Operational Lease

Legal Aspects of Operating Lease in Serbia

June 23, 2024

Operational leasing is becoming an increasingly popular choice for businesses and individuals in Serbia seeking a flexible and cost-effective way to use cars without the burdens of owning a vehicle.

In this article we will explain the legal aspects of operational leasing, highlighting relevant laws, rights, and obligations of both the lessee (client) and the lessor (leasing company - BizRent).

Legal Framework for Operational Leasing in Serbia

First, it is important to note that operational leasing in Serbia is primarily regulated by the Law on Obligations, which governs contractual relationships, including leasing agreements.

It is also worth mentioning that the Law on Financial Leasing provides specific regulations for leasing operations but is more focused on financial leasing. For operational leasing, the Law on Obligations is the primary reference law.

Key Legal Provisions Related to Operational Leasing

There are several key legal provisions that regulate operational leasing in Serbia. Here are the most important ones:

Contractual Obligations: The leasing agreement must clearly define the terms, including the duration of the lease, monthly payments, and the responsibilities of both parties. The contract should be in written form for legal certainty.
Vehicle Registration and Insurance: The lessor usually remains the vehicle's registered owner during the lease period. They are responsible for insuring the car, although the lessee may be required to cover certain insurance costs as stipulated in the contract.
Maintenance and Repairs: The leasing agreement should specify who is responsible for the maintenance and repair of the vehicle. Generally, the lessor handles regular maintenance and repairs, while the lessee is responsible for damage caused by negligence or misuse.

Rights of the Lessee

Lessees have certain rights clearly defined by the leasing agreement. It is important to be aware of the following:

Right to Use the Vehicle: The lessee has the right to use the vehicle for the agreed period and for the purposes specified in the leasing agreement, including any mileage and geographical restrictions.
Right to a Technically Sound Vehicle: The lessee has the right to receive a technically sound vehicle that meets all safety standards.
Right to Information: The lessee has the right to be informed about all the terms of the agreement, including details on maintenance, insurance, and additional costs.

Obligations of the Lessee

Lessees also have certain obligations they must adhere to in order to avoid legal issues:

Obligation to Pay Installments: The lessee must make regular monthly payments as per the agreement. Failure to pay installments can result in penalties or the termination of the leasing agreement.
Responsibility for Proper Use: The lessee is required to use the vehicle in accordance with the agreement, complying with all traffic laws and ensuring the vehicle is not used for unauthorized purposes.
Responsibility for Damage: The lessee must take care of the vehicle. They are responsible for any damage beyond normal wear and tear, which may include covering repair costs or paying additional fees.

Rights of the Lessor

Lessors have their own rights that are crucial for the successful execution of the leasing agreement. Here is what is important:

Right to Collect Payments: The lessor has the right to collect all costs stipulated in the agreement, including monthly payments and any additional fees.
Right to Vehicle Repossession: The lessor has the right to demand the return of the vehicle in case of non-payment or violation of the contractual terms by the lessee.
Right to Terminate the Agreement: The lessor has the right to terminate the agreement if the lessee breaches the terms, such as by failing to make payments or by using the vehicle improperly.

Obligations of the Lessor

Lessors also have obligations they must fulfill to ensure quality service:

Provision of the Vehicle: The lessor must provide a vehicle that is in good condition and meets the specifications outlined in the agreement.
Maintenance and Repairs: The lessor is generally responsible for regular maintenance and repairs. They must ensure the vehicle is safe and compliant with all legal requirements.
Vehicle Insurance: The lessor must provide insurance for the vehicle that covers liabilities such as third-party damage. The details of the insurance must be clearly stated in the leasing agreement.

What If Disagreements Arise?

In the event of a dispute between the lessee and the lessor, the leasing agreement should contain a clause that defines the conflict resolution process. This clause can include several steps:

Negotiations: The first step is to attempt to resolve the dispute through direct negotiations between the lessee and the lessor. This allows the parties to present their positions and try to reach an agreement without the additional costs and time required for formal procedures.
Mediation: If negotiations fail, the next step may be mediation. Mediation involves engaging a neutral third party (mediator) to help the parties reach an agreement. Mediation is an informal procedure that allows for creative solutions that may be acceptable to both parties.
Arbitration: If mediation does not lead to a resolution, the parties may decide to resolve the dispute through arbitration. Arbitration is a more formal process in which a neutral arbitrator makes a decision that is binding on both parties. Arbitration is often quicker and less expensive than a court proceeding but requires both parties to agree to accept the arbitrator's decision.
Court Proceedings: As a last resort, if none of the previous methods lead to a resolution, the parties may initiate court proceedings. Court proceedings are the most formal way of resolving a dispute and can be lengthy and expensive but provide a final resolution based on the law.

These steps should be clearly defined in the leasing agreement to ensure a structured approach to dispute resolution and to minimize the potential for conflict escalation.

For a Positive Leasing Experience - Choose BizRent!

When using operational leasing, it is important to be well-informed about all legal aspects to avoid stress and unpleasant surprises. If you are using operational leasing services for the first time and want a reliable and hassle-free service, choose BizRent!

With a wide selection of vehicles, transparent terms, and excellent customer support, we are your ideal partner for the operational leasing of cars in Serbia. Your safety and satisfaction are our top priority!