Concerning the subject of the Lease Agreement, a Lease Contract is often equated and compared to a Tenancy Agreement. The confusion regarding the rights and obligations arising from these two seemingly similar contracts (Lease and Tenancy) stems from the fact that the User’s right in the Lease Agreement is a genuine temporary real right, not a right of use, as is the case in tenancy.

Specifically, leasing is a distinctive form of tenancy, with its own special regulations in Government Ordinance no. 51/1997; therefore, the provisions of the Civil Code regarding the Tenancy Agreement do not apply to Lease Contracts but at most complement them.

Through the Lease Contract, one party, referred to as the lessor/financier, conveys the right to use a good owned by them to the other party, referred to as the lessee/user, for a specified period. At the lessee’s request, against a periodic payment known as the leasing rate, the lessor/financier agrees, at the end of the lease period, to respect the lessee/user’s option to purchase the asset, extend the lease without changing its nature, or terminate the contractual relationship.

Therefore, the financier’s primary obligation is to transfer to the user, under the lease contract, the rights arising from the contract, excluding the right of disposition. Consequently, the transfer of the right to use takes place immediately.

On the other hand, the obligations of the user are expressly listed in Article 10 of Government Ordinance no. 51/1997, including the following:

a) The user undertakes to bear maintenance expenses and any other costs related to the asset or the lease contract.

b) The user undertakes to pay all amounts due under the lease contract—leasing rates, insurance, taxes—at the amounts and deadlines specified in the contract.

c) The user undertakes to assume, for the entire contract period, in the absence of a contrary stipulation, all obligations arising from the direct use of the asset or through its agents, including the risk of loss, destruction, or damage to the used asset due to fortuitous causes, and the continuity of lease rate payments until the full payment of the lease contract value.

Thus, in reality, the legislator has regulated a special norm regarding the risk of the asset. According to this norm, since the lessor has fulfilled their obligation to transfer the rights arising from the Lease Contract (the right to use), the obligation to pay the rates is to be maintained regardless of whether the asset has perished, been destroyed, or damaged (including due to fortuitous causes). Additionally, it can be observed that the user assumes all obligations arising from the use of the asset for the entire contractual period.

This solution is justified by the fact that the financier has already fulfilled their correlative obligation to transfer the rights arising from the sale. Therefore, it can be considered that the risk is borne by the user as the holder of the real right to use the asset and the right of option.

These aspects have been underscored in legal doctrine. Specifically, it has been considered that upon the acquisition of the asset, the financier acquires the right of ownership over the asset, encompassing its three prerogatives (right of disposition, possession, and use).

As a result of the Lease Contract between the financier and the user, a series of successive and dependent effects occur at the time of the conclusion of the sales contract. These effects stem from the fact that leasing is a credit secured by the right of disposition over the assets left to the user or a credit operation where the right of disposition serves as a real guarantee.

As a result, on the one hand, the financier exclusively acquires the right of disposition, while the user acquires all other rights stemming from the sales contract. Thus, “the right of ownership is dismembered following the conclusion of the Lease Contract, with the financier retaining only the prerogative of disposition over the asset.”

In conclusion, the prerogatives of the right of ownership (possession, use, disposition) are transferred to the financier following the conclusion of the sales contract, and under the lease contract, all prerogatives of the right of ownership and all rights accompanying ownership are transferred, except for disposition. It is unequivocally evident that in the case of the Lease Contract, the risk (including the loss of the asset) is borne by the holder (the user) who exercises rights over them (possession and use), as the financier has fulfilled their obligations arising from the Lease Contract.

Author: Atty. Ionut Sfetcu