Now that the federal government has gone through its second round of domain seizures, the 1st being in June of this year, the question becomes can domain holders lease or finance the purchase of domains anymore?
Over the years we have leased domains, some with an option to purchase and others through a straight lease.
Of course we have a written lease agreement we use that attempts to protect us and our domain.
The agreement provides that the site won’t be used for anything illegal, will comply with all state and federal laws and prohibit spamming and phishing.
In the even of a breach buy a lessee or a buyer under a finance agreements remedies are spelled out including moving the domain back to our servers.
Frankly the seizure of domains were not anticipated.
But the ball game has changed and domainers must adapt.
So the question must be asked can domainers still lease a domain or finance a domain, taking the added risk of domain seizure?
Up to now its been fairly easy to police lease and financed domains.
If someone is spamming you as the admin contact would get the complaint and/or notice and take the domain down.
If someone was serving up child porn on your domain you would see it and take the site back.
But in the world of domain seizures based on the sale of counterfeit or possibly simply unlicensed goods it going to be practically impossible to police the content of the site.
Beyond governmental action there is now this group RightHaven.com which has filed suit against at least 177 sites using copyrighted material in which as part of the lawsuit they seek the forfeiture of the domain name.
So if your leasing or financing the sale of a domain, not only do you as the domain holder have to worry about clear illegal use of the domain, using the domain for spamming, or phishing, but now you have to be concerned on making sure every product sold on the domain is properly licensed, and that none of the content on site infringes on anyone’s copyright.
Based on all of the above, domainers may not have the option of leasing or financing domains any longer
At the very least agreements are going to have to be carefully and thoroughly drafted. You are going to have to have an agreed on valuation (in case of a straight lease) in the even the domain gets seized
As a domain owner you may practically be restricted to only dealing with companies that are US based, or at least in a jurisdiction where you would have access to a legal system to enforce your rights under the agreement
You may have to assure yourself that the company your dealing with has the funds, to pay the value of the domain, plus your legal fees you’re going to incur to try to get the domain back.
That’s a lot of risk on the domain holders side that simply didn’t exist a year ago.
The added risk of seizure by both the government and RightHaven might have made leasing or financing a domain impractical.