Leasing or Financial Lease Contract

This is a contract in which a natural or legal person receives the use of an asset in exchange for paying a monthly fee over a stipulated period. The leasing contract, involving a lessor and a lessee, is characterised by including a purchase option, whereby, once the payment of the fees is completed, an option is exercised to pay a certain amount of money to obtain the asset for which the payments were made.

The most common example of leasing is the granting of real estate to commercial companies (for example, a warehouse) and movable assets (machinery, computer equipment, etc.) due to its commercial and financial nature. Especially in movable assets, it allows technological renewal and replacement of the equipment of companies and businesses.

It is also common in leasing contracts that, due to insufficient liquidity to pay for the grant, credit institutions are approached to finance the purchase.

When this type of contract is formalised, it is the lessee user who assumes the risks established in the contract, such as maintenance, insurance, proper use, or breach of the clauses concerning the asset in question, differentiating it, in this case, from other types of contracts such as renting.

• Like loan policies, financial leasing is a form of credit, as there are instalments for payment. These can be fixed or variable.
• It is important that there is an accounting record of the leasing, that is, that the asset and liability are recorded in the balance sheet.
• Once the instalments are established, the amount for which the purchase option is exercised is known as the residual value. Until the payment of the purchase option is completed, the leasing company is the owner of the asset, although maintenance is the responsibility of the lessee.
• The asset that serves as the object of the leasing is offered as collateral for the policy, although guarantors may be required.
• The formalised contract is known as a leasing policy before a Notary.

There are different types of leasing such as:

• Financial leasing (movable or immovable assets).
• Operating leasing.
• Leasing with financial leverage.
• Indirect.
• Retroleasing.

The difference between this type of lease lies in the role of the lessor. The financial lease is carried out by companies that purchase goods for potential lessees with the aim of making a profit. It is the most common type of leasing used to provide a financial service. And, depending on the asset, we find:

• financial leasing of movable assets (machinery, computers, medical equipment…) with contracts lasting a minimum of two years.
• financial leasing of real estate (to finance warehouses, commercial premises, offices…) with contracts lasting a minimum of 10 years.

However, the operating lease is carried out by manufacturers or distributors and importers to offer their clients financing to promote the sale of their goods. These are short-term contracts where residual values are high and the purchase option is usually not exercised.

In summary, they are characterised by:

• In financial leverage leasing, a lender appears who contributes 80% of the total value of the operation.
• Indirect leasing: it is the seller who contacts the lessee and lessor.
• Sale and leaseback: the owner sells the asset to a leasing company to obtain liquidity, but continues using it as a lessee and can exercise the purchase option.

When a leasing policy is closed, tax advantages may be applied in the Income Tax return (for individuals) or in the corporate tax (for companies or legal entities, but they may also be applied in the quarterly VAT return, according to the tax legislation applicable at each time. The main tax advantage is usually the possibility of deducting the leasing fees as an expense.

The Corporate Tax Law determines that to obtain tax benefits for financial leasing the following conditions must be met:

• That the purpose is the transfer of use.
• The use must be intended for economic activity.
• That the contract establishes the minimum duration mentioned above of 2 years for movable goods and 10 for real estate.
• That the contract includes the recovery of the cost and the financial charge.
• Interest is considered a deductible expense and the Tax Authority will accept its deductibility.

The Notary intervenes in leasing contracts offering legal security and explaining the clauses in detail in an impartial manner. They grant validity, certifying with their signature that the parties have consented to the agreement voluntarily and consciously. This type of contract, formalised before a Notary in the form of a policy, is known as a leasing policy or financial leasing policy.

Thus, this policy facilitates enforcement in the event of breach of the agreed terms through judicial means, since the notarial leasing policy prevents challenge before a court and reduces the risk of litigation. This means that its clauses can be applied without the need for a trial and that the creditor can resort to the seizure of assets.

Furthermore, the Notary will authenticate the signatures and keep the original signed document in custody. They will also issue the necessary copies for the signatories.

Contact Notarios online to have your leasing contract intervened, regardless of the location, to effectively execute the intervention and signing of the financial lease and thus obtain the benefits offered by the leasing policy before a Notary.

You should be aware that currently, following Law 11/2023 on the digitalisation of notarial acts, financial lease agreements (or leasing) can be signed entirely digitally before a Notary. The signature will be made without the need to attend the notary's office, taking advantage of the benefits of new technologies and with an electronic certificate, through the platform of the citizen's notarial portal.

Furthermore, you should know that the financial institution uploading a leasing agreement to the Citizen's Notarial Portal will not have to sign it either in person or digitally, as the act of uploading the agreement to this Portal constitutes the credit institution's consent.

• ID cards, NIE or Passport of the individuals applying for the leasing
• Identification document of the representatives of the entities and power of attorney accrediting the representation (or appointment of administrator) or of the individuals involved in the operation
• Certified copies of the deed of incorporation of companies and real ownership certificate in the case of companies. Sometimes the Shareholders' Meeting Agreement is also required.
• Policy with the conditions.

The costs for processing a leasing contract at a notary are regulated in the notarial fee schedule. The cost of the policy depends, among other aspects, on the amount of the debt and the number of pages of the policy.

The price of notarial acts is regulated by the Government and complies with the regulatory framework of the NOTARIAL FEE SCHEDULE (RD 1426/1989, of 17 November, regulating the Notaries' Fee Schedule).

In any case, the exact cost of a notarial document cannot be calculated precisely until its specific content is known, that is, until it is signed, as there are many circumstances that can cause it to vary. The number of copies requested of a document, the amount of the transaction, the pages it contains, as well as possible changes or additions, can slightly alter the final price.

If you wish to receive a detailed quote, we invite you to contact us directly through the channel that is most convenient for you. You can do so via the contact form on the main page of this website, through the contact section found in the footer of the website, using the direct WhatsApp access at the bottom right of this page, by sending an email to bcn@jlanotarios.com, or by calling us at 93 159 17 62.

As a guideline, we can inform you that, according to the current regulatory framework, the usual price for formalising a LEASING POLICY before a Notary for an amount of €50,000 is approximately €250, including VAT.

This indicative price is calculated for a document of usual content, requested by a company, and with a transaction maturity exceeding 6 months. Additionally, it has been considered necessary to obtain the commercial information of the company from the Mercantile Registry.