Option To Buy, Right To Use

[pierso]

Let’s say I’ve registered a domain name in good faith with the intention of developing a suitable site and monetizing the domain name, all in accordance with AuDA’s policies.

Unexpected events mean that I cannot/no longer wish to develop the domain and now wish to sell the domain name, but unfortunately it is still within 6 months of the registration date.

What is to stop me from selling a prospective purchaser an option to purchase the domain at the end of the six month period and providing them with the right to use the domain name until that date?

Cooper Mills DL?.... anybody else?

 

[neddy]

Let’s say I’ve registered a domain name in good faith with the intention of developing a suitable site and monetizing the domain name, all in accordance with AuDA’s policies.

Unexpected events mean that I cannot/no longer wish to develop the domain and now wish to sell the domain name, but unfortunately it is still within 6 months of the registration date.

What is to stop me from selling a prospective purchaser an option to purchase the domain at the end of the six month period and providing them with the right to use the domain name until that date?

Cooper Mills DL?.... anybody else?

You are not prohibited from transfering your domain in the first 6 months - you just have to have a good reason and apply to auDA through your Registrar. They judge each case on its merits. Obviously if your reason is that you can't be bothered waiting for 6 months, then you will fail!

This issue, along with the issue you raise in your last paragraph, are dealt with in auDA's issues paper (page 6, Issue 2): http://www.auda.org.au/pdf/smwg-issues-paper.pdf

Hope that helps somewhat.
.

 

[pierso]

mmm..

Thanks Ned,
I found this part of the issues paper interesting...
"The block on domain name transfers within the first 6 months of registration is intended to prevent illegitimate registrations. However, it has been suggested that the policy may not be effective given a registrant could hand over control of the domain name or redirect traffic to the purchaser until the 6 month period expires, and then transfer the domain name without going through auDA for approval.

How much of this do you think goes on?
What can auDA or anybody else to to prevent it?

 

[Cooper Mills DomainLawyer]

Hi Pierso - this is an illogical policy that achieves nothing, except cause auDA and small business people headaches. Fortunately auDA is reviewing it at the moment, here's hoping that they get rid of it.

The key term to look at is in clause 4.1 of the Transfers (Change of Registrant) Policy which says: a registrant is not permitted to transfer their domain name licence within the first six months after registration of the domain name.

You can offer an option to purchase provided you don't transfer the domain name.

As you registered the domain name to develop it, you didn't register for the 'sole purpose of resale' in any case!

 

[pierso]

Thanks CMDL,
Any thoughts on when auDA will make a decisions on issues under review? 0-3mths? 3-6mths? 6-12mths? 12mths+?
Thanks in advance.

 

[neddy]

Any thoughts on when auDA will make a decisions on issues under review? 0-3mths? 3-6mths? 6-12mths? 12mths+?

Probably 0 - 3 months. I sat on this auDA panel, and it was a very interesting experience.

Bear in mind that even if the 6 month provision does get removed, the underlying policy intent will still remain. i.e.

"a registrant may not register a domain name for the sole purpose of resale".

With regard transfer policy, CMDL are spot on when they refer you to clause 4.1. What I was referring to earlier was clause 4.2:

4.2 A registrant may apply to auDA for authorisation to transfer their domain name licence within the first six months after registration of the domain name. Such authorisation will be at auDA’s discretion.

At the moment, you're not going to get permission if you have simply changed your mind and decided you no longer want to develop the domain (and you have a buyer for the domain)! But there are a range of reasons that auDA may consider are legitimate. I don't know what your changed circumstances are, and whether they would fall under this discretion. Why don't you give them a call and enquire? Or you can PM me if you want to and I can give you my opinion.
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[Chris.C]

You are not prohibited from transfering your domain in the first 6 months - you just have to have a good reason and apply to auDA through your Registrar. They judge each case on its merits. Obviously if your reason is that you can't be bothered waiting for 6 months, then you will fail!

What would AUDA say to selling a domain that you bought on the expiry auctions back to the previous owners who has contacted you within the 6 months after you have purchased it?

I know this has happened to me a couple of times and I have had to say that I couldn't sell it back to them even if I wanted to.

 

[neddy]

What would AUDA say to selling a domain that you bought on the expiry auctions back to the previous owners who has contacted you within the 6 months after you have purchased it?

I know this has happened to me a couple of times and I have had to say that I couldn't sell it back to them even if I wanted to.

I'm glad you raised this, because this is one of the exceptions that auDA will consider on its merits. This has been my experience anyway.

Provided there is a genuine enquiry from a previous owner (and you in no way have tried to elicit an enquiry!), then auDA will look at the facts and the paper trail and make their decision accordingly. In fact, I think auDA likes the fact that you are trying to do the right thing.

You don't have to declare prices or anything - as long as the previous owner and you have reached mutual agreement, then I would say you'd have a good chance of getting auDA's permission to transfer the domain. Nothing is guaranteed of course.
.

 

[Chris.C]

Thanks for the feedback Neddy that's awesome to know.

 

[DamianLondon]

What would AUDA say to selling a domain that you bought on the expiry auctions back to the previous owners who has contacted you within the 6 months after you have purchased it?

I know this has happened to me a couple of times and I have had to say that I couldn't sell it back to them even if I wanted to.y

I agree Chris, and domain owners should be made more aware of what you can do in this situation. With the increasing popularity of domaining in OZ, there are going to be many more cases like this.

 

[Cooper Mills DomainLawyer]

I have previously been told that auDA's position is that they are not likely to entertain granting consent if any money is being exchanged

 

[neddy]

I have previously been told that auDA's position is that they are not likely to entertain granting consent if any money is being exchanged

All I can relate to you is my experience. In May, I applied to auDA to transfer back a domain I purchased on the drops in April (to the previous owner). This was after I had been approached by them by email.

The approval was applied for through my Registrar (Drop). All I did was submit the original enquiry email from the previous owner.

This was my email to Drop:

Can you please apply to auDA on my behalf to COR this domain now.

I acquired it on the drops on X/4/2011, and obviously it falls within the 6 month prohibition (unless there is a good reason).

As you can see, the previous owner contacted me by email, and under the circumstances I have agreed to transfer it back. I believe these are the sort of circumstances that auDA allows.

I got an email back the same day approving the early COR.

I think auDA are wise enough to know that money would be being exchanged - after all I did buy the name at auction and would at least need to recoup my outlays / expenses. But auDA didn't require to know the agreement we came to - they were just happy to approve something that there was mutual agreement on.

As I intimated in my earlier post, as a starting point, your "hands must be clean" - in other words, you got approached and didn't do any approaching!

But always remember, circumstances vary, and nothing is guaranteed!
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[ScottNugent]

As I intimated in my earlier post, as a starting point, your "hands must be clean" - in other words, you got approached and didn't do any approaching!

This sounds and IS vital, I think. I'm sure you could try and "trick" AuDA if you wanted, but that could just be detrimental to the cause. Be honest and hopefully they will allow it.

 

[smee]

In a similar way, is there anything in the AUDA policy to prevent purchasing a domain, then renting it out for periods of time? At first glance it sounds the same as having affiliate links on the website, but I'm thinking more like the entire website being used by one company for a few months, then a different company can use it.

 

[Cooper Mills DomainLawyer]

there is no restriction on sub-licensing but auDA's says that you must remain eligible to hold the domain name. They are going to publish their views on this soon

 

[smee]

there is no restriction on sub-licensing but auDA's says that you must remain eligible to hold the domain name. They are going to publish their views on this soon

Thank you!