Research On The Legal Risk And Control Of Lessors In Financial Leasing

Finance lease in China has been developed for more than 20 years ever since Chinese Reform and Opening.More and more commercial entities are fond of finance lease because of its characteristics of financing fund and properties.As a bond of legal relations among the parties,lessor is the most essential party in transaction of finance lease.However,due to the particularity of finance lease,lessor is often confronted with tremendous risks throughout the transaction.If risks like defects in the effectiveness of financial leasing contracts,defaults by transactional entities,and destruction of leased properties happen,legitimate rights of the lessor can hardly be protected.Although a legal system of finance lease has been roughly established in China,it still cannot meet requirements of growing needs of modern industry due to its systematical deficiency,especially a lack of regulations involving in protection of lessor's interests and risk control,which has prevented many lessors from stepping into finance lease,impeding the industry's proper development.This article firstly introduces the concept and characteristics of financial leasing briefly,in order to help readers understand the basic model of finance lease.Then,it summarizes the status of legislation by sorting out various phenomena of risks confronted by the lessor,including rights of property and debts,and reasons behind the risks hereto is to be analyzed.Finally,the article brings improving suggestions based on laws and regulations in existence,trying to control the risks confronted by the lessor within transaction of finance lease.