Domain Name Leasing FAQs

Why Lease-to-Own a Domain?

Benefit for Lessees

  • Minimal up-front capital commitment
  • Ability to test concept
  • Preserves exclusive optionality to buy

Benefit for Domain Owners

  • Control over lease terms
  • Generate incremental cash flow
  • Incentivize lessee to purchase in future

How it Works

Initial State

Domain owner/broker Owen lists domain, domain.com, on 36names for free

Arrow Down

Potential lessee/broker Leslie contacts Owen for free; expresses interest in domain.com

Arrow Right Arrow Down

Owen and Leslie exchange information and negotiate outside of 36names platform

Arrow Down
They agree to terms and sign contract on 36names. Contract contains purchase option at set price
Arrow Left Arrow Down

Through 36names...

Owen grants control of domain.com to Leslie, and

Leslie transfers first payment to Owen

Arrow Left Arrow Down

36names assigns Leslie authority to select DNS host but retains ownership of domain.com

Arrow Right Arrow Down

Leslie selects DNS host and develops domain.com outside of 36names

Steady State

Leslie pays monthly lease to Owen through 36names

75% of payment accrues as deduction to contractual purchase price – depending on terms negotiated

Example: Leslie leases a $50,000 domain for $500/month. 20 months later, Leslie decides to exercise his purchase option. The purchase price would be $42,500 ($50,000 - (75% * 20 * $500))

Future

Scenario One:

Domain does well

Leslie pays 36names the predetermined price stipulated in the original lease contract

Through 36names

36names transfers Leslie's purchase payment, net of commissions, to Owen

AND

36names transfers full ownership of domain.com to Leslie

Scenario Two:

Domain does not do well

Leslie stops making monthly payments

Through 36names

After a grace period, 36names transfers full ownership of domain.com back to Owen

AND

Owen keeps all payments received to-date

FAQs

What commissions does 36names charge?

We charge a 13.6% commission on all lease payments and purchase payments. This includes any payment gateway (Paypal) fees. The commission is charged to the seller based on the listed price.

Are listings on 36names exclusive or do they require any type of commitment?

No! 36names allows you to list your domain anywhere else. Listing on 36names is free and does not compel any commitment to transact on 36names.

As a domain owner, what if I do not want to give up control of the domain during the lease period?

As long as the other party agrees, we can work out an arrangement that protects both sides. Please contact legal [at] 36names.com for more information.

I am a domain name broker, how can 36names help me?

Whether you are working for a domain name buyer or seller, 36names can help you. We recognize that brokers provide valuable services and we want to partner with you to maximize that value.

We have a referral program that will both save your clients money and allow us to share commissions with you. For inquiries, contact: broker [at] 36names.com.

Can you help me negotiate / evaluate a domain?

We do not provide these services directly, but one of our highly qualified, trusted partners would be happy to serve you. Please email: contact [at] 36names.com for a FREE consultation.

Are your contracts legally binding?

Yes! 36names standardized, digitally customizable contracts are reviewed by legal counsel and legally binding under the State of California, USA.

Will you publicize a transaction I make on your platform?

Not unless both you and the opposing party provide explicit written consent.

As a lessee / buyer, how do I protect myself from a faulty domain name?

It is your burden to do your diligence to make sure that the value of the domain name you are leasing / buying has not been impaired.

There are numerous tools that allow you to do so, and here are a couple of useful blog posts: 1) How to Research a Domain you are Buying 2) Recover from any Google Penalty.

Additionally, you should also check for potential trademark infringement. Here is an useful article: Avoid Trademark Infringement When You Choose a Domain Name.

We can also refer you to one of our trusted partners who would be able to help you with these needs. Please email: contact [at] 36names.com for a FREE consultation.

As a lessor, how do I protect myself from domain name misuse by the lessee?

36names forbids lessees from hosting spam, virus, or pornography in all of our default lease contracts.

It is your job to understand who your potential lessee is and what he intends to do with your domain. It is also your burden to monitor what the lessee is doing with the domain after the contract is signed.

If evidence emerges that the lessee is violating the terms of the lease contract, please contact us immediately and we will review and take swift action as necessary. Please email: legal [at] 36names.com.

As a lessor, what if I'm leasing a domain to someone and someone else makes an outrageously high offer to buy that domain?

The right to use the domain legally belongs to the lessee and 36names cannot revoke that right unless the lessee breaks his lease agreement (misses payment, etc).

As a lessee, should I be worried that if the domain I'm leasing and developing starts to become the next Facebook, the original owner will try to take it back?

No! The original owner has no legal right to the domain unless you break the terms of the lease (miss payment, etc). You have the exclusive contractual option to buy the domain at the end of the lease or at anytime before.

As a lessee, what if I forget to make a monthly payment?

36names offers a 7 day grace period. After that, 36names will remove your access and return control of the domain to the owner.

Do I need to transfer my domain name to another registrar during a transaction?

No! If you sell or lease a domain name, 36names will contact you and ask you where your domain name is registered. Chances are, we have an account at that registrar. If not, we will create an account at that registrar.

You will then transfer the domain name to our account at that registrar, where we will 1) hold it throughout the lease term (for leases); or 2) hold it until the buyer submits the full payment (for purchases).

As a lessee, do I need to use a certain hosting provider?

No! You have complete freedom to decide which hosting provider to choose. We do recommend Digital Ocean, which is who we use to host 36names.

You may use this referral link to receive a $10 credit at Digital Ocean.

Our standardized, customizable contracts have been reviewed by legal counsel and are suitable for 95% of domain name leasing transactions.

If, however, you require non-standard clauses, such as an equity component, increasing monthly lease payments, increasing contractual purchase price, or ROFR for 3rd party purchase offers, we are able and happy to help. We can also allow the lessor (domain owner) to retain full control of the domain during the lease term if both sides agree. Depending on the request, we may charge an additional but reasonable fee. For inquiries: contact [at] 36names.com.

Questions or comments? Email us at contact [at] 36names.com.