Legal Question in Real Estate Law in California
Equipment lease
I leased some business equipment for 5 years with a 10% buyout. When the time came to make the buyout the company required at least 30 days notice. I gave notice 60 days in
advance to my intention to buyout the equipment. The company gave me a breakdown of the final payments to buyout
the system including sales tax and any residual late fees.
The payments were made and the checks were cashed by the leasing company. At this point I owned the equipment.
The next month the leasing company sent me a bill with penalties and interest and a new lease payment. When I called them they said that they forgot to add fees to my
buyout and that I was now in default with my lease and it was renewed.
The money from the last check that they cashed for 10% buyout has disappeared. What should I do? I own it.
3 Answers from Attorneys
Re: Equipment lease
You should have an attorney review the lease and other documents and then write a demand letter.
Re: Equipment lease
You didn't say what the approximate value of the equipment is, or how much cash payment is demanded. The size of these sums will have an impact on both sides' strategies.
If what you say is correct, and there are no additional facts supporting the leasing company's demand, you would probably prevail in court, and this is true even if you actually owed the leasing company more money than they initially billed you for; they cannot now correct their earlier error.
You have possession of the equipment and are, I believe, now entitled to documentary proof of ownership through a bill of sale and release of any financing instruments such as UCCs that may have been filed.
If the amount in dispute is less than $5,000 or so, you might consider a small-claims action for a judgment ordering specific performance of the lease term (assuming there is one) calling for you to receive a bill of sale or other evidence of ownership upon making the final payment.
If the amount is significantly greater, you may have to sue in superior court for a declaratory judgment and specific performance. If the lease has an attorney fee provision and you are confident of winning and collecting, that would add to the preference to go to superior court.
Re: Equipment lease
It sounds like you may be able to resolve this issue. Please contact Mary at my office to set up an appointment
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