Equipment Leasing Expert Witness

Common Problems in Equipment Leasing

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As with any other business or industry, there are situations where well intended parties find themselves in an unintended conflict that they cannot resolve. Add to that the situation where a dishonest individual intentionally commits fraud upon a leasing company and absconds with money where an underlying lease does not exist. An example of the multitude of problems can arise in the processing of an equipment lease are:

Advance Fees.   One of the most common issues of dispute on both legal and ethical grounds are those that involve the retention or return of advance fees. The resolution of the issue involves an analysis of documentation, the facts to determine how the potential lease unwound, whether or not an actual approval for leasing was obtained, costs involved in obtaining the approval and the ethical consideration of a potential economic windfall associated with the retention of advance fees. Not only can this dispute arise between the lessee and the lessor, but it can arise between a broker and a funding source as well.

Fraud in the Leasing Process. Appreciating that the leasing process itself is multi-dimensional and involves multiple disciplines, the opportunity to commit fraud in the leasing process is available to all those involved in putting a lease together, including brokers, funders, customers, equipment vendors and even funding sources. No one in the process is immue from being the potential victim of fraud.

Broker/Funder Relations. Leasing is an industry where third party originators generate a tremendous amount of leasing volume for their funding sources. The various rights and responsiblities of funders to brokers and brokers to funders must be contractually defined and if there is such a contract, the terms and conditions of such a contract should be understood by both the broker and the funder.

Vendor Relations. Are vendors entitled to be paid referral fees from leasing companies that they refer lease transactions to?  Even if they are entitled, is it ethical for vendors to remit such fees at the expense of the lessee? If it can be done, how should it be done? This issue can cause problems for everyone in a lease transaction.

Documentation. The constant struggle between aggressive marketing and legal protection revolves around sophistocated documentation. And just because a creative document says something, does that mean that it is enforceable? And a lease is not a lease. The  type of lease determines legal rights and obligations of the parties involved.



 

Attorney Joseph G. Bonanno
Certified Lease Professional
Equipment Leasing Expert Witness
15 New England Executive Park
Burlington, MA 01803
(781) 328-1010
(c) 2007, Joseph G. Bonanno
Any Reproduction is Strictly Prohibitted

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