Part Two The Contract
Article Three
The Lessee, upon a written consent of the Lessor, may assign the Contract to another Lessee. The Lessor, within not more than ten (10) business days of the assignment date, shall attest his consent at the Contracts Register. Refusal to give consent by Lessor shall be reasoned.
Article Four
The Lessor may assign his rights under the Contract without the consent of the Lessee, unless the Contract stipulates otherwise. Under all circumstances, the following shall be fulfilled in the event of assignment:
1.
The assignment shall not cause detriment to the Lessee.
2.
The assignment becomes effective on the date of its registration in the Contracts Register.
3.
The assignment does not relieve the Lessor from its obligations under the Contract.
4.
If the assignment results in change in the recipient of the lease payments, it shall be enforceable towards the Lessee only from the date of notifying the Lessee of the change.
Article Five
If the Leased Asset needs to be examined by the Lessor, the examination method, time and the examination date shall be set out in the Contract or in one of the schedules thereto, provided that this will not cause any detriment to the Lessee or fetter the quiet enjoyment of the Leased Asset.
Article Six
1.
The Lessee shall forthwith notify the Lessor in writing or by an electronic message, of any events in respect of the Leased Asset that entirely or partially fetter quiet enjoyment thereof, using the contact details set out in the Contract and in accordance with applicable notification rules.
2.
In the event the Lessor has not removed what totally or partially prevents benefiting of the Leased Asset within the period prescribed in the Contract, the Lessee may take the appropriate measures for the protection of the Leased Asset and the full quiet enjoyment thereof at the Lessor’s expense and deduct the costs of such measures from subsequent lease payments.
Article Seven
1.
In case of issuance of securities, against the Lessor’s rights, in accordance with regulations and rules issued by the Capital Market Authority, the Lessor remains obliged to forthwith disclose to SAMA any technical, commercial, legal, or other risks in relation to the Contract, the underlying leased asset, or the Securitization against the Lessor’s rights as a whole.
2.
The Lessor remains obliged to ensure compliance with all related supervisory requirements.
Article Eight
In circumstances where the license should be obtained prior to concluding the Contract, the Lessor or its representative, shall obtain the license referred to in Article 13 of the Law. In such case, the license shall include the name of the Lessee holding the Leased Asset.
Article Nine
1.
In case the Lessee has the right of ownership or the promise of it, the Contract shall include a payment schedule determining the principal lease value of the asset and the value of the right of ownership separately. The installment for any period of the Contract Term shall not be less than the lease value of the asset for such period.
2.
Without prejudice to the provision of Clause 1 of Article 9, in case of termination or expiry of the Contract during the lease term upon mutual consent of the parties or pursuant to the provisions of the Contract or Law, the Lessee may recover the right of ownership value for the period paid.
3.
Lessor may have the insurance indemnity, if any.
Article Ten
1.
SAMA may establish standards for finance lease contracts that ensure the integrity of the finance system, fairness of transactions, and achieve the objectives of the Law and its Regulations.
2.
SAMA may adopt standard finance lease contracts that take into account the rights of the related parties.
3.
To ensure fairness of the conditions of the Finance Lease products intended for individuals or beneficiaries of microfinance, the Lessor, prior to launching these products, shall obtain a non-objection letter from SAMA.*
* This paragraph has been amended in accordance with His Excellency the Governor's Decision No. 93/M SH T dated 18/10/1441H.
Article Eleven
If a Lessee selects to own the Leased Asset under the Contract, at any time, he may practice the right of early ownership of the Leased Asset by concluding a separate annex to the Contract upon payment of the remaining installments, , and without incurring the term cost for the remaining period of the Contract. The Lessor shall be entitled to compensation for the following:
1.
Cost associated with reinvestment not exceeding the term cost for the three months following the early ownership.
2.
Any cost required to be paid under Contract to a third party by the Lessor if such cost cannot be recovered; and that shall be for the remaining period of the Contract.
With exception to the aforementioned, a period for prohibition of transfer of ownership may be provided for in the Contract, if the subject of Contract is real estate and such condition results in deduction in term cost. Prohibition period shall not exceed two years from the date of Contract.