John Berryhill Highlights Risks in GoDaddy LTO TOS

A week ago, I shared how I am cautious with offering a Lease to Own option on some of my domain names. I do not want to put my valuable domain names at risk by allowing buyers to pay for them over a long period of time while potentially putting them at risk.

With GoDaddy now offering LTO to some buyers and a roll-out to all buyers expected soon, IP attorney John Berryhill shared some commentary on Twitter regarding the risks for sellers based on the GoDaddy LTO Terms of Service (TOS):

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn


  1. Those are what I would call…..100% DEALBREAKERS!!

    Without those protections, the domain owner could and would be liable.

    I don’t think you want the FBI knocking at your door at 5 am.

    This sets that possibility up!!

    AVOID until/if they fix it!!

  2. Thanks Elliot and John for addressing this and bringing awareness to people about what I feel is some very important information. Hopefully, all the marketplaces are reading this and decide to show all sellers the consideration of protection when using their LTO offerings.

  3. I have totally completely removed all my high price premium domains in Dan afternic gd and any other platforms associated with gd
    No need the BS going on.
    I can sleep well….now

  4. I know I’m working on language to address myself now and will then with a respected lawyer for final version. The seller’s wellbeing and concerns to must be inserted into any LTO I choose to offer. It should be something any other seller should be doing or wanting to do.

    Tho, I have to say that when discussing the issue in various Clubhouse Domain rooms there’s be no shortage of people that seem to have no concerns or interest in having this language in the LTO contracts and it baffles me how anyone could not care about the risks posed.

    I feel pretty sure that will be open to allowing it’s use but not sure any of the other platforms will be. Especially Godaddy/Afternic who I think will be resistant to insert it. The language I’ve personally read and that which I’ve been told about. Which is in their LTO contracts contain little to nothing that takes the seller’s concerns but they make sure to have plenty that protects them.

    This information being added is critical for the sellers “safety” and protection of our assets. Especially since I think LTOs are going to become much more used moving forward. I have no doubt it will help get more deals done especially considering todays economy. Once done besides my use I’d be happy to share it with others if they are interested. I’ve been told by a few folks they don’t want to use this language since it could “kill a sale”.

    Frankly, I can live with that a lost sale since we’ll see more sales with LTO anyhow. There’s no reasonable excuse I can think of that any individual or a corporation with legit intent to not abuse or allow the domain to abused that would cause them to take issue with it.

    Besides the other issues mentioned it should also state they cannot sell or sublet the domain to a new party … that should result in terminating the agreement. If the other party is interested they are welcome to buy the domain and agree to the terms themselves.

    Thank you John and any other lawyers making this important issue public for all to see. I hope it opens the eye of anyone that doesn’t understand how critical this is for us as domain sellers and owners of the properties.

    Anyhow … sorry for the drawn out language but if it helps the issue it was worth spending the time sharing it.



  5. in the first place, godaddy’s LTO is more of a finance model than it is a lease model, but suffice to say, common sense should dictate that simply by virtue of the fact you have the inability to vet the potential lessee and document his intended use of the domain prior to executing a lease, should make it a non starter.
    that’s not to mention their lack of a clearly outlined acceptable use policy (AUP) or a Damages Fee clause to cover misuse of the domain, or a Compensation Payment (based on the domain owners assessed fair market value) that covers liquidated damages in the event of loss of ownership of the domain as a result of lessee misuse of the domain (blatant trademark infringement etc)

    seems to be a model that caters to folks who are desperate enough to market their domain assets without showing them the respect they deserve…

  6. Hi Steven, I agree … how they’ve set their contract up is no surprise based on their focus on themselves and the buyers with very little concern for the seller. Whether it’s about getting the quickest commission as possible and/or the buyer the best price. Them offering the protections on LTOs will create complications for their current business model.

    That lack of concern is in part shown when you register a domain there and it automatically assigns a PPC page which the owner gets nothing for the clicks and more importantly offers no automatic negative keywords for domains where them not being there could result in TM infringement and get us a UDRP.

    Shown as well obviously in their as mentioned here their current LTO contracts offering no protection or consideration for the seller’s well being. I’d like to think it’s just poor contract creation instead of an intentional thing and they as well as other platforms offering LTO will take swift action to make changes to their agreements.

    Change there and on other marketplaces is also going to require sellers/owners to realize the seriousness here. Then be willing to show objection to it whether personally or maybe trying to get the ICA to see if they can get something accomplished by insisting we see change. I’ve found in conversations with a number of other domainers that there’s been little to no concern about this contract issue which is bit baffling considering the risks. But they are mostly just happy to get the sale done and are willing to overlook the risks they are taking to close that sale.

    Putting the proper language may possibly cause some sales not to go through. But personally I can live with that. Since I believe that LTO can increase our sell through rate with buyers who see that LTOs will offer them the opportunity to own domains they otherwise couldn’t afford. Also, that they don’t want to be protected any less than sellers should be, don’t have any intentions to ignore doing those things that can create the issues, and who actually read the contracts they sign to make sure they understand what they are agreeing too. Unfortunately, there is no shortage of people out there who will find ways to use LTOs to their benefit and willing to see the seller screwed as a result.

    Keeping my fingers crossed now that these issues have been made publicly by well educated & respected people like John Berryhill and Elliot it will get people to pay attention and actions taken. If there’s no ill intent on the part of the marketplaces there are no good excuses not to insert language protecting all parties involved no less the sellers.

    Have a good day,


  7. Our standard lease agreement is only four pages, covers disputes and potential claims.

    On the other hand, I doubt A/Dan/GD will go an extra mile to do due diligence on the lessees. Will be interesting to see some cases going public eventually.

    Lease2Buy within short period of time is an interesting option still as the buyer is more of a lock in than the seller.

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