Study Of Finance Lease The Ownership Of The Leased Property

Definition of leasehold property in financial lease is one of the basic problems inlegislation on financial lease. It is relevant to many points, such as definition in rightsor obligations of each party, risk and relevant responsibility, right protection andremedies under special circumstance.Exact definition of lease property in financial lease comes from distinguishingits essential and legal characters well. Financical lease is a new transaction form,absolutely separating from traditional types. It covers trade, guarantee and lease,differing from retention of ownership and normal leasehold. Its particularity bringsmany different theories on defining the character of financial lease. The authorsupports the theory that it belongs to one of independent transactions.Corresponding to different explanations on legal character of financial lease,there are different opinions on character of leasor's ownership to lease property.Scholars, who hold the theory of ownership retention, consider the right that leasorhas in financial lease to lease property is based on retention of ownership. Scholars,who hold the theory of currency loan contact, consider the right that the leasor has infinancial leasing to lease property is based on cession guarantee. Some scholars whohave the theory of chattel guarantee support the former opinion and some support thelater. Scholars who hold the theory of lease contract consider the right that the leasorhas in financial lease to lease property is t same as normal lease.The author thinks financial lease is an independent transaction. The right that theleasor has in financial lease to lease property is a factual ownership, which is based onneither ownership retention nor cession guarantee. This kind of ownership is aweakened ownership, which is different from the right under normal lease.First of all, the ownership that leasor has to lease property is factual. The leasor'sownership is a precondition to obtain corresponding advantages and rights, and is alsoa foundation that establishes legal relation among/between parties and confirms theirright & liability. Only defined the leasor's right in financial leasing as a factualownership, we can comprehend the dualism of financing and leasing. So that we havethe possibility to understand the limitation in using tenant right and the leasors'remedy, when tenant breach the contract.Second, distinguishing with normal ownership, the ownership is weakenedobviously in financial leasing. In financial leasing, the declined ownership is the resultof disintegrating, and the form of financial leasing emphasizes this kind of declining.As far as financial leasing is concerned, the ownership to leasehold is just leasor'smethod but not intention. The function of this ownership mostly is as the foundationof credit's rights of rent and guarantees this credit to be realization. From theoperation point of view, leasor has a passive title all along, meanwhile the right ofdisposition and the right of restoration are limited.In financial leasing, the declining of ownership is mainly performed by therelationship of rights an obligations between leasor and leaser: (1) within leasehold,risk of accident damage is responded by leaser, differing from traditional rule thatresponded by owner;(2) guarantee responsibility to quality separate from ownership;(3) leasehold ownership separate from the right of claim for compensation to seller;(4)ownership of leasor separate from liability of tort to third party;(5) obligations ofinsuring, repair, and maintenance that the owner of lease have has been remitted inmajority;(6) under the lease leasor only has the right to operate credit's right of rent.Analysis in ownership of leasehold in financial leasing is important to ourlegislation. Only realizing the special character of leasehold ownership in financialleasing at the time of establishing ownership that leasor has can master therelationship of right and obligation between leasor and leaser exactly. Consideringarticles of our contract law, we think, current effective contract law need to beperfected in the following aspects: (1) current effective contract law says nothing tohow to take the risk of leasehold ownership;(2) current effective law treats the rightof claim for damages just as a kind of conventional right;(3) current effective law hasno obvious article endow leaser with the right of claim for damage under thecondition of being infringing by third party;(4) current contract law has no rule toinhibit leasor from transferring his lease to others in leasehold;(5) current contractlaw says nothing to how to handle lease under the circumstance of leaser's bankrupt;(6) current contract law has no rules in protecting leasor's ownership when leaseholdchanged. The author suggests to perfect these blemishes in new legislation to financialleasing.