The Senate approved amendments to the laws on rent and leasing. What is changing?

The Senate of the Oliy Majlis approved amendments to the laws “On Lease” and “On Leasing” at the plenary session on August 24, “Gazeta.uz” reports with reference to the press service of the upper house of the Parliament of Uzbekistan.

The first law does not regulate the definition of a lease agreement with subsequent purchase and related relations. In addition, there is no norm that protects the rights of tenants when they acquire a rental object in their property. In particular, after the payments were made, the tenant wanted to register the object as his property, but later it turned out that this property was pledged or foreclosed.

Chairman of the Committee on Budget and Economic Reforms Erkin Gadoev, citing data from the Supreme Court, said that in 2020, 10 persons were convicted in criminal cases of fraud in the rental or leasing of cars, and in 2021 this figure increased by 2 times and amounted to 22.

The damage caused to citizens as a result of these crimes amounted to 8.2 billion soums in 2020, and in 2021 it increased almost 9 times — to 69.3 billion soums. The number of victims of similar crimes has increased 16 times — up to 16.8 thousand people.

The amendments establish that under a lease agreement with the condition of subsequent redemption, the lessor, when leasing his property, undertakes to transfer it to the lessee’s ownership after he fulfills the terms of the contract.

From the moment of conclusion of such an agreement, the property is considered to be pledged in favor of the lessee, therefore it is prohibited to pledge it to other persons or dispose of it in any other way.

The law “On Leasing” states that the lessor has no right to use the leased object as collateral without the prior consent of the lessee. But there is no provision that the lessor does not have the right to dispose of the leased object without the consent of the lessee. Therefore, there are cases when the leasing object is aimed at recovery to ensure other obligations of the lessor.

In this regard, a provision is introduced that the lessor does not have the right to dispose of the leased object in any other way without the consent of the lessee.

The norm is also introduced, according to which, unless otherwise provided by the leasing agreement, from the moment of conclusion of the leasing agreement, the object of the agreement is considered to be pledged to the lessee to ensure the fulfillment of the lessor’s obligations.

In addition, the possibility of the lessee acquiring the leasing object into ownership is indicated, having fully paid its cost before foreclosure.

Foreclosure on the leasing object (its withdrawal) for the obligations of the lessor or lessee to third parties is carried out within the limits of the lease payments paid and received by them. At the same time, before the withdrawal of the object, the state executor must offer to buy the object by paying the balance of the lease payments due under the lease agreement, minus the lessor’s income for the remaining period. Then the withdrawal of the leasing object stops.

The Chairman of the Senate Tanzila Narbayeva said that in practice there are many cases when citizens are deceived and incur huge losses in matters of rent and leasing.

“Entering into rental, leasing relations, every citizen should be fully confident that his rights are firmly protected by law. This is exactly what the new norms in the law are dedicated to,” she said.

According to her, there will be no necessary results if the direct executors do not ensure the correct interpretation and application of the law. Therefore, all officials, especially in the regions, deputies of local councils should pay serious attention to raising awareness of the population and officials about these innovations, the head of the Senate noted.