I have option to outsource to Register.com for small%.
Considering the markup is only 5-10$/domain, why would any host want to put up with the whining that occurs when a client leaves and must nag you to get the dns switched. For 5 bucks i am not really interested in wasting my time or assuming the liability. What are the legal ramifications of killing a domain when its time to re-up and you cant bill a bad/expired cc or contact the registrant????
Not good!!

(not a lawyer, not a legal opinion)

If you bill seperately for the domain you should begin notifying the customer at least 30 days in advance of expiration. If they don't respond send a certified/return receit snail mail telling them it's urgent they pay or their site will be deactivated. If they are paying by CC then you may want to include in your TOS that domain renewals are automatically charged to the CC when due unless otherwise instructed by the customer. Too often people think domains are like the phone or electric bill - it won't really be turned off if it isn't paid when they want it.

As to deactivating a domain that didn't pay it's registration renewal fee, almost certainly you'll have a customer up in arms over it. That's why you need good paper documentation to show you made a good faith effort to contact them about it and get their payment.

It's an ugly situation.

Jaiem,

Thanks for the info.

So the real question appears why risk the lawsuit or put up with the headaches when you can make a % deal.
UNLESS A HOST IS POPPING ENOUGH REGISTRATIONS TO MAKE GOOD$
WHY NOT OUTSOURCE?-THIS WILL ELIMINATE YOUR LIABILITY TO THE DOMAIN NAME ISSUE

Would some of the more senior types :) care to share with us how many new domain reg's per month you're making???

Maybe I was misunderstanding your question.

Domain name and domain server are two seperate things. The client pays for the domain name renewal and the monthly for the server seperately. If they don't pay the domain renewal the domain name gets suspended but as long as they keep paying for the server you keep it up.

Suppose you do outsource. The outsourced registar sends a bill to your client. For whatever reason your client doesn't pay so the domain name is shut down by the registrar. What do you do with the server?

I saw that happen to a very large site last year. For whatever reason they didn't pay their registrar renewal fee and the host shut them down. The fee was eventaully paid and the site was back up but it was down for a few weeks.

That also happened to a big corp site with Nic (I forget exactly which site). They didn't pay their renewal fee so Nic shut down the domain. Now if a major corp can't get their act together to pay a $70 domain fee imagine what trouble smaller companies can get into!

It's not a happy situation either way.

Back 4 more

Re the issue of domain name reg. If a small company registers with xyz domain reg company and one year later they do not pay their bill to the domain reg company. The name will be suspended and all http inquiries will lead to a null--Correct?
At this point the webhosting client has no issue with the host because the client is responsible to xyz for this domain name. since i host by ip's the site will still be visible by ip call, and i have fulfilled my obligation by providing hosting . im out of the loop for the laggards and out of the loop for the potential lawsuits. and now to real question:

Is anyone making good $$ by registering new domains?-this would be the only reason to put up with this bs for 5 or 10 bucks/year, you gotta do a lot of volume!

One other point - If they do decide to sue you may still get named in the suit. As far as the client knows their site wasn't available and since you host it they may think it was your fault. That's why you need to document your attempts to collect the fee from them.

If the client has registered their domain with someone else on their own (not through you) then you may need to show that it's beyond your control.

Either way you may end up in court to explain the situation. Don't expect the judge or lawyers to understand the difference between hosting and domain registration.