Leasing is a rental with at the end of the rental period an option to purchase for a sum taking into account the payments made as rent.
Leasing is the result of the American practice of leasing, which differs from “lease”. In leasing, the cumulative rental installments cover the value of the asset and interest, which are not covered in the operational lease or “lease”.
Leasing is rental financing where the user of the property can obtain 100% financing. Rents can be constant or decreasing.
Leasing has been the subject of legislation, both because of French interventionism and the importance of the fiscal aspect which has been the advantage of leasing, with deductibility of rents (with a limit for motor vehicles) which in fact makes it possible to deduct not only the interest but also the principal. Leasing was governed by the law of July 2, 1968, now codified by the Monetary and Financial Code.
In furniture leasing, the business or professional chooses the goods they need and negotiates the price and conditions with the supplier. The goods are purchased by a leasing company, which is billed by the supplier who delivers them to the company or professional. The company or the professional rents them to the lessor credit.
Leasing and lessee credit rights
The financial lease is treated in the accounts as if the lessee credit was the owner with a credit matched in the name of the “substance over form” principle.
Some qualify lessee credit law as economic propertywhich would be an imperfect form of property. However, it should be noted that the situation of the borrower credit is fundamentally different from that of the borrower owner. Leasing is a formula that makes it easier to obtain financing because the lender has the attributes of the owner which allow him to have a much more favorable situation than the lender even with a mortgage guarantee. In the event of difficulties, the lessee is liable to lose all rights to the property, with a considerable termination indemnity if it is at the start of the leasing period and a loss which is all the more consequent if it has paid rents as and when the profession in the rental period.
Leasing: provisions of the Monetary and Financial Code
Articles 313-7 and s. of the Monetary and Financial Code op
Equipment leasing: equipment or material rental operations
Real estate leasing: real estate rental operations
Leasing on business or craft establishment: rental of business or craft establishment
Advertising of leasing transactions
Articles 313-9 and s.
Termination of the real estate leasing contract
Article L. 313-9, paragraph 2, of the Monetary and Financial Code
Real estate leasing contracts provide, on pain of nullity, the conditions under which their termination may, if applicable, take place.
Lease termination indemnity
” having exactly retained that by making the lessee the sole obligation to pay the outstanding capital, representing a sum appreciably lower than the aggregate of the rents remaining to run until the end of the contract since it did not include interest, the early termination clause was in no way contrary to the provisions of article 1-2, paragraph 2, of the law of 2 July 1966
Cass.civ. 3, 27 June 2001
Leasing and economic difficulties
the Court of Appeal, which did not have to do research or respond to conclusions that its findings made inoperative, and which held that the lessee retained full responsibility for this purely patrimonial transaction which he had expected benefits, was able to deduce that the lessor, who was not responsible for the difficulties of the office rental market at the time and who had only applied the terms of the contract, did not have the obligation to propose a protocol modifying the initial contract and had committed no fault;
Cass.civ. 3 December 10, 2003
Liability of the lessee
Liability of the lessee credit continuing to occupy the premises after termination of the contract:
Articles L. 313-7 et seq. of the Monetary and Financial Code governing leasing not containing any special provision on the obligations of the lessee with regard to the maintenance of the building, the provisions of Article 1732 of the Civil Code,