While most lessors and lenders engage in ethical practices, some unscrupulous companies trick lessees into signing documentation which contains misleading language or does not reflect to the understanding or oral agreements of the parties.

The articles on this site address and explain in detail many of these practices. Please note that this is by no means an exhaustive list. There are more types of unethical or illegal lessor and lender practices than we can possibly list here. We can, however, deal with all of them and many lessor "tricks" are actually unenforceable. 

·       Lease v Purchase – The lessee is assured that it is taking out a loan secured by equipment and that the lessee will own the equipment as soon as the “lease” is paid off. This is sometimes referred to as a $1.00 purchase option. The lease actually omits this agreement and requires the lessee to make a substantial additional payment to buy the equipment at the end of the lease if it wants to keep the equipment.

·       Automatic or Improper Renewal – The lessee is required to give written notice that it intends to return the equipment 120, 180 or even 210 days before the end of the term.  Otherwise, the lessor claims that the lease continues and the lessee is required to keep paying rent. Sometimes these “evergreen” leases can go on forever unless the lessee agrees to pay an inflated amount for the equipment or lease new equipment from the lessor.  Such unfair provisions may not be enforceable.

·       Purchase Options – Many leases include “fair market value” purchase options in which the lessor has the unilateral right to determine arbitrarily how much the equipment is worth at the end of the term.  Such provisions may be unenforceable if the amount claimed by the lessee does not reasonably reflect actual market value.

·       Extra Rent – Some leases are designed to extend the term (and rent payments) 30, 60 or 90 days beyond the stated term. This can mean that the cost of the equipment in a “full payout” lease exceeds the purchase price or that the interest rate used to calculate rent is, in fact, much higher than what was quoted to the lessee.

·       Returns – Some leases permit the lessor to refuse to accept return of equipment at the end of the term and continue to charge rent because of normal wear and tear or the most minor damage to equipment.

·      Force Placed Insurance - Lessors always require lessees to obtain insurance on the leased equipment.  Sometimes, an unscrupulous lessor will “force” the lessee to pay for insurance provided through the lessor at an inflated cost. This "force placed" insurance usually provides no protection for the lessee and can result in additional profit to the lessor.

·       Taxes, Etc.-  Many lessors require that lessees pay “estimated” taxes or overcharge for taxes. Some lessors “forget” to refund any overpayment.

·       Unclear or Misleading Language – These and other unethical practices are often facilitated by language that even an experienced lawyer would find hard to understand unless he or she has faced these issues before.

We have seen it all. Rest assured that there may be legal options available to you. We are here to explore all of those options with you. Let's get to work.