Question:

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Ken,

    My company is looking for a Lease contract with the option to buy, I am using your standard lease contract now but we have an opportunity to sell a significant number of Radio Transmitters on a lease to own basis.  Please let me know if you can help me.

Thank you.

Bryan

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Answer:

    Why would a subscriber want to own a radio which would be useless unless it was able to communicate?  Any communication would require a monthly charge for that service.

    That issue aside, none of my Standard Form lease agreements [ and there are several including commercial, residential, CCTV Supervisory and others ] provide for a purchase option.  Adding a purchase option changes the dynamics of the transaction and might invoke Federal Truth and Lending Law provisions which are not provided for in the contracts.  For example the Truth and Lending Law requires various notices and calculations for interest and total payments.  www.kirschenbaumesq.com/alarm2.htm

    A lease with purchase option is a sale with interest factored in, and I don't think it's easy [or possible] to avoid that issue. 

    The closest deal I can come up with is you agreeing to abandon your equipment once the subscriber completes the full term of your lease.  This sounds a lot like a sale with the one dollar option so I am not a fan of this.

    I do offer what I refer to as a "free system".  That includes a waiver of the installation and purchase price provided the subscriber completes the monitoring contract.  If the monitoring contract is breached then the subscriber has to pay a percentage of the waived purchase price.  This is accomplished with a Sales and Monitoring contract, available on request - you have to call Eileen at 516 747 6700 x 212.  Price is same as Sales and Monitoring at www.kirschenbaumesq.com/alarm2.htm