Leasing is a special financial lease, on the basis of which the lessee can take ownership of any expensive object after a certain period of time will transfer the rent to the owner of the property. The lessor is the second participant in this transaction, which is represented by the owner of the leased object. He buys into ownership any item represented most often by a car, real estate or expensive equipment. He transfers the property to the second party to the agreement on the basis of a leasing agreement. At the same time, the conditions on the basis of which cooperation is carried out are prescribed in the contract.
Leasing concept
Leasing is also called finance lease. Its features include:
- the lessor, seller of property and lessee participate in such a transaction;
- parties to the agreement may be private individuals or companies;
- such a transaction is concluded in that certain property is transferred by the owner to the other party for temporary use for a certain fee;
- the choice of a seller of property can be made by both parties to the leasing agreement;
- at the end of the leasing term, the lessee may redeem the item used;
- any organization can act both as a seller and a lessee;
- A feature of financial leases is that completely new property is transferred for use, moreover, it is often chosen by the direct lessee, after which it is acquired by the lessor.
All of these factors must be considered by all parties to the agreement.
Transaction participants
There are three participants in such a transaction, which include the lessor, lessee and seller of property. Therefore, at least two contracts are drawn up. These agreements are interrelated.
A lessor is a party to a transaction that makes a profit from transferring the purchased property to another party. In this case, the lessee may redeem property if necessary. But he can decide to return the item.
Who can be a lessor?
If any company or person wants to become a participant in the leasing, they must understand what leasing, the lessor and the lessee are. Each participant has both rights and obligations. Additionally, after signing a formal agreement, they have a certain responsibility to each other.
The lessor may be:
- private individuals officially registered as individual entrepreneurs;
- lessor companies, and even banks may apply to them, but for this purpose, the charter should contain information that allows you to engage in this type of activity.
Leasing may be offered to different companies as well as individuals. The conditions for any client can vary significantly, since before signing the contract, the financial condition and other features of the person or company are carefully studied.
What actions are performed by the lessor?
A lessor is a company that offers customers specific services. They consist in transferring for use the property that the client needs, which was previously purchased from a suitable seller. The lessor, represented by the company, on the basis of this contract is obliged to perform several significant actions. These include:
- a certain agreement is reached with a specific client;
- Search for a seller offering property that meets the requirements of the client;
- the company acquires the item;
- the property is transferred to the client for use, for which a leasing agreement is drawn up, and the lessor remains the owner of this item, but receives a certain amount monthly for transferring the item;
- at the end of the term of the agreement, the leased asset may be returned to the company or transferred into the ownership of the lessee.
For a firm to have the right to engage in such activities, its constituent documentation must have relevant information.
The nuances of property leasing
The leased property remains in use by the lessee during the entire term of the contract. The leasing subject remains the property of the lessor, therefore it is he who acts as the owner of this property. The rules for the transfer of various objects on lease include:
- if, for various reasons, the recipient of the property ceases to deposit funds in the form of a fee by agreement, he may lose the right to use this item;
- if the lessee is declared bankrupt, then it is the lessor that has the priority right to receive payments under the leasing agreement;
- if the property is destroyed in any way, the recipient must reimburse the owner all the costs of the purchase of this item.
A leasing contract is legally binding only if certain conditions are in place. Therefore, the parties should responsibly approach the formation of this document. If it contains errors or clauses that violate the requirements of the law, it will not be possible to defend its rights in court.
What are the responsibilities of the lessor?
The obligations of the lessor are clearly stated directly in the formal contract. They must certainly be observed by the party to the transaction. These include:
- purchase from the seller of property that meets the requirements and desires of the lessee;
- transfer of the purchased item to the second party to the agreement;
- providing the seller of property with information that the item will be leased, and the notification should be made only in writing;
- reimbursement of the costs of the lessee related to the improvement, maintenance or repair work in relation to the property received, if this is prescribed in the official contract;
- at the end of the term of the agreement, property is taken back if the lessee for various reasons does not want to redeem it;
- the company is obliged to fulfill all the obligations specified in the leasing agreement.
If the lessor violates these obligations, this can lead to early termination of the contract or holding the company liable. Leasing may be offered to individuals or companies, but responsibilities remain unchanged.
Company reward
A lessor is a party to a transaction that receives a certain profit from its conclusion. Cash payments received from the lessee consist of two parts:
- direct remuneration for the transfer of property;
- compensation of costs incurred by the company in the process of purchasing the subject of the contract.
To determine the board, it is important to make the necessary calculations in advance. The risks of the lessor are connected with the fact that if the recipient of the property for various reasons refuses to transfer funds, the company will not be able to get the desired amount of profit. Although she has the right to recover compensation from the violator of the agreement, it will still be less than the profit that could be obtained from this transaction.
What are the rights of the company?
The rights of the lessor are presented in the following forms:
- independent selection of the subject of leasing, if this is provided for by the current leasing agreement;
- making claims to the lessee if he violates the terms of the contract or mishandles the property received, which leads to its damage or destruction;
- early termination of the contract while receiving compensation if the second party to the transaction violates the terms of cooperation;
- extension of the contract, if necessary for the lessee;
- resumption of cooperation on new conditions, which should be mutually beneficial.
If the contract is drawn up correctly, it can be used in court to uphold the rights of each participant. Therefore, if the lessee for various reasons refuses to transfer funds, then he will be forced to pay large compensation by court order.
What costs does the lessor face?
When providing leasing to individuals or companies, the lessor is forced to bear certain costs. These include:
- acquisition of property subject to a leasing agreement;
- expenses associated with the provision of various guarantees to the lessee;
- payment of property tax;
- if the item is bought in another state, then you additionally have to spend money on competent customs clearance and payment of customs duties and taxes;
- delivery and installation costs, as well as equipment adjustment, if such actions are provided for by the agreement;
- protection of property during its transportation or storage in a warehouse;
- expenses associated with the maintenance and repair of the item.
Additionally, expenses may arise when registering an object transferred to the lessee. Therefore, all these costs should be covered by the income received from the leasing agreement. This leads to the fact that after a preliminary agreement, the lessor must make some obligatory calculations to determine the optimal amount of the monthly fee.
Lessor Responsibility
The lessor is represented by a link between the user and the seller of the property. He has the necessary amount of funds needed to purchase this item. Further, the property is transferred to a client who can use it for its intended purpose, but does not become its owner.
The responsibility of a company that provides leasing services is as follows:
- if the company violates the interests or rights of the lessee, as well as the terms of the contract, the agreement may be terminated ahead of schedule, and the lessor will not be able to expect compensation;
- if property is provided for use by the second party to the transaction in violation of the deadlines, the lessee may require the calculation of a penalty;
- if an item is transferred that does not meet the requirements of the client, this can lead to a significant reduction in monthly payments.
Therefore, it is in the interests of a direct leasing company to strictly follow the terms of the contract.
Conclusion
The lessor is represented by a company that leases any property to other companies or individuals. He can be represented by a citizen who formalized the IP. He has numerous rights and obligations.
If the lessor violates the clauses of the official agreement, then he will have to bear responsibility for his actions. It is represented by early termination of the contract, lack of compensation and other negative consequences.