cases an option to buy can be included in a lease agreement so detail any buyout option, the value and when it comes into effect and expires.

Use of the domain
If the domain is lost from ownership of the lessor due to legal, Nominet DRS or similar action during the term you could state the extent to which the lessee would be liable, for example 50% of the remaining rent due.

State that by leasing the domain the lessee agrees they are aware and understand the Nominet terms and conditions and Nominet Dispute Resolution Policy and that they will not infringe on any third party rights by use of the domain. On leasing the domain the lessee agree that they will not act abusively with their use of the domain name as defined by Nominet DRS policy.

Also good point to state that the lessor confirms they are not aware at the commencement of the agreement of any reason for the domain name to be revoked.

Extension
On completion of the lease you could offer a renewal at a set price, for example the lessor agrees to offer the lessee an extension of a further 12 months at the end of the lease at the existing monthly price, you would have to state the window of opportunity for this, for example it would have to be taken in the last 3 months of the lease.

Termination
The lease may be terminated by the lessor by giving 6 months notice.
The lease may be terminated by the lessee by giving 6 months notice.
If the agreement is terminated full rights and control of the domain including any residual benefits such as traffic and search engine rankings will revert to the lessor. On termination the lessee forfeits all claims, rights and benefits involving the domain.

Confidentiality
Both parties can agree for the terms and conditions of the lease be kept private.

Further
At all times during the term of this agreement the domain name will be owned by the lessor and operated by the registrar of of choice of the lessor, the agreement is not construed to be creating a partnership or joint venture.

I think that covers the main parts, I’d love to mention 2 domain purchases that are in the throws just now, one for £400 and one for £3525 but until the paperwork is complete I best keep them under wraps, the one for £3k + VAT is a biggie though and I think may suprise a few people 😉

About Scott Jones

Scott hails from the north east of Scotland and started earning online at the end of 2000 building websites for local businesses during which time he won an award from Lord Alan Sugar for Excellence in Enterprise. After having quite a bit of success with domaining Scott mainly runs educational evergreen websites which generate over 3 million visitors per month but is always on the lookout for a fresh thinking out of the box way to turn a buck. Follow on Twitter.

Comments

  1. After reading this I wondered ‘has scott bought domainleasing.co.uk?’

    Just parked it seems 😛

  2. Do you use the same form for all of your leased domains? Did a lawyer draw up your agreement?

  3. What about adding dispute resolution clause? Not sure what its like in the UK these days, but here in the US, juridiction tends to be located where a contract is signed, unless otherwise stated. If your lessee signs the contract at their location, it would mean that you might have to travel somewhere in order to file papers and get them into court during a dispute. Much better to have a clause that specifies where disputes will be resolved – i.e. somewhere close to your home office. Not sure what the legaleeze for this is, but I did get dinged by it several years ago when filing a claim against a client who wouldn’t pay up.

    • That’s a good point Nigel, in my lease it does mention the law to which the contract applies and I woudl be using mine B2B in the UK.

  4. I would love to be able to lease some of my domain names. The problem is you could work hard to get a domain name to the top of the search engines and then the person renting could add a new site that is not seo friendly which will lower the value on the domain name.

    • As long as they are signed up to a lease for a couple of years why would that be a problem Mally, ultimately I would only ever look to do it on a generic so only ranking it for it’s name which is much easier to do than take on an huge seo task, so as long as it wasn’t a one word extremely competitive generic term it should be pretty achievable to rank the domain for it’s name and low risk with high reward.

  5. Can you tell us which domain name your renting out for £500 a month?

  6. Scott, can you please post how you actively find clients for your domains and what you say in your e-mails to them?

    Also, how do you value how much a domain is worth per month? You recently spoke about Fuel Cell Boilers, what if you owned a domain relating to that, once it was ranked in the SERPs how would you value it because it is a new technology?

    Finally, with regards to SEO, don’t domain ranks automatically drop when you change the content of the site completely? So you have a landing page for “BedroomFurniture.com” that sites 1st in Google then its leased and the lessee has a crap site with no SEO…how do you ensure your domain doesn’t lose its position because the lessee isn’t actually doing anything wrong?

    I look forward to reading your reply mate,

    Khalid.

  7. Wow, first time I ever heard about domain leasing. Is there actually a market for this?

    James’s last blog post..Should you have your keyword in the domain name?

    • There is but it’s seems very young so you have to work harder on the selling side, they don’t fly off the shelf but I’m confident of growing that side of my business.

  8. Do many people really lease domains? I expect there is a market, but I’d not want to put a lot of effort into a site if I didn’t own the domain itself. Still, good on you if you’re managing to make it work. I expect a lot comes down to trust and good legal contracts!

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