Buy-back and lease-back in Romania

Although the buy back and leaseback operations appeared slowly on the Romanian market, more and more companies have gradually started to offer such services in the form of programs. Some companies, for example, offer their customers discount vouchers they can use in order to buy other products by the means of returning previously bought products.

But what exactly are buy-back and lease-back operations and what do they entail on the Romanian market?

The buy-back operation, in general terms, represents a way for the seller to redeem their sold property from the buyer, in a certain period of time and under certain conditions.

Regarding the application of this concept in the matter of leasing operations, the  buy-back contract takes the form of an agreement between the financier and supplier of the goods under which the latter undertakes to repurchase the assets that were subject to a lease from the financier in case the property is not transmitted by the user.

There are many reasons that may underlie said redemption, but most often these operations are motivated by the desire to acquire another good by returning the previous goods by the user before the end of the leasing contract or they represent the users’ option to return the goods to the leasing societies the moment that the contract of lease ends.

Regarding the lease-back operations, they constitute a form of financial leasing which is accomplished by selling the goods, property of the user, to a non-banking financial institution, followed by the release of the right to use said goods, by the financier, for a determined period of time.

 What is characteristic of this lease-back operation is that the user owns, based on the financial leasing contract, the right to regain ownership of the goods at the end of the contract, under the terms and conditions established by it.

Moreover, Government Ordinance no. 51/1997, republished in 2000, regarding the leasing and leasing companies refers, in its final provisions, to the applicability of its legal terms to the situation where a legal person sells its industrial equipment to a leasing company, in order to use the equipment under the leasing system leasing, under the obligation of redemption.

These provisions advert upon the lease-back operations which are made possible only regarding the financial leasing operations, given that the financial leasing operations are the only ones who provide for the possibility of redemption enshrined in art. 2 letter e) pt. 2 of the aforesaid ordinance, which states that a financial leasing operation is the operation that meets, among others, the condition that the parties have expressly provided the fact that at the expiry of the lease, the transfer of ownership of the property will be made to the user.

Seeing that the lease-back and buy-back operations are relatively new within the Romanian market, Darie, Manea & associates can provide legal advice and counseling, as well as representation with all the competent authorities in the case that you need further information regarding the matter. Please feel free to contact us whenever you see fit and our team of lawyers will offer you the optimal solution to your problems.