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The Finance Leasing Act: your rights if you fall behind

What a lessor must do before taking back leased equipment, and what you owe, read from the Act’s own text.

Read from the official page on 14 October 2026

In short

  • Before a lessor can demand accelerated payment or end a lease, it must send a registered-post notice giving you at least 7 days from receipt to fix the default (section 21).
  • A lessor may take the equipment back only if no one resists. If there is resistance, it must go to the District Court (sections 27 and 28).
  • You have 14 days after being served with the court’s interim order to show cause why it should not be made permanent (section 28).
  • Once you accept the equipment the lease terms are binding and you must keep paying (section 14).
  • The lease itself can switch off most of these rules, so read your contract. Sections 11, 16, 22 and 24 cannot be contracted out (section 31).

What the Act covers

The Finance Leasing Act, No. 56 of 2000, regulates finance leasing businesses and sets out the rights and duties of lessors, lessees and suppliers of equipment. The text here is the Central Bank’s consolidated version containing the text up to 31 December 2006. Later amendments may apply, so check the current law.

Your duties as a lessee

  • Look after the equipment, use it for the purpose it was provided for, and keep it in the condition it was delivered in, apart from fair wear and tear (section 12).
  • Keep to the lease terms once you have accepted the equipment, including the payments (section 14).
  • Not hand the right to possess and use the equipment to anyone else without the lessor’s written permission (section 25).
  • Return the equipment at the end of the lease unless you have a right to buy it or keep it for longer (section 15).

Your rights as a lessee

  • A right to the undisturbed and peaceful possession of the equipment, which the lessor must protect, unless you have lost it through your own act or omission (section 11).
  • If the equipment is late or does not match the supply agreement, you can reject it and end the lease (section 13).
  • The lessor’s damages claim cannot cover loss it could have avoided with due diligence (section 23).

If you fall behind

If you substantially fail to keep the lease terms, the lessor may require accelerated payment where the lease provides for it, or end the lease and recover the equipment and damages (section 20). But first it must send you a notice by registered post that states the failure and gives a date at least 7 days after you receive it to remedy it. Only if you do not remedy the failure, or give a reasonable cause, can it act (section 21).

Repossession

A lessor entitled to recover the equipment may tell the police station for the area where it is found, ask for a police officer’s help to prevent a breach of the peace, and take it back only if it can do so without resistance from the person holding it (section 27). If it fails, or thinks that is impracticable, it must apply to the District Court by petition and affidavit with a certified copy of the lease. The court may make an interim order, which becomes permanent unless you show sufficient cause within 14 days of being served (section 28). The court may also order payment of money due under the lease (section 29). These powers are in addition to any other legal remedy of the lessor (section 30).

Read your contract

The parties to a finance lease may agree in the lease that most of this Part of the Act does not apply, except for sections 11, 16, 22 and 24 (section 31). Check what your lease says before you rely on the protections above, and if a lessor takes equipment by force you can report it to the police and take legal advice.

A note

This page is general information, not legal advice. For your own case, speak to a lawyer or the office named above.

Frequently asked questions

Can a leasing company take my vehicle without a court order?

Only if it can recover possession without resistance from the person holding it. If there is resistance, or it cannot practically take it back, the Act requires an application to the District Court (sections 27 and 28).

How much notice must a lessor give before ending my lease?

A notice by registered post that names the failure and gives a date at least 7 days after you receive it for you to fix it (section 21).

How long do I have to challenge a court order?

Fourteen days from being served with the interim order to show cause why it should not be made permanent (section 28).

Can I sell or hand over a leased vehicle?

Not without the lessor’s written permission, as you must not transfer the right to possess and use the equipment (section 25).

Does this apply to hire purchase?

This page covers the Finance Leasing Act only. Ask the lender or a lawyer which law your agreement falls under.

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