Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates

UNOFFICIALLY CLEANED TEXT
REGULATION
ON THE CONTENT AND FORM OF LEASING AGREEMENTS AND THE METHODOLOGY FOR CALCULATING EFFECTIVE INTEREST RATES (Narodne novine No. 66/14 and 86/18) The Regulation on Amendments and Supplements to the Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates (NN, No. 86/18) entered into force on October 4, 2018.

Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates - Unofficially Cleaned Text (NN, No. 66/14 and 86/18) General Provisions
Article 1.
(1) This Regulation further prescribes the content and form of leasing agreements and the methodology governing the effective interest rate in financial leasing agreements.
(2) The entities obliged to apply this Regulation are leasing providers who conclude leasing agreements with the lessee in the Republic of Croatia, which includes leasing companies defined in Article 3 of the Leasing Act, leasing companies from a Member State defined in Article 46 of the Leasing Act, branches of leasing companies from a third country defined in Article 48 of the Leasing Act, and credit institutions that conclude financial leasing agreements as leasing providers.

Terms and Definitions
Article 2.
For the purposes of this Regulation, the following terms and definitions have the following meaning:

1. Act – Leasing Act ("Narodne novine" No. 141/13).
2. Agreement – Leasing Agreement as prescribed by Article 52 of the Act.
3. Leasing Provider – leasing company as defined in Article 3 of the Act, leasing company from a Member State as defined in Article 46 of the Act, branches of leasing companies from a third country as defined in Article 48 of the Act, and credit institutions that conclude financial leasing agreements as leasing providers.

By Article 1 of the Regulation on Amendments and Supplements to the Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates (NN No. 86/18), which entered into force on October 4, 2018, paragraph 4 was added after paragraph 3 in Article 3:
Leasing Agreement
Article 3.
(1) The Agreement must be concluded in written form, and the provisions of the Obligations Act shall apply unless otherwise prescribed by the Act and the corresponding Regulation.
(2) The Agreement must be written in a clear and understandable manner so as to enable the lessee to access all essential information regarding the terms of the Agreement from which the rights and obligations of the contracting parties will be evident.
(3) In concluding an Agreement with a consumer as the lessee, the leasing provider is obliged to apply the provisions of the Consumer Protection Act as well as other statutory and subordinate regulations that regulate and protect the rights and interests of consumers, and in financial leasing agreements, the provisions of the Consumer Credit Act and its subordinate regulations. (4) The leasing provider is obliged to make the current general terms and conditions of the leasing agreement publicly available by publishing them on the leasing provider's website.

Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates - Unofficially Cleaned Text (NN, No. 66/14 and 86/18) Content of the Leasing Agreement
Article 4.
(1) The Agreement, in accordance with Article 52, paragraph 1 of the Act, must contain the following provisions: the title "operational leasing agreement" or "financial leasing agreement", the date of conclusion of the Agreement, the company name and seat of the leasing provider, the company name and seat, or name, surname, and address of the lessee, the company name and seat, or name, surname, and address of the supplier of the leased object, detailed specification of the leased object, the value of the leased object, the total amount of fees (sum of individual fee amounts), the amount of each individual fee, the duration of the Agreement, the reasons and conditions for early termination of the Agreement. (2) The financial leasing agreement, in addition to the provisions of paragraph 1 of this Article, must obligatorily contain the following provisions: the amount of the participation in the total value of the leased object, the amount, number, and payment deadlines of individual installments (repayment schedule), the nominal interest rate, and the effective interest rate. (3) The operational leasing agreement, in addition to the provisions of paragraph 1 of this Article, must obligatorily contain the following provisions: the amount, number, and payment deadlines of individual installments and the residual value of the leased object.

Date of Conclusion of the Agreement
Article 5.
(1) The Agreement, in accordance with Article 52, paragraph 1, point 2 of the Act, must contain the date of conclusion of the Agreement.
(2) The Agreement is considered concluded when it has been signed by all contracting parties.

Data on the Company Name and Seat of the Leasing Provider
Article 6.
The Agreement, in accordance with Article 52, paragraph 1, point 3 of the Act, must contain data on the company name and seat of the leasing provider, as the entity authorized to perform leasing activities in accordance with Article 6 of the Act, and which concludes the Agreement with the lessee in accordance with Article 51 of the Act.

Detailed Specification of the Leased Object
Article 7.
(1) The Agreement, in accordance with Article 52, paragraph 1, point 6 of the Act, must contain data on the detailed specification of the leased object by which the leased object can be identified unequivocally, such as brand/description, model, type, serial number, etc., and for real estate, its land registry data. (2) If the leased object consists of multiple objects, the Agreement may list the document containing the detailed description of the leased objects. (3) If the subject of the Agreement is a co-owned part of the leased object, the Agreement must state the co-owned part in the form of a mathematically determined proportion of the entire ownership right of that leased object.

Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates - Unofficially Cleaned Text (NN, No. 66/14 and 86/18) (4) If the serial number of the leased object is not known at the time of concluding the Agreement, it may be determined subsequently when it becomes known to the leasing provider by concluding an addendum to the Agreement, and in any case before the handover of the leased object to the lessee.

By Article 2 of the Regulation on Amendments and Supplements to the Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates (NN No. 86/18), which entered into force on October 4, 2018, paragraph 4 of Article 8 was amended, and paragraph 7 was supplemented by adding the word "current" after the word "amount":
Amount of Individual Fees and Total Amount of Fees
Article 8.
(1) The Agreement, in accordance with Article 52, paragraph 1, points 8 and 9 of the Act, must contain data on the amount of individual fees and the total amount of fees.
(2) Individual fees are fees that the leasing provider will charge the lessee upon concluding the Agreement and during the regular repayment of the Agreement (installments/installments, participation, agreement processing costs, buyout value of the leased object).
(3) The total amount of fees represents the sum of individual fees.
(4) In addition to the fees from paragraph 2 of this Article, all types of other fees (special fees, other costs known in advance to the leasing provider) for which the leasing provider may charge the lessee must be individually listed in the Agreement.
(5) If the amount of other fees is not specified in the Agreement, the leasing provider is obliged to inform the lessee of their amount by making the amount of other fees available to the lessee in an appropriate manner.
(6) The Agreement must contain a statement by which the lessee confirms that they are aware of the types and amounts of other fees.
(7) The leasing provider is obliged to make the type and amount of current other fees publicly available by publishing them on the leasing provider's website and in a suitable place in the leasing provider's business premises.

By Article 3 of the Regulation on Amendments and Supplements to the Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates (NN No. 86/18), which entered into force on October 4, 2018, in Article 9, the word "early" was deleted in paragraph 2, the word "early" was deleted in paragraph 3, paragraph 4 was amended, paragraph 5 was supplemented by adding the words "in the contractual provisions prescribe that" after the phrase "is obliged", and paragraph 6 was added after paragraph 5:
Obligations of the Leasing Provider in Case of Early Termination and Regular Expiration of the Agreement
Article 9.
(1) The Agreement, in accordance with Article 52, paragraph 1, point 11 of the Act, must also contain data on the reasons and conditions for early termination of the Agreement.

Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates - Unofficially Cleaned Text (NN, No. 66/14 and 86/18) (2) The reasons for which the leasing provider may terminate the Agreement must be described in detail in the Agreement and refer to all legal and material consequences that may arise for the lessee due to the termination. (3) The leasing provider is obliged to indicate in the contractual provisions the exact conditions under which, in the event of termination of the Agreement, it may retain the lessee's security instruments and guarantee, as well as the deadlines for returning them to the lessee. (4) In the event of termination of the Agreement, the leasing provider is obliged to clearly determine in the contractual provisions all elements for calculating the final settlement under the Agreement and to indicate the deadline by which the final settlement will be delivered to the lessee. In the event of a positive difference in the prepared final settlement, the Leasing Provider is obliged to prescribe the handling of the same in the contractual provisions. (5) In the event of the regular expiration of the Agreement, the leasing provider is obliged to prescribe in the contractual provisions that it will deliver the final settlement of the Agreement to the lessee and return the security instruments and guarantee within 60 (sixty) days from the date when the lessee has settled all debts as determined by the Agreement and, in the case of an operational leasing agreement, returned the leased object in the condition determined by the Agreement. (6) If, when returning the security instruments within the timeframes and in the manner determined by this Article, the lessee does not receive the security instruments, and the leasing provider has returned them in accordance with the contractual provisions (e.g., direct delivery, delivery via registered mail with return receipt which is returned to the leasing provider due to non-receipt, etc.), the leasing provider has the right to cancel and physically destroy the security instruments, for which it is obliged to prepare an appropriate official note.

Amount of Participation in the Total Value of the Leased Object
Article 10.
The financial leasing agreement, in accordance with Article 52, paragraph 2, point 1 of the Act, must contain a provision on the amount of participation in the total value of the leased object, which represents a monetary amount by which the lessee participates in financing the leased object in a financial leasing agreement, for which amount the base for calculating the installment of the financial leasing agreement is reduced and which is not returned to the lessee upon the termination of the contractual relationship.

By Article 4 of the Regulation on Amendments and Supplements to the Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates (NN No. 86/18), which entered into force on October 4, 2018, the word "monthly" was deleted in paragraph 2 of Article 11:
Amount, Number, and Payment Deadlines of Individual Installments
Article 11.
(1) The financial leasing agreement, in accordance with Article 52, paragraph 2, point 2 of the Act, must contain a provision on the amount, number, and payment deadlines of individual installments, which must be presented in the form of a repayment schedule that is an integral part of the Agreement. (2) If, at the time of concluding the financial leasing agreement, the payment deadlines for leasing installments are not known, the leasing provider is obliged to make the payment deadlines for leasing installments determinable in the repayment schedule, and upon the handover of the leased object, is obliged to determine them and serve them to the lessee.

Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates - Unofficially Cleaned Text (NN, No. 66/14 and 86/18) (3) The financial leasing agreement must also contain the amount of the part of the total value of the leased object which, in the event of the lessee exercising the purchase option upon the regular expiration of the financial leasing agreement, represents the buyout value of the object.

By Article 5 of the Regulation on Amendments and Supplements to the Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates (NN No. 86/18), which entered into force on October 4, 2018, Article 12 is amended by adding the word "amount" after the word "contain", replacing the word "residual" with the word "residual's", and deleting the word "monthly":
Residual Value of the Leased Object
Article 12.
The operational leasing agreement must, in accordance with Article 52, paragraph 3, point 2 of the Act, contain the amount of the residual value of the leased object, which represents the value of the leased object determined by agreement upon the expiration of the term of the operational leasing agreement, which affects the calculation of the installment amount.

Other Contractual Provisions
Article 13.
In addition to the data from Article 4 of this Regulation, the Agreement may contain other provisions by which the contracting parties regulate their relations, which must be in compliance with positive legal provisions that leasing providers are obliged to apply in their business operations.

By Article 6 of the Regulation on Amendments and Supplements to the Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates (NN No. 86/18), which entered into force on October 4, 2018, Article 14 was amended:
Effective Interest Rate
Article 14.
(1) The financial leasing agreement must contain the effective interest rate.
(2) Exceptionally from paragraph 1 of this Article, a financial leasing agreement concluded with a lessee who is not a consumer does not have to contain a provision on the effective interest rate.
(3) The leasing provider is obliged to calculate the effective interest rate from paragraph 1 of this Article for a financial leasing agreement concluded with a consumer according to the methodology prescribed by the law regulating consumer credit.

Transitional and Final Provisions
Article 15.
(1) This Regulation enters into force on the eighth day from the date of publication in "Narodne novine".

Regulation on the Content and Form of Leasing Agreements and the Methodology for Calculating Effective Interest Rates - Unofficially Cleaned Text (NN, No. 66/14 and 86/18) (2) With the entry into force of this Regulation, the Regulation on the Method and Method of Calculating the Amount of Total Fees for Operational Leasing Agreements ("Narodne novine" No. 46/07) and the Regulation on the Method and Method of Calculating the Real Annual Interest Rate for Financial Leasing Agreements ("Narodne novine" No. 42/07) cease to be valid.

CHAIRMAN OF THE BOARD OF DIRECTORS
Dr. sc. Ante Žigman