A sharp increase in the key rate of the Bank of Russia led to an increase in leasing payments tied to it. According to the Ministry of Economic Development, the cost of leasing payments for taxi companies, car sharing, cargo carriers and agricultural producers increased from 8% to 39%. In order to stabilize the leasing industry, the Government of the Russian Federation developed and submitted to the State Duma of the Russian Federation a draft federal law “On Amendments to Article 38.1 of the Federal Law “On Financial Lease (Leasing)”.

Main content of the draft law

The draft law provides for the right of the lessee, in the event of an increase in the amount of leasing payments, to apply to the lessor with a request to transfer
ownership of the leased asset in whole or in part without the application of a penalty (fine, forfeit), other financial sanctions, as well as other measures of liability in connection with such a transfer.

In essence, the draft law gives lessees the right to early redemption of the leased asset, if such a right is not provided for by the agreement, or on terms other than those agreed by the parties in the agreement. In particular, if in connection with the early redemption of the leased asset, the agreement provides for the application of a penalty or other financial sanctions, the draft law blocks such terms of the agreement.

Conditions for the emergence of the right to early redemption of the leased asset

The right to early redemption of the leased asset shall arise for the lessee if the following conditions are met:

  • the leasing agreement was concluded before March 01, 2022;
  • the amount of leasing payments increased in the period from March 01 to December 31, 2022;
  • the leasing agreement or other agreement of the parties provides for the conditions for the transfer of the leased asset to the ownership of the lessee.

Term for exercising the right to early redemption of the leased asset

The right of the lessee to the transfer of the leased asset into its ownership by the lessor may be exercised at any time before the expiration of the leasing agreement, subject to applying to the lessor with a request before December 31, 2022.

Scope of the right to early redemption of the leased asset

The lessee shall have the right to apply to the lessor with a request to transfer the ownership of the leased asset to it in whole or in part.

It seems that the partial redemption of the leased asset by the lessee is possible only in the case when the leased asset represents several independent things. The lessee may not demand the transfer to it of a component of an indivisible thing (Article 133 of the Civil Code of the Russian Federation) or one of the things that are connected by a complex thing mode (Article 134 of the Civil Code of the Russian Federation) or the mode of the main thing and assets (Article 135 of the Civil Code of the Russian Federation).

Determination of the redemption price

The draft law does not define the rules for calculating the redemption price of the leased asset, limiting itself to indicating that the redemption price shall be determined in accordance with the leasing agreement.

However, as follows from the provisions of Clause 1, Article 28 of the Federal Law dated October 29, 1998 “On Financial Lease (Leasing)”, the redemption price of the leased asset may be included in the lease payments and not be allocated separately in the agreement. Moreover, according to the legal position of the Presidium of the Supreme Court of the Russian Federation, leasing payments may not be divided into a fee for the use of the leased asset and its redemption value (Clause 1 of the Review of Judicial Practice on Disputes Related to a Financial Lease (Leasing) Agreement, approved by the Presidium of the Supreme Court of the Russian Federation on October 27, 2021).

Thus, the redemption price may not always be determined on the basis of the terms of the leasing agreement.

Also, the question of determining the redemption price remains open in cases where the leasing agreement does not provide for the transfer of ownership at all or the redemption price of the leased asset specified in the agreement is so much less than its market value at the time of redemption that it is symbolic (Resolution No. 17 of the Plenum of the Supreme Arbitration Court of the Russian Federation dated March 14, 2014 “On Certain Issues Related to a Redemption Leasing Agreement”).

Lessor’s remuneration for early redemption of the leased asset

If the leasing agreement provides for remuneration to the lessor for the early transfer of ownership of the leased asset to the lessee, the amount of such remuneration may not exceed 1% of the redemption price of the leased asset, determined as of the date the lessee sends the claim.

Obligations of the lessor upon receipt of a claim for early redemption of the leased asset

The lessor, who has received a claim from the lessee for early redemption of the leased asset, shall:

  • consider the lessee’s claim and determine the redemption price as of the date the lessee submits such claim;
  • inform the lessee of the redemption price for the leased asset by sending it a notice in the manner provided for by the leasing agreement, and if the method is not specified by the leasing agreement, by sending a notice by registered mail with acknowledgement of receipt or by delivering a notice against signature.

Term for fulfilling the obligations of the lessor

The term for the lessor to fulfill the obligation to inform the lessee of the redemption price shall be 10 business days and shall be calculated from the date the lessee sends the claim. It shall be noted that this provision of the draft law contradicts the general rule that legally significant messages entail civil law consequences for the addressee from the moment the corresponding message is delivered to it or its representative (Clause 1, Article 165.1 of the Civil Code of the Russian Federation).

According to the draft law, within the specified period, delivery of a notice of the redemption price to the lessee shall also be ensured.

Thus, the specified 10-day period includes:

  • the period of delivery to the lessor of the claim for early redemption of the leased asset;
  • consideration by the lessor of the claim for early redemption of the leased asset;
  • sending a notice of the redemption price to the lessee;
  • the period of delivery to the lessee of the notice of the redemption price.

Consequences of violation by the lessor of the deadline for reporting the redemption price

If the lessee does not receive a notice from the lessor within 10 business days after the date of sending the claim, the accrual of leasing payments by the lessor and their payment by the lessee shall be terminated from the date the lessee sends the claim to the lessor until the date the lessee receives a notice from the lessor.

Deadline for payment by the lessee of the redemption price

The lessee who has received a notice from the lessor of the redemption price for the leased asset shall transfer to the lessor the redemption price of the leased asset specified in the notice within 5 business days from the date of receipt of such notice.

Consequences of violation by the lessee of the deadline for payment of the redemption price

If the lessee fails to transfer to the lessor the redemption price of the leased asset specified in the notice within 5 business days from the date the lessee receives such notice, the accrual of leasing payments by the lessor and their payment by the lessee shall be resumed in accordance with the leasing agreement from the date of sending the claim by the lessee.

The resumption of accrual and payment of leasing payments, in fact, shall mean the return of relations between the parties to the previous state that existed before the date the lessee sent a claim for early redemption of the leased asset.

Transfer of the leased asset into the ownership of the lessee

The lessor shall transfer the ownership of the leased asset to the lessee, as well as documents and accessories related to it, within 5 business days from the date of transfer by the lessee to the lessor of the redemption price for the leased asset, specified in the notice.

If the lessor violates this obligation, the right of ownership to the leased asset shall pass to the lessee on the fifth business day from the date the lessee transfers the redemption price for the leased asset specified in the notice to the lessor.

Entry into force of new rules on early redemption of a leased asset

It is planned that the amendments will come into force from the day they are officially published in the form of a federal law.