Affordable housing is undoubtedly the C-suite of the current housing rental market. The intensive introduction of a series of policies from the central to the local level has put affordable rental housing on the fast track to development.
The development of the rental market cannot be separated from financial support. For practitioners, it is important to clarify the main financing channels for protected housing and their respective attributes.
McDonald's Space Leasing is now combing the main housing lease financing channels (infrastructure REITs, REITs, corporate bonds) and representative cases as follows:
Infrastructure REITs
REITs (Real Estate Investment Trusts) - Real Estate Trust Investment funds are standardized financial products with real estate as the underlying asset.
On June 29, 2021, the National Development and Reform Commission (NDRC) issued the Notice on Further Improving the Pilot Work of Real Estate Investment Trusts (REITs) in the Infrastructure Sector No. (NDRC Investment [2021] No. 958), which formally included the guaranteed rental housing in the industry scope of infrastructure REITs issuance.
Previously, the infrastructure REITs pilot prioritized the support of infrastructure short board projects, and encourage new infrastructure projects pilot. Mainly include:
1. Warehousing and logistics projects.
2. Toll roads, railroads, airports and ports projects.
3. Municipal sewage and garbage treatment and resource utilization, solid waste hazardous waste medical waste treatment, bulk solid waste comprehensive utilization projects.
4. Urban water supply, power supply, gas supply and heating projects.
5. Data center, artificial intelligence and intelligent computing center projects.
6. 5G, communication tower, Internet of Things, industrial Internet, broadband network, cable TV network projects.
7. Smart transportation, smart energy and smart city projects.
8. Encourage national strategic emerging industry clusters, high-tech industrial parks and special industrial parks to carry out pilot projects.
Representative Case 1
Shenzhen Talent Anzhu Group REITs Project
According to the relevant person in charge of Shenzhen Talent Housing Group Limited, the underlying assets of the project are located in the core area or section of Shenzhen City, four projects, all of which have been certified as guaranteed rental housing, with an overall occupancy rate of 99%, involving 1,830 sets of guaranteed rental housing. The building area is 134,700 square meters, and the appraised asset value is about RMB 1.158 billion. The projects have clear property rights, sustained and stable cash flow, and are able to meet the yield requirements for the issuance of REITs.
According to the relevant person in charge, "the pilot REITs for guaranteed rental housing in Beijing, Shanghai, Chongqing and other places are advancing. It is expected that more protective rental housing REITs will appear in the future, and the regulatory authorities will continue to accelerate the review and standardization process and improve the relevant supporting policies in the pilot process, to promote the construction of the protective rental housing REITs market, and to establish a new model for the development of the protective rental housing system."
Like real estate investment trusts
There are no strict domestic laws and regulations related to REITs, and the products issued in the market now are partially in line with the REITs standards of mature foreign markets, and are therefore called REITs-like products.
Representative Case 2
State-Beijing Guaranteed Housing Center Public Rental Housing Asset Support Special Plan
On August 18, 2021, China's first public rental housing REITs product - "State Development Bank-Beijing Guaranteed Housing Center Public Rental Housing Asset Support Special Plan. Asset Support Special Plan" (hereinafter referred to as the Special Plan) was successfully issued, opening a new chapter in public rental housing REITs.
State Development Bank and Beijing Financial Holding Group are the unified coordinators of the "State Development Bank-Beijing Guaranteed Housing Center Public*** Rental Housing Asset Support Special Plan". China Development Bank and Beijing Financial Holding Group are the manager and lead underwriter of the special plan, Beijing Housing Center is the asset service provider of the special plan, and Capital Investment Guiding Fund is the fund manager. The underlying assets are public rental housing held by Beijing Guaranteed Housing Center. The special plan has a AAA rating for the preferred securities, a term of 18 years, and an issue size of 400 million yuan.
As the first public rental housing REITs product in China, the special program has received careful guidance from the Securities and Futures Commission, SSE and other competent authorities, as well as great attention and strong support from the Beijing Municipal Government and units at all levels. It has found a way out for the various links involved in the financing of public rental housing assets, and made a useful exploration for legal compliance
The special plan has many innovative features: the innovative use of REITs as a financing tool in a market-oriented way effectively revitalizes the stock of public rental housing assets, and improves the ability of public rental housing to rely on its own cash flow for financing; the appraisal value of the assets determines the financing scale of public rental housing, and improves the ability of public rental housing to rely on its own cash flow for financing. The appraisal value of the assets determines the financing scale of public rental housing, which increases the space for public rental housing assets to rely on their own value for financing; the product structure of interest-only and non-principal repayment reduces the debt-servicing pressure of public rental housing enterprises.
REITs financing improves the financing ability of public rental housing enterprises, strengthens the support for the housing of low- and middle-income families, and has important guidance and demonstrative significance for expanding the financing channels of guaranteed housing projects, promoting the healthy and sustained development of the housing rental market, and establishing a housing system of "multi-principal supply, multi-channel guarantee, and rental and purchase". It is of great significance to guide and demonstrate the development of the housing system.
Corporate bonds
Corporate bonds refer to borrowing certificates issued by a joint-stock company with additional capital within a certain period of time. Compared with the indirect financing method of bank loans, corporate bonds, as a kind of direct financing in the capital market, have certain cost advantages.
According to the incomplete statistics of McDot, in 2021, 16 special corporate bonds for housing leasing*** were issued, with a cumulative issuance amount of 37.262 billion yuan. The vast majority of issuers are real estate enterprises, including Vanke, China Resources, Poly and other big-headed real estate enterprises.
Representative Case 3
Beijing Capital Venture Group 500 million yuan housing leasing special corporate bonds
On April 15 this year, Beijing Capital Venture Group Co. Ltd. announced that it had successfully issued 2023 public offering of special corporate bonds for housing leasing (for professional investors) (the second phase).
In particular, the principal amount of the bonds is 500 million yuan, with a coupon rate of 3.18 percent and a term of three years.
Representative Case 4
Beijing Affordable Housing Center Co.
The company's 1.5 billion yuan corporate bonds
Beijing Guaranteed Housing Center Co. has also recently issued corporate bonds publicly.
It is reported that the issue size of the bonds will not exceed 1.5 billion yuan (including 1.5 billion yuan), with a coupon rate of 3.09 percent.
According to the prospectus, the bonds issued by Beijing Municipal Housing Center for professional investors will have a maturity of not more than 25 years (including 25 years), and the bonds will be fixed-rate bonds, with a coupon rate to be determined by negotiation between the issuer and the main underwriter based on the results of the offline inquiry and book-entry. The interest payment method is simple interest, the frequency of interest payment is annual, and the principal of the bonds will be repaid in one lump sum upon maturity.
The funds raised by the Beijing Municipal Housing Center from the bond issue will be used for repayment of maturing debts, supplemental working capital, project construction and operation, and other purposes permitted by applicable laws and regulations.
To vigorously develop guaranteed rental housing, financial support will surely be one of the issues that market players need to urgently address.
In July 2021, the State Council issued the Opinions on Accelerating the Development of Guaranteed Rental Housing (Guo Ban Fa [2021] No. 22), which explicitly proposed to further strengthen the financial support for guaranteed rental housing projects, support for long-term bank loans, and support for leasing enterprises to issue corporate bonds, corporate bonds, non-financial enterprise debt financing instruments and other corporate credit bonds. At the same time, the state and local governments have successively included guaranteed rental housing in the pilot scope of REITs.
In the future, as the pilot REITs continue to advance, market-oriented rental housing is also expected to be included in the scope of REITs, which will become another blue ocean for China's REITs.
At present, the housing leasing enterprises urgently need to do is to play the advantages of the market subject, strengthen the operation ability, broaden the financing channels, and wait for the policy east wind.
Related Q&A: equipment financing leasing 10 million dollars is what it means? 1. Finance leasing refers to: selected by the enterprise equipment we buy equipment according to the enterprise's choice after the purchase of equipment, the equipment will be leased directly to the enterprise enterprise on a regular basis to repay the lessor equipment rent rent repayment is completed, the ownership of the equipment will be transferred to the enterprise 2. For example, I have to spend $ 10 million to buy equipment, go to the bank to borrow to obtain credit, first of all, you need a collateral or pledge, a single repayment program, and take up a personal or corporate Credit line, meaning that I borrowed the 10 million, if I still need funds for development may be refused because the bank will assess my repayment ability, and there are such and such conditions, and so on. And this 10 million borrowing, the repayment of a single form of cash flow pressure on emerging enterprises will become larger. 3. First, financial leasing for off-balance sheet business, will not affect other financial lending, to put it bluntly, will not be on the credit; the second, the financial leasing equipment cost is lower, the longer the pressure is less, the threshold is lower than the bank; third, the repayment of the free, high flexibility, are debt, but the flexibility of the large margins. Related Q&A: What is financial leasing?In the process of participating in the financial leasing business, many lessors are faced with the situation that the rent can not be collected, and the leased property can not be retrieved or disposed of, thus suffering great losses. In order to have a clearer and more explicit understanding of the legal risks embedded in the financial leasing project and to better cope with the risks, the author, by inquiring about the professional books and materials related to financial leasing, combined with the more typical situations found in the process of actually handling the cases of financial leasing project, in accordance with the three stages of the financial leasing contract before the signing, in the course of fulfillment, and after the occurrence of disputes, the relevant risks for the lessor in financial leasing project are sorted out and summarized, and a proposal is put forward for the lessor. Risks of the lessor in the financial leasing project in accordance with the three stages before the signing of the financial leasing contract, during the performance, after the dispute, the lessor to organize and summarize, and put forward the risk prevention recommendations, I hope to provide some reference to the relevant people.
I. Common Legal Risks of Lessors in China's Financial Leasing Business
1. Common Risks before Signing of Financial Leasing Contract
1. Lessees Provide False Materials, Leading to Misunderstanding of Lessors
In order to gain the lessor's trust and obtain the financing money, some lessees may provide false qualification certificates, financial information, and asset certificates to cope with the lessor's investigation on them, and the lessor may also provide the lessor with false information about their assets, and the lessor may also provide them with false documents. The lessor's investigation of the lessee, and even the existence of some lessees fictitious projects, provide false contracts and invoices and other materials in order to fraudulent financing payments, and some of the materials are not easy to distinguish between the real and the fake. Based on the false materials provided by the lessee, the lessor is likely to have a wrong understanding of the project, economic strength or qualification of the lessee for which it is applying for financial leasing, and thus passes the application for the project and issues the financing payment, resulting in a series of subsequent risks.
2. The lessor does not pay enough attention to the risk, resulting in the selection of the lessee does not have the appropriate qualifications and capabilities
Some lessors do not pay enough attention to the risk, and do not establish a perfect credit review and risk management mechanism within the unit, focusing on the quantity of the project but ignoring the quality, not reviewing the credit in depth or "formalism", neglecting to assess the quality of the project, or not reviewing the credit in detail, or neglecting to assess the quality of the project. There are situations such as only focusing on the quantity of projects but neglecting the quality, in-depth review of creditworthiness or "formalism", neglecting to review and judge the financial status and solvency of the lessee, etc., whereas the business personnel usually try every means to facilitate the transaction of the project in order to pursue the sales performance. This neglect of risk leads to business cooperation with lessees of varying creditworthiness and ability, and even some lessees do not have the ability to fulfill their debts and operate well, increasing the chances of "bad debt" and other financing risks.
3, the lack of financial lease contract elements, resulting in leasing and leasing relationship is flawed [1]
In the process of financial leasing contract, due to the lack of legal knowledge of some of the lessor or internal supervision of the enterprise is not standardized, it may happen that there is only a financial leasing contract but not the lease purchase and sale of leased property, the lease purchase and sale of leased property did not fulfill the contract, lease purchase and sale of leased property contract of the object in the financial leasing contract is not clearly stated in the contract, and the lease contract is not clearly stated in the contract. The subject matter of the leasing contract is not clearly stated in the financial leasing contract, and the rent is not clearly agreed upon, etc., which leads to the legal relationship of the financial leasing contract may be recognized as "the name of financial leasing is actually a loan". Once the financial leasing contract is recognized as a loan contract, there are more obvious adverse effects on the lessor: first of all, the lessee does not have to pay rent to the lessor, but only need to repay the purchase of leased goods and interest, and interest may be agreed upon by the original commission, interest, overdue interest, etc., if the interest is more than the statutory percentage of the total calculation of the interest, then the excess part of the protection will not be so that Calculated interest is usually less than the proceeds calculated according to the financial leasing business [2]; Secondly, the ownership of the leased property will belong to the lessee, do not have to return to the lessor, at this time can not be leased to protect the lessor's claim; Again, for the financial leasing claim to set up a security measure, due to the different legal relationship of the main contract, there is the risk of being recognized as ineffective, and so on. In this way, not only contrary to the original intention of the financial lease contract, but also may cause greater losses to the lessor.
(Pictures quoted from the network)
2 common risks in the performance of financial leasing contract
1, the lessee does not pay rent according to the contract agreement
This is the most common financial leasing project is also the most influential legal risk, due to the financial leasing project of the rent payment cycle is usually longer, and some of the projects will be subject to the national or local policy influence, the lessee will not pay rent according to the contract agreement
The lessee will not pay rent according to the contract agreement
The lessee will not pay rent according to the contract agreement. Due to the long rental payment cycle of financial leasing projects and the impact of national or local policies on the establishment and operation of some projects, it is not uncommon for lessees to delay or fail to continue to pay rent in the course of project operation for various reasons. For example: the income of photovoltaic power generation projects depends to a large extent on state subsidies, but in practice, there are cases in which the subsidies payable are in arrears, resulting in the lessee being unable to pay the corresponding rents in full; infrastructure projects may be delayed or unable to be completed due to factors such as weather and policies; and the income of production projects may be significantly affected by the market, resulting in lower than expected income, etc. All these may result in the lessee being unable to pay the rents in full. All of these will lead to the lessee being unable to pay the rent in full and on time as agreed in the financial leasing contract, or even difficulties in subsequent operation, hindering the whole project.
In addition, the financial leasing contract usually stipulates that if the lessee fails to pay the rent, the lessee will be liable for the late interest or penalty, and the calculation standard of the late interest or penalty is usually much higher than the normal performance interest originally agreed upon. Then, if the lessee is unable to pay rent due to a continuous shortage of funds, once overdue, the shortage of funds may continue to widen and the ability to pay rent may be further reduced.
2, the lessee does not properly custody of the leased property caused by the destruction or loss of the leased property
In the financial leasing project, the ownership of the leased property belongs to the lessor, but the actual possession and use of the leased property is the lessee [3], the lessor of the leased property management has certain difficulties. If the lessee does not fulfill the obligation of proper custody [4], caused by the destruction or loss of the leased property, even if the lessor can still require the lessee to pay rent [5], but this situation will certainly damage the lessor's ownership of the leased property, so that the lessor to reduce or lose the protection of its claims through the leased property, is very likely to result in economic loss. Moreover, the leased property no longer exists, for the occurrence of disputes when the financial leasing relationship is established may also cause certain obstacles, exacerbating the lessor's risk.
3, the lessee unauthorized disposal of leased property
Given the financial leasing project in the ownership of leased property and the right to use the separation, although the lessor enjoys the ownership of the leased property, but the leased property of the lessee to enjoy the possession, use and income, the management of the lessee is also responsible for the lessee, that is, the leased property actually in the lessee under the control of the lessee. Although the law prohibits the lessee from disposing of the leased property without authorization, it is difficult for the lessor to ensure that the lessee will definitely not engage in acts such as selling, subletting, or mortgaging the lease, etc., and once the above acts occur, even though the Civil Code sets up remedies for the lessor[6], the lessor's ownership right of the leased property may still be infringed upon-especially in the event of a In the case of unauthorized transfer of the leased property by the lessee, if the leased property is acquired by a third party in good faith, it will lead to the lessor's complete loss of ownership of the leased property, and even if it is possible to recover the compensation from the lessee, it will also consume a lot of additional energy and financial resources, plus if the lessee is unable to compensate, it will further cause greater losses to the lessor.
4. The lessee does not deposit the fees collected into the supervisory account according to the agreement (take the power station project as an example)
In the financial leasing project where the lessee obtains the income by means of fees, the lessor usually agrees to set up a supervisory account with the lessee for storing the financing money and fees collected by the lessee, so as to safeguard the lessor's claim. In the case of a power station project, for example, the regulatory account is used to store the electricity charges collected by the lessee, and the lessor will require the lessee to pledge the right to collect electricity charges to the lessor and pay the income from the sale of electricity to the regulatory account. However, in practice, it is not uncommon for the lessee not to fulfill this obligation and to adopt various methods (e.g., requesting the electricity user to pay the electricity charges to other accounts, paying the lessee through cash or bills, etc.) to avoid the electricity charges from entering into the supervisory account, and even the supervisory account of some projects has no income from the electricity charges at any time, so that the pledge becomes a "piece of paper! "
Practice
In practice, the realization of the property value of the right to charge for electricity depends more on the financial ability and willingness to perform of the party who should pay the electricity bill. In the legal relationship between the power generating enterprise and the power grid operating enterprise or the power user's supply of electricity, if the electricity bill is not paid on time and in full, due to the relativity of the contract, it is difficult for the lessor to make a demand directly on the lessee's debtor, i.e., the actual purchaser of the electricity. If the party paying the electricity bill does not pay the electricity bill to the regulatory account, but settles privately with the lessee in other ways, and the lessee does not take the initiative to inform and fulfill the agreement to deposit the electricity bill into the regulatory account, it is difficult for the lessor to realize the corresponding rights, and it is even difficult to know about it.
5. Assets of the lessee and the supervisory account are seized and frozen by the court due to other cases
In the event of a dispute between the lessee and a third party, the court may seize the leased goods under the financial lease and the supervisory account as the assets of the lessee due to other cases. Although the lessor may at this time seek relief by applying to the court for reconsideration or execution objection, the time limit and the result of the response from the court accepting the reconsideration or execution objection are unpredictable, and there is a great deal of uncertainty. Moreover, if the lessor is not aware of the seizure and the lessee does not take the initiative to inform, it is likely that the leased property will be disposed of and the claim will not be safeguarded through the supervisory account.
3 Common risks after the dispute
1, the difficulty of criminal case
If the lessor believes that a financial leasing project dispute is suspected of a criminal offense (mostly contract fraud), due to the fact that most of the criminal cases related to financial leasing have criminal-civilian intersection characteristics, the public security organs tend to tell the victims to go through the civil litigation when accepting the case report. way for relief. Even if the clues and evidence that the case constitutes a crime are complete and obvious, the public security authorities may refuse to accept the case for various reasons (possibly for the purpose of preventing wrongful interference in economic activities or other considerations), therefore, if a suspected contract fraud crime or the like occurs in a project of financial leasing, it is more difficult to pursue the criminal liability of the lessee through the public security authorities.
2, the lessee to provide security is difficult to effectively compensate for the loss
Financial leasing projects, the lessor will usually require the lessee to provide certain guarantees, in order to minimize the lessee's default to the lessor's losses, such as setting up a guarantor, the establishment of a mortgage, equity pledge and so on. However, in practice, when the lessee defaults, the security measures are often unable to compensate for the lessor's losses. For example, the natural person guarantor usually guarantees the ability is very weak, can bear the responsibility is very small; The legal person guarantor usually and the lessee has the related relationship, the lessee has the risk, the guarantor's guarantee ability is often insufficient; The collateral is mostly in the lessee's control, if the mortgagee refuses to fulfill the obligation or the collateral is destroyed or lost, the lessor is difficult to make up for their losses by exercising the mortgage; Equity pledge is usually the lessee's default, set up a mortgage, equity pledge and so on. Pledge is usually the lessee's shareholders will be held by the lessee's equity pledged to the lessor, but when the lessee's business difficulties or shortfalls in funds, the value of its equity will be reduced or even worthless, and the equity is difficult to realize, it is difficult to make up for the lessor's losses.
Real estate, as a more stable and clear ownership of property, is one of the more common property used for security, but also the most secure security property, but there are certain problems in practice, the author has met the following situations: (1) in order to make the lessor think that the value of real estate is sufficient to guarantee the claims of the financial leasing project, the lessee may provide valuation results of the higher valuation report as a In order to make the lessor believe that the value of the real estate is sufficient to secure the claim of the financial leasing project, the lessee may provide an appraisal report with a higher valuation result as a certificate to obtain the lessor's trust and achieve the purpose of financing. Since the lessor does not have the professional knowledge of valuation, and cannot well understand and predict the change rule of the price of the mortgaged real estate in the region, it is difficult to find out the problems, and can only rely on the conclusions of the appraisal report, and can only find out that the value of the mortgaged real estate may be far lower than the debt that should be borne by the lessee only in the case of disputes; (2) some of the real estates have been rented out to the third party before mortgaging, and the third party also has actual possession of the real estates. real estate is also in physical possession, and when disposing of the real estate, the third party may not cooperate with or even intentionally obstruct the disposal process, making it difficult to dispose of the real estate; (3) if the real estate is not realized by way of auction, and the claim can only be realized through in rem, the lessor may need to pay the compensation for the renovation of the lawful tenant in order to dispose of the real estate, and may need to advance the tax on behalf of the mortgagor in order to complete the transfer of ownership of the real estate, especially in the case of commercial real estate. Ownership of real property, especially commercial and industrial land, is subject to very high taxes, which adds another huge burden to the lessor whose claim is already not satisfied. In addition, some places have a limited purchase policy for real estate, and there is uncertainty as to whether the lessor will be able to accept the real estate against the debt if more than one real estate is entered into in rem at the same time.
II. Legal Risk Prevention Suggestions
1 Before signing the financial leasing contract
1, the establishment of a perfect project review mechanism, the lessee's basic information, credit, capacity, indebtedness, and the legitimacy and feasibility of the project to be financed itself to conduct a detailed investigation and assessment, and prudent decision-making, to reduce the risks caused by bad projects or bad lessees.
2. Enhance the examination and verification of the authenticity of the materials provided by the lessee, for example, by inquiring the invoice code, interviewing the lessee's management or partners, and requesting the lessee to issue relevant undertakings, etc., to ensure the authenticity of the materials as far as possible.
3. Ensure that the financial leasing contract has the legal elements, and at the same time, according to the problems reflected in the existing projects and cases, constantly add and improve the contents of the main contract and the supporting contract, so as to ensure that in case of disputes, the interests of creditors can be maximally safeguarded in accordance with the text of the contract.
4, strengthen the agreement on security measures, for example: if the project has a pledge of the right to charge, it is recommended to take effective measures to strengthen the monitoring of the right to charge, to ensure that the right to charge the right to charge the pledge can be successfully realized. Taking the electricity fee charging right as an example, it is possible to reduce the risk of not being able to monitor the electricity fee income by requiring the pledgee to provide a written undertaking issued by it and the actual power purchaser or by signing a tripartite agreement with the lessee (the pledgee) and the power purchaser at the same time as the establishment of the pledge of fee charging right - the main contents of the written undertaking or the tripartite agreement should at least include (1) the power purchaser is aware of the existence of the lessor's pledge of the right to charge electricity, the payment of the electricity revenue to the designated regulatory account and the lessor's right of priority in compensation in accordance with the law; (2) the power purchaser will comply with the agreement of the power purchase contract with the seller (i.e., the lessee), and will fully fulfill the obligation of purchasing electricity; (3) the purchaser guarantees that it will transfer the payable electricity fees to the seller's regulatory account in the designated bank; (4) in case of failure of the lessee to comply with the agreement, the lessee (the pledgee) and the purchaser will not be able to monitor the income from electricity charges. ) When the lessee fails to settle the debt, the electricity charges payable will be transferred directly to the account designated by the lessor according to the lessor's notice; (5) If the power purchaser violates the commitment or agreement, it shall bear certain default liability, etc.
2 In the course of the fulfillment of the financial leasing contract
1. Strengthening the supervision of the leased goods, establishing a perfect tracking mechanism for the leased goods, ensuring the existence of the leased goods and that the lessor always enjoys the ownership of all of the leased goods in the financial leasing project
The following methods can be considered: to be directly involved in the purchase and receipt of the leased goods in the direct leasing project in all the links, to ensure the leased goods are In the case of direct leasing projects, the following methods can be considered: directly participating in all aspects of the purchase and receipt of the leased property to ensure that the leased property is purchased, received and actually put into use in a timely manner; and in the case of sale-and-leaseback projects, ensuring that the leased property actually exists, that the lessee has the right to dispose of the leased property, and that the change of the ownership of the leased property is registered in a timely manner (if necessary) to ensure that ownership of the leased property is transferred to the lessor.
2. Adopt effective measures to indicate the ownership of the leased property and reduce the risk of the leased property being acquired by a third party in good faith
You can consider adopting such methods as marking the leased property in an obvious place, requesting the lessee to mortgage the leased property to the lessor and set up a mortgage registration in accordance with the law, setting up a remote camera to monitor the situation, setting up a GPS positioning and so on, so as to ensure that the lessor is able to grasp the situation of the leased property in the course of the project, and improve the lessee's ability to control the leased property. The lessor can effectively grasp the situation of the leased property during the operation of the project, increase the difficulty of unauthorized disposal of the leased property by the lessee, and reduce the risk of loss of ownership of the leased property by the lessor.
3. Improve the post-leasing management mechanism, adopt on-site inspection, timely and intuitive understanding, verification and feedback of the status of the lessee, the guarantor and the leased property/collateral
Leasing projects are generally medium- and long-term projects, so it is very important to have a timely grasp of the status of the project and the lessee, and good post-leasing management can be an effective early warning of the risk of the work, improve the quality of the leased assets and Safeguard the security of leased assets. The lessor can take regular or irregular ways to conduct on-site inspection of the lessee, focusing on the lessee's operation and financial situation, the use of the leased property, the guarantor's operation and financial situation, as well as the situation of the collaterals and pledges, and the contents of the inspection and the situation found in the inspection process are recorded in detail and properly retained, signed by the inspector (preferably the inspected party can sign and stamp), and finally the inspection situation is summarized and analyzed. Eventually, the inspection situation will be summarized and analyzed. In this way, not only can we evaluate whether the tenant is in breach of contract or the possibility of breach of contract in a timely manner, but also for future disputes that may arise to retain favorable evidence.
Third, after the occurrence of the risk of remedial measures
1 as soon as possible to communicate with the lessee and the guarantor and send a written document to claim their rights
After the discovery of the lessee default on the payment of rent or the possibility of default on the payment of rent, in order to avoid the expansion of the loss, the lessor should be as soon as possible to communicate with the lessee, to confirm the actual situation and the subsequent payment plan, and based on the actual situation to decide on the follow-up action. action. At the same time of communication, it is recommended to send written documents to the lessee and guarantor at the same time (company reminder letter or lawyer's letter, etc., pay attention to keep the proof of sending and delivery) to formally claim the realization of the claim, to remind and warn the lessee, and can also be used as a basis for later claiming rights.
2 Comprehensive collection of favorable evidence and information
After the lessee's default, regardless of whether it is due to the temporary shortage of funds or long-term financial chain breakage and lead to default, the lessor should be fully prepared to organize and analyze the materials related to the project, and in the later stage of the communication with the lessee and the guarantor to continue to collect evidence and information favorable to their own side, and at any time be ready to The preparation of the lawsuit.
3 Determine the litigation demand
Financial leasing projects usually use the form contract provided by the lessor, the contract will sometimes stipulate that when the lessee defaults, the lessor has the right to require the lessee to pay all the rent and terminate the contract and recover the leased property immediately. However, according to the Interpretation of the Supreme People's Court on Issues of Law Applicable to the Trial of Cases of Disputes over Financial Leasing Contracts (as amended in 2020), Article 10(1), "If the lessor requests both payment of all the unpaid rents stipulated in the contract and the termination of the financial leasing contract, the people's court shall inform it of its choices in accordance with the provisions of Article 752[7] of the Civil Code. "According to the provisions of Article 752 of the Civil Code, the lessor shall choose between "canceling the contract and getting back the leased goods" and "requiring the lessee to pay all the rent" when making the litigation request. Therefore, the lessor needs to weigh the advantages and disadvantages of the two choices of "cancelling the contract and getting back the leased property" and "requiring the lessee to pay all the rent", and choose the one that is most conducive to the realization of the rights.
4 Determination of the Trial Body with Jurisdiction
The financial lease contract usually stipulates that the court of jurisdiction is the people's court of the lessor's domicile, therefore, after determining the litigation claim, the court of jurisdiction can be determined according to the amount of the litigation claim.
5Timely filing of lawsuits and application for property preservation
Most of the financial leasing dispute cases are caused by the lessee's financial difficulties, resulting in the inability to pay rent. Therefore, before the lessor filed a lawsuit, the lessee has already occurred the situation of non-payment of rent, and the lessee may have other debts or even other cases have led to property preservation measures. Therefore, in order to maximize the protection of the lessor to take the judicial process after the judgment document is enforceable, it is necessary to take the judicial process and apply for property preservation, the lease, the lessee and the guarantor's property to take the necessary measures of seizure, freezing measures and the order of the first. However, while applying for preservation should be careful to provide preservation clues, weigh the risk, to avoid the wrong application for preservation.
6Once discovering that the leased property/collateral has been subject to preservation or enforcement measures due to other cases, timely and effective legal means to remedy the rights
1. If the lessor discovers that the leased property has been incorrectly preserved due to other cases, the lessor can take the following remedies according to the different stages of the case when it is preserved:
(1) If the leased property is seized by other creditors at the preservation stage of pre-litigation or litigation of the case preservation stage by other creditors, they can defend their rights by applying for reconsideration in accordance with the provisions of Article 111[8] of the Civil Procedure Law and Article 172[9] of the Interpretation of the Supreme People's Court on the Application of the <Chinese People's **** and the National Civil Procedure Law;
(2) If the leased property was executed at the execution stage, it can defend its rights by filing a written objection to the court in accordance with the provisions of Article 232 [10] and Article 234 [11] of the Civil Procedure Law, depending on the actual situation.
2. If the lessor discovers that the collateral has been subject to prior preservation or enforcement measures in connection with other cases, it may take the following remedies:
(1) coordinating with the court of first instance through the enforcement judge of the lessor's case for the transfer of the collateral to the enforcement court of the lessor's case for disposal;
(2) applying for a preferential payment to the court of first instance in respect of the property derived from the disposal of the collateral [ 12].
The above is the author in the combination of financial leasing related theories and related financial leasing project actual cases on the basis of combing and summarizing, derived from the financial leasing project need to pay attention to the legal risks and their prevention and relief proposals, I hope to give the industry related people to provide some valuable ideas and suggestions.