Topic 3. LEASE, LEASING, LOANS

3.1. Lease contract

According to the norm of art. 606 of the Civil Code, under a lease (property lease) agreement, the lessor (landlord) undertakes to provide the tenant (tenant) with property for a fee for temporary possession and use or for temporary use. Currently, there are several types of lease:

▪ rental;

▪ rental of vehicles;

▪ rent of buildings and structures;

▪ rent of enterprises;

▪ financial lease (leasing).

The general provisions on lease (§ 1 of Chapter 34 of the Civil Code) apply to these types of contracts, unless otherwise established by special rules on these contracts.

By legal nature, the lease agreement is consensual, paid and bilateral.

According to Art. 607 of the Civil Code, land plots and other isolated natural objects, enterprises and other property complexes, buildings, structures, equipment, vehicles and other things that do not lose their natural properties during their use (non-consumable things) can be leased.

Only individually-defined items are rented out.

The object of the lease agreement is both movable and immovable property. However, immovable property that can be leased under the rules of Sec. 34 of the Civil Code, should not be intended for human habitation. The rental of residential real estate is regulated by special rules of Ch. 35 GK.

The law establishes the types of property, the lease of which is not allowed or limited (power plants, weapons, public railways, etc.).

According to the current legislation, the only essential condition of the lease agreement, as required by law, is the condition on the subject of the lease. The lease agreement must contain data that make it possible to definitely establish the property to be transferred to the tenant as an object of lease. In the absence of these data in the contract, the condition on the object to be leased is considered not agreed by the parties, and the corresponding contract is not recognized as concluded (clause 3 of article 607 of the Civil Code).

The parties to the lease agreement are the landlord and the tenant. The landlord may be the owner, as well as a person authorized by law or the owner to lease property (Article 608 of the Civil Code).

According to paragraph 1 of Art. 609 of the Civil Code, a lease agreement for a period of more than a year, and if at least one of the parties to the agreement is a legal entity - regardless of the term, must be concluded in writing. A real estate lease agreement is subject to state registration, unless otherwise provided by law (clause 2, article 609 of the Civil Code).

The lease agreement is concluded for a period specified in the agreement. If the lease term is not specified in the agreement, the lease agreement is considered concluded for an indefinite period (clause 1,2 of article 610 of the Civil Code). Thus, the term is not an essential condition of the lease agreement, since this agreement can be concluded without its approval.

In the event that the lease agreement was concluded without specifying a period, each of the parties has the right to withdraw from the agreement at any time by notifying the other party one month in advance, and in the case of real estate lease - three months in advance. The law or the contract may establish a different period for warning about the termination of the lease agreement (paragraph 2, clause 2, article 610 of the Civil Code).

The landlord must provide the tenant with property in a condition that complies with the terms of the lease agreement and the purpose of the property (clause 1 of article 611 of the Civil Code).

The tenant is obliged to use the leased property in accordance with the terms of the lease agreement, and if such conditions are not defined in the agreement, in accordance with the purpose of the property (clause 1, article 615 of the Civil Code). The tenant must exercise the same degree of care in the use of the leased property that he shows to his own property. According to paragraph 2 of Art. 616 of the Civil Code, the tenant is obliged to maintain the property in good condition, carry out current repairs at his own expense and bear the costs of maintaining the property, unless otherwise provided by law or the lease agreement.

The lessor is obliged to carry out major repairs of the leased property at his own expense, unless otherwise provided by law, other legal acts or the lease agreement (paragraph 1 of article 616 of the Civil Code).

Due to the compensated nature of the lease agreement, the main obligation of the lessor is the timely payment for the use of property (rent). At the same time, the condition on lease payments does not apply to the essential terms of the lease agreement. According to par. 2 p. 1 art. 614 of the Civil Code, the procedure, conditions and terms for paying rent are determined by the lease agreement. However, in the event that they are not defined by the contract, it is considered that the procedure, conditions and terms that are usually applied when renting similar property under comparable circumstances have been established.

For a lease agreement, the nature of the remuneration is not so important: it can be both monetary and have a different material form.

Lease payments must be made in the manner and within the terms stipulated by the agreement. Unless otherwise provided by the contract, in the event of a significant violation by the lessee of the terms for paying the rent, the lessor has the right to demand from him early payment of the rent within the period established by the lessor. At the same time, the landlord is not entitled to demand early payment of rent for more than two consecutive terms (paragraph 5 of article 614 of the Civil Code). He also has the right to collect interest under Art. 395 of the Civil Code and losses caused by late payment.

Unless otherwise provided by the agreement, the amount of rent may be changed by agreement of the parties within the time period not provided for by the agreement, but not more than once a year. The law provides for other minimum periods for reviewing the amount of rent for certain types of lease, as well as for the lease of certain types of property (paragraph 3 of article 614 of the Civil Code).

The tenant owns the right of ownership to the fruits, products and incomes received as a result of the use of the leased property in accordance with the contract (part 2 of article 606 of the Civil Code).

During the term of the lease agreement, the lessee is given the opportunity to have limited disposal of the leased object and the right to lease. So, the lessee has the right, with the consent of the lessor, to sublease the leased property (sublease) and transfer his rights and obligations under the lease agreement to another person (transfer), unless otherwise provided by law. When subletting property, the lessee remains liable under the contract to the lessor (paragraph 1, clause 2, article 615 of the Civil Code).

The transfer of ownership (economic management, operational management, lifetime inheritable possession) to the leased property to another person is not a basis for changing or terminating the lease agreement (clause 1, article 617 of the Civil Code).

Unless otherwise noted in the law or the lease agreement, the tenant, who duly performed his duties, after the expiration of the term of the agreement has, all other things being equal, the right to conclude a lease agreement for a new term (paragraph 1 of article 621 of the Civil Code).

A law or an agreement may provide for the right to redeem the leased property upon the expiration of the lease term or before its expiration, provided that the lessee pays the entire redemption price stipulated by the agreement. However, the law may define cases of prohibition of the repurchase of leased property (Article 624 of the Civil Code).

The main reason for the termination of the lease is the expiration of its term. However, if the tenant continues to use the property after the expiration of the contract in the absence of objections from the lessor, the contract is considered renewed on the same terms for an indefinite period (paragraph 2 of article 621 of the Civil Code). The lessor and the lessee have the right to cancel the contract concluded for an indefinite period at any time by notifying the other party about it one month in advance, and when renting real estate - three months in advance.

With regard to lease agreements concluded for a fixed period, the law provides for early termination of the agreement by the court at the request of the landlord in cases where the tenant:

▪ uses the property with a significant violation of the terms of the contract or the purpose of the property or with repeated violations;

▪ significantly deteriorates the property;

▪ fails to pay rent more than two times in a row after the expiration of the payment period established by the contract;

▪ fails to carry out major repairs of the property within the time limits established by the lease agreement, and if they are not specified in the lease agreement, within a reasonable time in cases where, in accordance with the law, other legal acts or the agreement, major repairs are the responsibility of the tenant.

The landlord has the right to demand early termination of the contract only after sending the tenant a written warning about the need to fulfill his obligations within a reasonable time (Article 619 of the Civil Code).

In Art. 621 of the Civil Code provides grounds for termination of the lease agreement by the court at the request of the tenant.

Upon termination of the lease agreement, the tenant is obliged to return the property to the landlord in the condition in which he received it, taking into account normal wear and tear or in the condition stipulated by the agreement (Article 622 of the Civil Code).

3.2. Financial lease (leasing) agreement

According to the norm of art. 665 of the Civil Code, under a financial lease agreement (leasing agreement), the lessor undertakes to acquire ownership of the property specified by the tenant from the seller specified by him and provide the tenant with this property for a fee for temporary possession and use for business purposes. In this case, the lessor is not responsible for the choice of the leased item and the seller.

In the codified civil legislation of Russia, the financial lease (leasing) agreement was for the first time enshrined in the norms of § 6 Ch. 34 GK. In addition, there is Federal Law No. 29.10.1998-FZ of October 164, XNUMX "On Financial Leasing (Leasing)" and a significant number of by-laws.

Leasing is widespread in international commercial practice. It is currently regulated by the UNIDROIT Convention on International Financial Leasing, signed in Ottawa on May 28, 1988. Russia has been a party to this Convention since 1998 (Federal Law No. financial leasing).

The main forms of leasing are internal leasing and international leasing (clause 1, article 7 of the Federal Law "On financial leasing (leasing)".

The parties to a leasing agreement are the lessor (lessor) and the lessee (lessee). As follows from the norm, Part 2, Art. 665 of the Civil Code, a leasing agreement can only pursue entrepreneurial goals, therefore, only entities engaged in commercial activities, including non-commercial legal entities, to the extent that they can carry out such activities, can be parties to it.

Since the current legislation refers to a leasing agreement as a lease agreement and the parties to it are legal entities, the form of this agreement must be in writing. Real estate leasing contracts are subject to state registration (Article 609 of the Civil Code).

The term of the lease agreement is determined at the discretion of the parties in accordance with the rules of Art. 610 GK.

The essential terms of the leasing agreement are the conditions on the object of leasing, on the seller of this object and on the exclusively entrepreneurial purpose of using the object of leasing.

One of the main features that distinguish a leasing agreement from other types of a lease agreement is the obligation of the landlord to buy the property specified by the tenant from the seller specified by the tenant (part 2 of article 665 of the Civil Code). However, the leasing agreement may provide that the choice of the seller and the acquired property is carried out by the lessor (part 2 of article 665 of the Civil Code).

For the execution of a leasing agreement, some features are characteristic. Thus, the execution of this agreement by the lessor begins with the acquisition of the leased object indicated by the lessee from the seller chosen by him under the contract of sale. In this case, the lessor is obliged to notify the seller that the property is intended to be leased to a certain person (Article 667 of the Civil Code). Reporting to the seller of information about the person to whom the leasing object is being leased is necessary because, by virtue of the law, the rights of claim under the contract of sale are transferred to the lessee (lessee). At the same time, the tenant has the rights and bears the obligations provided for by the Civil Code for the buyer, except for the obligation to pay for the acquired property, as if he were a party to the contract for the sale of the said property. However, the tenant cannot terminate the sales contract with the seller without the consent of the landlord. In relations with the seller, the tenant and the landlord act as solidary creditors (paragraph 1 of article 670 of the Civil Code).

The lessee at his own expense carries out maintenance of the leased asset and ensures its safety, as well as carries out major and current repairs of the leased asset, unless otherwise provided by the lease agreement.

The leasing agreement may provide that the subject of leasing becomes the property of the lessee after the expiration of the leasing agreement or before its expiration on the terms stipulated by the agreement of the parties. The federal law may establish cases of prohibition of the transfer of ownership of the subject of leasing to the lessee (Article 19 of the Federal Law "On Financial Lease (Leasing)").

An important duty of the tenant (lessee) is to make lease payments.

The lessor has control rights. He has the right to exercise control over the observance by the lessee of the terms of the leasing agreement and other related agreements.

Upon termination of the leasing agreement, the general provisions on the return of the leased property to the lessor (Article 622 of the Civil Code) apply.

3.3. Contract for gratuitous use (loans)

In accordance with paragraph 1 of Art. 689 of the Civil Code, under a gratuitous use agreement (loan agreement), one party (the lender) undertakes to transfer or transfers the thing for gratuitous temporary use to the other party (the borrower), which undertakes to return the same thing in the condition in which it received it, taking into account normal wear and tear or in the condition stipulated by the contract.

The loan agreement can be both consensual and real. A consensual loan agreement takes place when, under the terms of the agreement, the obligation of the lender to transfer the thing for gratuitous use arises from the moment it is concluded. In the absence of such a condition, the loan agreement is considered concluded from the moment the thing is transferred for free use, i.e. it is a real deal.

According to the subject composition, consensual loan agreements are bilateral, but there is no sign of reciprocity in them, since the obligation of the lender to transfer the thing for gratuitous use does not correspond to the right of the borrower to demand such a transfer. By virtue of the gratuitous nature of the loan agreement, if the lender fails to fulfill the obligation to provide the thing for gratuitous use, the borrower does not have the right to demand the transfer of the thing in kind, but has the right to demand only termination of the agreement and compensation for real damage suffered by him (Article 692 of the Civil Code).

The bilateral nature of a real loan agreement is expressed in the presence of different rights and obligations for both parties. So, in addition to the rights, the lender has obligations to be responsible for the shortcomings of the thing transferred for gratuitous use (Article 693 of the Civil Code), and for harm caused to a third party as a result of the use of the thing (Article 697 of the Civil Code).

The parties to the loan agreement are the lender and the borrower. According to paragraph 1 of Art. 690 of the Civil Code, the lender may be the owner or another person authorized by law or the owner.

The law does not define who can be a borrower, therefore, it can be any person. However, there are exceptions. So, a commercial organization is not entitled to transfer property for free use to a person who is its founder, participant, head, member of its management or control bodies (clause 2 of article 690 of the Civil Code).

The subject of a loan agreement can be individually defined and non-consumable things, both movable and immovable.

The loan agreement must contain data that make it possible to definitely establish the property to be transferred to the borrower as an object of use. In the absence of such data in the contract, the condition on the object to be transferred is considered not agreed by the parties, and the contract for gratuitous use is not considered concluded. Documentary confirmation of the data allowing to identify the subject of the loan must be the same as when concluding a lease agreement.

Since the use of property under a loan agreement is free of charge, the fruits and income from the thing transferred to the loan belong to the lender as the owner of the thing. However, the agreement of the parties may provide otherwise.

The form of the loan agreement must comply with the general rules on the form of transactions. Within the meaning of paragraph 1 of Art. 131 of the Civil Code, state registration of the transfer of real estate for free use is required.

A loan agreement can be concluded for a fixed period, and if the period is not specified in the agreement, it is considered concluded for an indefinite period (clause 1, paragraph 1, clause 2, article 610 of the Civil Code). In the latter case, the term of the contract is limited to the moment the property is claimed by the person who provided it.

In view of the similarity of lease and loan agreements, many rules relating to the lease agreement apply to the loan agreement (paragraph 2 of article 689 of the Civil Code).

The main obligation of the lender is to provide the borrower with a thing in a condition corresponding to the terms of the contract and its purpose (paragraph 1 of article 691 of the Civil Code).

The obligation of the borrower to maintain the thing is the obligation to maintain the thing received for gratuitous use in good condition, including the implementation of current and major repairs, and to bear all the costs of its maintenance, unless otherwise provided by the contract (Article 695 of the Civil Code).

The borrower is obliged to use the thing transferred to him for gratuitous use in accordance with the terms of the contract, and if such conditions are not established in the contract, then in accordance with the purpose of the thing. In case of violation of this obligation, the lender has the right to demand termination of the contract and compensation for losses (clauses 1, 3 of article 615, clause 2 of article 689 of the Civil Code).

Cancellation of a loan agreement concluded without specifying a term is possible at any time. The party withdrawing from the contract is obliged to notify the other party of this one month in advance, unless the contract provides for a different notice period. If the loan agreement is concluded with an indication of its validity period, only the borrower has the right to withdraw from the agreement with such notice, unless otherwise provided by the loan agreement (Article 699 of the Civil Code).

For the reasons specified in Art. 698 of the Civil Code, early termination of a loan agreement concluded for a certain period is possible.

If the borrower continues to use the thing after the expiration of the contract in the absence of objections from the lender, the contract is considered renewed on the same conditions for an indefinite period (clause 2 of article 621, clause 2 of article 689 of the Civil Code).

Upon termination of the loan agreement, the borrower is obliged to return this thing. The thing is subject to return to the lender in the condition in which he received it for use, taking into account normal wear and tear, or in the condition stipulated by the loan agreement.

Author: Ivakin V.N.

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