Purchasing a domain name is one of the first and most important steps new businesses take in the Internet Age. But “purchasing” a domain name does not lead to ownership. In fact, domain names are technically leased from the domain name registry. This is a common misconception, and it’s important for domain name purchasers to be aware of it.
Domain names have what one might call a “life cycle.” They exist perpetually, and they can be leased by as many websites as are willing and able to pay for them.
All domain names exist in the domain name registry, and can be accessed and searched through using a registrar website like GoDaddy.com. These websites will show what domain names are currently available. Available names can then be leased for a period between 1 and 10 years. The buyer of the domain name must keep it in the registrar for at least 60 days, after which it can be transferred to any other registrar if so desired.
The domain name will remain registered for the specified period determined at its purchase. It can be renewed before the period has ended and most registrars will send notice soon before the period closes. It is very important for websites wishing to keep their domain names to know when the period is up, and to renew before the period closes.
If a domain name is not renewed before the end of the registration period, it will be deactivated within 24 hours of the period’s closing. At this point, the domain name will be considered expired. An expired name will block access to the website, even for the operator, and will be more expensive to renew. A domain name cannot be transferred to another registrar if it is expired, and registrars typically only keep expired names for up to 45 days.
When the expired period is up, the domain name will enter into a grace period of 30 days. This is when most registrars delete all the information concerning the name and will charge significantly more money for its renewal.
After the grace period ends, the domain name is considered deleted. It will remain deleted for 5 days and then be placed back into the registry for anyone to purchase. This means that the purchaser who failed to renew it will have no greater claim to it than anyone else.
The most important thing to remember about domain names is that they are not owned. They are leased, and they can be lost. If you operate a website and would like to continue operations under the same name, it is important to know when your registration period closes, and to renew the domain name before that date.
Understanding the lifecycle of a domain name requires understanding the three-tier structure of the domain name system (DNS): registries, registrars, and registrants.
A registry is the organization that maintains the master database for a particular top-level domain (TLD). Verisign operates the .com and .net registries. The Internet Assigned Numbers Authority (IANA) delegates responsibility for each TLD to a specific registry operator. Registries set the wholesale prices for domain registrations and the technical rules governing their operation, but they generally do not sell directly to the public.
A registrar is a company accredited by ICANN (Internet Corporation for Assigned Names and Numbers) to sell domain name registrations to the public. GoDaddy, Namecheap, Network Solutions, and Google Domains are familiar examples. Registrars purchase domain registrations wholesale from registries and resell them at retail to registrants. The terms of service you agree to when registering a domain are with the registrar, not the registry.
A registrant is the person or entity that leases a domain name from a registrar. As a registrant, you have a contractual right to use the domain for the period of your registration, subject to the registrar’s terms of service and ICANN’s policies. You do not own the domain in the traditional property law sense.
The consequences of failing to renew a domain can range from inconvenient to catastrophic, depending on the domain’s value to the business. For a small business whose primary web presence is tied to a single domain, expiration means immediate loss of website access, email functionality, and potentially years of accumulated SEO authority.
When a domain lapses into the redemption period, the registry charges a significant premium — often $100 or more — for restoration. Beyond the redemption period, the domain is released for public registration, and there is no legal preference given to the prior registrant. Domain investors and cybersquatters monitor expiring domains actively using automated tools. High-value domains that lapse are frequently registered by third parties within minutes of becoming available.
This is not a hypothetical risk. Businesses have lost domain names worth hundreds of thousands of dollars due to failed renewal notifications, payment card expiration, and administrative oversights. Recovering a lapsed domain from a third-party registrant who registered it in good faith — with no knowledge of the prior registrant’s claim — is legally and practically difficult.
Domain name registrations can be transferred between registrars and between registrants. Registrant-to-registrant transfers — effectively sales of domain names — are common transactions in the secondary domain market. From a legal standpoint, these transactions involve the transfer of a contractual right, not title to property in the traditional sense. Domain sale agreements should clearly specify what is being transferred, the transfer process, representations and warranties about the domain’s status, and remedies for failed transfers.
When a domain name is transferred as part of a broader business transaction — an asset purchase, a corporate acquisition, or a website sale — the domain transfer must be executed as a separate step through the registrar’s transfer process. A purchase agreement that conveys “all assets” of a business does not automatically transfer domain names; the registrar must process an authorized push or registrant change. Failing to properly transfer domain names in business transactions is a common and costly oversight.
Given the value that domain names can represent and the ease with which they can be lost, businesses should treat domain management as a serious operational function, not an afterthought. Best practices include:
Whether you are buying, selling, or protecting domain names, Revision Legal’s internet attorneys provide experienced counsel on all aspects of domain name law. From transfer agreements to theft recovery to cybersquatting disputes under the Uniform Domain Name Dispute Resolution Policy (UDRP), we handle the full range of domain name legal issues. Contact us today to discuss your needs.
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