ZAFAR & ASSOCIATES - LLP | Leasing Law Services - Pakistan

Leasing Law Services

Leasing law corresponds with the lease, a transfer of an interest in the property for a stipulated period of time without transferring the ownership of that property, in a lease, right of possession is transferred instead of the right of ownership.

In accordance with Section 2 (15A) (b) of the Companies Ordinance 1984, Financial Institution includes a leasing company. The provision as to establishment and regulation of leasing companies is contained in Section 282-A of the Companies Ordinance 1984, which is enlisted in the Non Banking Finance Companies (NBFC's). The Federal Government has made rules for establishment and regulation of NBFC's which include the rules for leasing companies. It cannot be incorporated without prior approval of the Securities and Exchange Commission of Pakistan and license is issued by it. In view of the practical difficulties being faced by the NBFC's, engaged in the business of leasing only (previously known as leasing companies), in giving effect to their business transactions and preparation of accounts, the Commission considering it necessary and expedient so to do, has decided to issue directions for the aforesaid NBFC's. The Commission therefore, in exercise of the powers conferred by Section 282-D of the Companies Ordinance 1984 has directed all undertakings, the business of leasing only to conduct their business in conformity with the directions / regulations, called Prudential Regulations for NBFC's undertaking, which are similar to the regulations prescribed through the Leasing Companies (Establishment and Regulations) Rules 2000.


Rule 2 (xxx) of the Non Banking Finance Companies (Establishment and Regulations) Rules 2003 prescribe that a leasing company means a company licensed by the Commission to undertake leasing. Rule 2 (xxix) Leasing includes financial services provided on operating lease or finance lease basis, in accordance with International Accounting Standard. The leasing company has separate tier of minimum equity of Rs. 200 million and the company is incorporated as a public limited company under the Ordinance. The company has to allow at least 15% of the paid up share capital to the promoters to have to undertake that they shall not dispose of their share for a minimum period of 3 years from the date of commencement of business except with the prior approval of the Commission. Other conditions regarding to the appointment of Chief Executive, Change in the Memorandum of Association and Board of Directors cannot be made without prior approval of the Commission.

Terms & Conditions for Undertaking the Leasing Business

A Company licensed by the Commission to undertake leasing business shall invest at least 70% of its assets in the business of leasing unless it is duly licensed by the Commission to undertake any other form of business in addition to leasing. Cash and bank balances investment in government securities shall be excluded to calculate investment in leasing business for purposes of this definition. It has to provide facilities amounting to at least 5% of its funds based facilities to small entrepreneurs. It has also to acquire and maintain membership of Leasing Association of Pakistan and follow the code of conduct prescribed by the said Association.

The leasing company shall not hold, deal or trade in real estate except for use of itself and engage in leasing operations pertaining to open land, buildings other than factory buildings, warehouses, hospitals, educational institutions, office buildings and residential undertakings located within and outside factory premises to be used exclusively as such by a lessee, may be leased subject to a maximum of 120 square feet per employee provided that such investment does not exceed 20% of the overall lease portfolio of the company and furniture or furnishing of any type. In nutshell the NBFC's (Establishment and Regulation) Rules 2003 apply to all functions of the leasing companies.

Procedure

Under the provisions of Section 121 (K) of the Companies Ordinance 1984, every mortgage or charge or other interest based on hire-purchase or lease agreement for acquisition of fixed assets are void, if not registered.

For an application to the Commission seeking permission to establish a leasing company, a non refundable processing fee has to be paid at Rs. 100,000 under clause IX of the Sixth Schedule of the Companies Ordinance 1984.

Lease of Immovable Property

According to the Transfer of Property Act, 1882 a Lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

Lessor, lessee, premium and rent defined

The transfer is called the lessor, the transferee is called the lessee, the price is called the premium, and the money share, service or other thing to be so rendered is called the rent.

Ingredients of Lease

  • Transfer of right to enjoy immovable property;

  • The duration of the right of enjoyment must be fixed;

  • It must be for consideration either premium or rent or both; and

  • The transfer must be accepted by the transferee.

According to the provision of Section 106 of Transfer of Property Act, 1882 in the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six month notice expiring with the end of a year of the tenancy; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice expiring with the end of a month of the tenancy.

Every notice under this section must be in writing signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family, or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.

Difference between lease and licence

A licence confers a right to do or continue to do something in or upon immovable property of grantor which but for the grant of the right may be unlawful, but it creates no estate or interest in the immovable property of the grantor. A lease on the other hand creates an interest in the property demised.

Lease how made?

According to the Section 107 of the Transfer of Property Act, 1882 a Lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.

All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery or possession.

Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee.

Provided that the Provincial Government may, from time to time, by notification in the official Gazette, direct that leases of immovable property, other than leases from year to year, or for any class of such leases, may be made by un-registered instrument or by oral agreement without delivery of possession.

Lease Agreements

There can be no lease without a present demise. A mere agreement to grant a lease in future will not be a lease. Such an agreement will merely create a personal right and not an interest in the property. It is a matter of construction in each case whether the agreement is merely an executory one or a person demises and creates an interest in the property. The mere fact that an agreement provides that the lease is to commence from a future date or that there is a provision for the execution of a formal document does not make it a merely executory agreement and not a lease. Even where possession is allowed to be taken under the agreement it may amount only to a personal agreement not creating any present interest in the property, the right to take possession pending the grant of the lease being, in such cases, only a licence. But the circumstances of the case may show that apart from the lease that is agreed to be granted, there is another tenancy arising by implication from payment and acceptance of rent.

Ordinary leases at rack-rents are not generally preceded by a formal agreement, such as is common on a sale of land, or by an investigation into the lessor's title. As a rule the principal terms are arranged between the parties, and embodied with various ancillary provisions in a draft lease, which is prepared by the lessor's advices and submitted to the lessee, the ultimate form and contents of the instrument being adjusted by negotiation. If an intending lessee desires to examine the title he must make an express bargain to that effect, for under a contract to grant a lease the intended lessee is not entitled, in the absence of such express stipulation, to call for the title to the free-hold. By the Real Property Act, 1845, leases required by law to be in writing are void at law unless made by deed.

Lease Deed

There are reciprocal covenants to be undertaken by the lessor as well the lessee to be entered in the deed of lease.

The following are the implied covenants on the case of a Leasee:

  • To disclose material defects enhancing the value of the lessor's interest;

  • To pay rent;

  • To keep and restore the property leased in good condition, reasonable wear and tear and damaged by irresistible force excepted;

  • To permit lessor and his agents to inspect the property;

  • To make good defects caused by his acts or default within three months or notice by the lessor;

  • To inform lessor of any attack of a stranger on lessor's title;

  • Not to commit waste or use the property for a purpose other that that for which it is let; and

  • Not to construct.


Our Core Competencies

1

Collaborative Skillset

Collaborative lawyers trust the wisdom of the group; lone wolves and isolationists do not do any good anymore.

2

Emotional Intelligence

Distant, detached lawyers are relics of the 20th century, the market no longer wants a lawyer who is only half a person.

3

Technological Affinity

If you can not effectively and efficiently use e-communications, and mobile tech, you might as well just stay home.

4

Time Management

Virtually a substantial part of lawyers difficulties in this regard lie with their inability to prioritise their time.


What People Say About Us

  • Thank you for your email and the final draft. Indeed it is one of the finest drafts I have come across with. Certainly, your commitment level, eagerness to resolve, intellectual strength, attention to detail and legal expertise are commendable. Under your admirable guidance and direction, I have been able to maneuver with immense success and will reach fruition much earlier than anticipated. Thank you for being so supportive!

    Yaser Shan ~ Toronto, Canada
  • Thank you again so much for this wonderful service. I just wanted you both to know, I spent weeks searching for a service in Pakistan like this, that could legally handle payroll for a Pakistani employee for a US based business and so far I am extremely happy with your organization's service and punctuality. Your service thus far is absolutely amazing and I know Sunita is grateful that we were able to find your organization to ensure her position at our company.

    Prince E. Rich IV | CEO ~ Rich Technology Group LLC, USA
  • We are very happy with the work you have done. Its highly appreciated the professionalism and deep research by the team. Accept our deep gratitude! I do not know how to say Thank you to you and your team! It's a masterpiece you have created and we are very thankful for your help to assist in our social cause.

    Imtiaz Makhani ~ Karachi, Pakistan
  • Thank you very much for your fantastic support, which has been absolutely invaluable throughout the process. We really enjoyed working with you and look forward to plenty more opportunities for shared projects into the future.

    Dr. Albrecht Muser | KPMG ~ München, Germany
  • Working with all of you over the last years has been a pleasure and an honour! Your expertise, focus on customer service and professionalism make it possible for us to provide superior services to our clients and I am so grateful to you.

    Maude Burger-Smith ~ Cape Town, South Africa
  • We are glad to inform you the receipt of current outstanding balance in our bank account from the disputed party. Therefore we request you to arrange to close the dispute case with them as per our management decision. We would like to take this opportunity to thank you for all the support and advice to solve this matter. It was pleasure working with you all.

    Rahul Meppad ~ Dubai, UAE
  • Thank you for your support in this process and for your great hospitality. Your assistance has been of great importance. It was also important to see and experience the high quality of your services and your well known firm.

    Magnus Greko ~ Sweden
  • Thank you for your support in this process. Your assistance has been invaluable. We are looking forward to a long lasting working relationship with you. Also, thank you for hospitality during these past days.

    Lothar Geilen ~ Germany
  • Dear Atty. Iram Fatima: I would like to let you know that my wife came in USA last week. The U.S. Embassy Islamabad approved her visa petition in the lights of all the wonderful endeavors done by you and Mr. Birach. It was a long legal battle of about 7 years. I must say that your law firm is one of the best in the country and you are a highly professional advocate. Dr. Zafar should feel proud to have you in his crew. Finally, again I would say Thanks for all your legal services and I am your best reference.

    Zubair Mufti ~ Texas, USA
  • Dear Dr Zafar and Iram: Thank you very much for timely submission of the excellent opinion letter. It is very well drafted and covers the key points. We very much appreciate your excellent and timely work in preparing the legal opinion.

    Mrs. Iqbal Farrukh ~ San Francisco, USA
  • Dear Attorney Iram Fatima: Thanks so much for all of your kind efforts in this area and I must admit that your legal firm is the best in the country.

    Zubair Mufti ~ Texas, USA
  • The efficiency and effectiveness of your services are much appreciated.

    James Alexander Linton Williams ~ UK
  • We are complately satisfied with the e-communication and provided services. We would like to thank the whole team, and Ms Iram Fatima in particular, for your professionalism and the Due Diligence you carried out.

    Elena Pavlova ~ France
  • Many thanks for this, and thank you for being so prompt. It is very appreciated.

    Alex Gilchrist ~ Somerset, UK
  • Thank you again for handling my case so well, I am honoured to be represented by you.

    Yolanda Slabbert ~ Port Elizabeth, South Africa
  • Thank you very much for your great attention to my case, I see that you're a very serious company and I'm happy that I've choose you.

    Sergio Lujan ~ Bogota, Colombia
  • I really appreciate the help and support provided by Zafar and Associates to our company. I don’t know what to say or how to thank you, but to tell the truth your services are really the best legal services we have ever received. You are truly a professional and effective law firm.

    Adnan Branbo ~ Dubai, UAE
  • Thank you very much for your contribution. We will review the information and incorporate it into the International Citation Manual of Washington University Global Studies Law Review. Your help is appreciated.

    Naomi Levin ~ Washington, USA
  • I wanted to let you know that i got the documents. And i wanted to thank you and the whole team who worked on my case. You all did a good job thanks again.

    Naima Ashraf ~ The Hague, Holland
  • Thank you very much for all the work you have done to ensure that the Death in Service benefit reaches the parents of the deceased. Are they expecting this money and do they understand where it is coming from? We appreciate your assistance and excellent work.

    Susan Bauer ~ London, UK
  • I have no words to express my gratitude to you. People like you are very rare and I have the privilege to know one of those. May God shower all blessings on to you and your family. I am a small man with only prayers on my lips.

    Dr. Haridev Bhargava ~ Saratoga, USA
  • I must say your handling of this matter has been totally sterling and I shall not have any hesitation in recommending you and your firm to others.

    Rosina Ahmad ~ UK
  • Good morning, I received the documents back yesterday afternoon. Thank you so much for your quick response to the job. We really appreciate it. Looking forward to working with you in the further.

    Mrs. Jan Malcolm ~ Auckland, New Zealand
  • Thank you very much for the case. It is just brilliant! I am so grateful that you went out of your way to help me.”

    Loraine Bhan ~ Suva, Fiji
  • I do appreciate highly the sense of commitment your office wishes to dedicate to the follow up of our question for information. I have transmitted the contents of your email IMMEDIATELY to the contact, together with confirmation of the highest esteem we attribute to the quality of the services rendered by ZAFAR & ASSOCIATES.

    Paul Wouters ~ Istanbul, Turkey
  • Thank you very much for the information and good news. I know you’ve been working too hard and I appreciate every single minute working with you all. It’s an experience to be in the team of hardworking people and I am very proud to be included.

    Evangeline Williams ~ Paphos, Cyprus
  • I would like to thank you for your swift and excellent service that your office recently provided us. I would definitely forward your contact information to my friends and family in reference to seeking legal matters in Pakistan. I would also inform Sean Hogan and his associates to pass on your contact information to any clients that may need assistance in the matters of law in Pakistan.

    Zarar Khan ~ Miami, USA
  • We are greatly impressed with your firm and the professional calibre of the partners. If acceptable, we would like to keep your firm as a reference for future projects. Please let me know.

    Tanaz Pardiwala ~ Barcelona, Spain
  • We are happy to inform you that we have received the original succession certificate via DHL. I want to take this opportunity to thank you for your efforts, especially Dr. Zafar, who was kind enough to handle the security deposit at the court. With our best wishes and success for the New Year, to you and your esteemed team, we remain with.

    Mansur Asrar ~ Istanbul, Turkey
  • I am writing to convey to you how much I appreciate your prompt service! My mother called me today and informed me that 2 lawyers from your firm visited her. It is a pleasant surprise to know that such a law firm exists in our very own country. I would definitely recommend your firm to any friend who is in need of professional legal services in Pakistan.

    Naveed Ahmad ~ USA
  • I am truly very impressed with the follow up of your law firm. I never thought a Pakistani firm would be so aggressive and pro-active. Do you even happen to come to NYC? If so, then please look me up here when you visit next.

    Faisal Mumtaz ~ New York, USA
  • I want to thank you for all services you have rendered to us. I really appreciate it and hope on further cooperation.

    Petrov Andrey ~ Moscow, Russia
  • With God's help you have done a great thing for our family. Thank you so much for your diligence and expertise. We are truly grateful to God for all that is possible now. We also are looking forward to meeting you and your staff when we arrive in Pakistan next month. Please let us know if there is anything we can bring for you from the United States as a gift.

    Shaukat Minhas and Colleen Davidson ~ Dallas, USA
  • Your help in investigation case is well appreciated. My brother and I are ever grateful to you for obtaining the document. Thank you and god bless you and your practice team.

    Kevin Lessani - Dallas - USA
  • I greatly appreciate that your law firm is very careful in its preparation of petitions. In fact, the outcome of a legal fight greatly depends on how effectively a law firm has presented its case. If it fails to conceive in advance as to what it will have to face in defense, it can not prepare an effective petition. I admire that ZAFAR & ASSOCIATES - LLP are very careful in their initial step i.e. to prepare petition, around which the whole legal battle is fought.

    M. Iftikhar Sheikh ~ Dhahran, Kingdom of Saudi Arabia