Research On The Legal Issues Of Mortgage On Financial Leasing

Financial leasing is a new type of three-way trade mode, which is the combination of funds and assets. In the financial leasing transaction, the lessee shall choose the seller and the lease item firstly, then the lessor signs the sale contract with the seller the lessee chooses.During the financial leasing period, the lessee takes possession and use of the lease item and pays the rent to the lessor. The relationship between the rights and obligations under the financial leasing transaction is complicated. Financial leasing transaction is a new type of transaction mode that concluding sale contract and lease contract. Before the seller completes the obligation of the delivery of the lease item, the owner of the lease item and the right to possession and use of the lease item belong to the seller. After completion of the delivery, the ownership of the leased property belongs to the lessor, and the right to take possession and use of the lease item transfers to the lessee. As a result, each of the three parties of the financial leasing transaction has the condition to set up mortgage on the lease item, and the mortgage on the property by a party may result in the conflict between the rights on the lease items and harm the interests of other subjects. At present, the legislation about adjusting the financial leasing transaction in our country is imperfect., mainly through "Contract Law of the People’s Republic of China" and the “Interpretation of the Supreme People’s Court on Issues concerning the Application of Law in the Trial of Cases Involving Disputes over Financial Leasing Contracts” to adjust. The imperfection of the legislation leads to many disputes existing in financial leasing which can’t be solved effectively. So it is difficult to realize the right protection of the main body of the financial leasing transaction. To study and seek the solution to the conflict of rights caused by the mortgage of financial lease, which is conducive to accelerate the speed of the financing leasing legislation.In this paper, the research on the mortgage of the financing lease is made up of five chapters.The first chapter introduces the basic theory of financing lease from three aspects: the basic theory of financial leasing, the specific situation of the mortgage on financial leasing and the regulation of the financing leasing in our country.The second chapter analyzes the conflict of rights caused by the mortgage of the lease item. Before the seller delivers the lease item, as the owner of the leased property, seller has the condition for the establishment of mortgage on the leased property. At this time, protectionfor the third party’s mortgage is at the sacrifice of the lessee’s or lessor’s interests on the the lease item. During the financial leasing period, the lessor, as the owner of the leased property,can establish mortgage on the lease item for other people. There is a risk that mortgage Influences the lessee’s leaseholds. The lessee uses the leased property to set up a mortgage on the lease item to fail for a bona fide third person which fails the guarantee of the lessor’s ownership. When the lessor and the lessee establish the mortgage right in the leasehold at the same time, there will be multiple conflicts of rights on the lease item, including the conflict between the mortgages, the mortgage and the leaseholds the mortgage and the ownership. By analyzing above mortgage behaviors, after the delivery of the lease item, the seller doesn’t have interests on the lease item any more. Therefore, the seller’s interests are not affected by the mortgage appearing during the financial leasing period. And setting up the mortgage on the lease item by the three subjects will cause adverse effects on the interests of the lessee and the lessor on the lease item. In the next two chapters, we will discuss the protection of the rights of the lessee and the lessor.The third chapter focuses on the protection of the rights of the lessee. On the basis of analyzing the problems about the practical effect and existence of the existing claim right system, the quiet possession guarantee system and the coordination rules of mortgage and the lease right on the lessee’s right protection. The author puts forward some suggestions to improve the system of the protection of the right of the lessee.The fourth chapter mainly discusses the protection of the rights of the lessor, the author clarifies the defects about the practical effect of the legal right of the lessor, the registration system of the financial leasing and the system of the bona fide acquisition of the third party on the protection of the right of the lessor, and puts forward some suggestions for improvement.Through the discussion of the above four chapters, we can recognize that the act of the mortgage will adversely affect the interests of the lessor and the lessee on the lease item, even leads to the failure of financial leasing transactions. Therefore, the author proposes to establish the rules of the prohibition of setting mortgage on the lease in the legislation, to let the lease item enter into dormancy during the lease term.