Additional First Provision of Law 28 of July 13 1998 on Installment Sales, in force as from September 13, has solved some of the traditional legal issues concerning financial leasing transactions. The law's main features are as follows.
Registration of leasing agreements
Leasing agreements relying on identifiable, material, non-consumable chattel assets may be recorded within a special section of the Installment Sales Registry.
Enforcement of payment obligations by the lessor
In principle, the lessor is entitled to enforce payment obligations breached by the lessee through the common procedural law remedies. However, if the leasing agreement has been executed in a public document, then the lessor may benefit from a summary legal action (juicio ejecutivo) to claim any amounts due and unpaid by the lessee.
Default by the lessee
In case of default by the lessee under a leasing agreement either recorded with the Installment Sales Registry and granted in the official form or executed in a public document, the lessor may terminate the leasing agreement in advance and recover the leased asset under the following procedure:
- the lessor must request payment of all outstanding amounts to the lessee by means of a notary public's notification; and
- the lessee may either pay the amount due or deliver the leased asset in the three days following receipt of notification. If the lessee fails to pay or deliver the leased asset, then the lessor may request immediate repossession to the courts through a special summary procedure.
Finally, the lessor will have the right not to attend the creditors' meeting called within a suspension of payments proceeding filed by the lessee, without its resolutions binding on him or her, and will be entitled to repossess the leased assets ex iure domini, after prior acknowledgment of his or her right by the court in charge of the lessee's bankruptcy.
Luis de Carlos and Javier Redonet