What happens after the leasing installment is not paid on time?
Maintaining liquidity, especially for small businesses, is a very difficult task. When there are problems related to the lack of it, it may turn out that in a given period the entrepreneur does not have enough money to settle current liabilities, including, for example, leasing installments. Of course, such a situation has certain consequences for the owner of the company, such as charging penalty interest or even termination of the contract by the contractor. Check what happens after the leasing installment is not paid!
The basic obligation resulting from the leasing contract
Leasing is an agreement under which the financing party (lessor) transfers to the user (lessee) the right to use a specific leased object for a fixed period of time. In return, the user regularly pays a certain amount to the leasing company's account, called the leasing installment.
The leasing contract may be of one of its two basic types - financial (the subject of the contract is a fixed asset of the user who makes depreciation write-offs) or operating (the subject of the contract remains in the fixed assets of the leasing company throughout the duration of the contract). Regardless of the type of financing of the leasing contract, timely payment of installments for the leased item is the basic obligation of the user. The consequences of not settling the obligations on time are specified in the leasing contract and in the law.
First, the leasing company will set an additional date
In a situation where the entrepreneur does not pay the leasing installment on time, the leasing company cannot terminate the contract immediately. It is obliged to set an additional time limit in writing to settle the arrears (it may not be shorter than 7 days). It often happens that he is appointed while signing the contract. In this case, the user is aware of the time at which he should pay the overdue installment and when the termination will take place.
Penalty interest is added to the amount in arrears, the value of which may not exceed four times the rate of the Lombard loan.
If payment is not made within the additional period, the leasing company has the right to terminate the leasing contract with immediate effect.
Termination of the lease agreement
If the installment is not paid within the additional period, the leasing company terminates the contract. This will not happen if, for example, the user informs in advance about the delay in the payment of receivables and if such events are incidental.
In the case of financial leasing, the termination of the contract requires the user to pay all the installments provided for in the contract, but unpaid (reduced by the benefits that the customer obtained in connection with paying off the vehicle before the agreed date) and returning the leased object to the leasing company. On the other hand, the termination of the operating lease agreement due to non-payment of installments obliges the user to pay the percentage of installments remaining until the end of the agreement.
The provisions of the leasing contract are not worse than in the regulations
At this point, it is worth noting that the provisions of the leasing contract may not be less favorable for the lessee than the provisions of the Civil Code (hereinafter: the Civil Code). In such a situation, all provisions that create a worse situation for the user are invalid in the light of the law.
K.c. it indicates, for example, the aforementioned obligation to set an additional date for payment of the outstanding lease installment and the need to inform the lessee of this fact in writing. However, the Act does not prohibit the contract from including provisions more favorable to the user, such as setting a notice period or indicating that it will only take place after the untimely payment of two or three installments.