A lessor may take additional security in the assets of the lessee’s small business.

 The lessor may release any additional security if the capital lease is in good standing.

Guarantees and Suretyships

  •  (1) A lessor may, in addition to the forms of security referred to in sections 23 and 24, take one or more unsecured personal guarantees or suretyships for an amount that does not exceed the aggregate of

    • (a) 25% of the total financing amount of the capital lease,

    • (b) the interest on any judgment against the surety,

    • (c) taxed costs for, or incidental to, legal proceedings against the surety, and

    • (d) legal fees and disbursements, other than the costs referred to in paragraph (c), and other costs incurred by the lessor for services rendered by persons other than their employees for the purpose of legal proceedings against the surety.

  • (2) If a lessor takes more than one personal guarantee or suretyship, they shall state that the aggregate liability of the sureties may not exceed the aggregate amount referred to in subsection (1).

 A lessor may, in addition to any security or guarantee or suretyship referred to in sections 23, 24 and 26, take one or more secured or unsecured corporate guarantees or suretyships.

 A lessor may release a guarantor or surety from a guarantee or suretyship only if a capital lease is in good standing and the lessee has paid at least 50% of the total financing amount of the capital lease.

 A lessee may, at any time with the consent of the lessor, replace a guarantee or suretyship with security in any assets of the small business or with another guarantee or suretyship, if the value of the replacement security, guarantee or suretyship is equal to or greater than the value of the original guarantee or suretyship but does not exceed the maximum provided for in section 26.

Non-Compliance

  •  (1) The Minister is not liable to make any payment to a lessor in respect of any loss sustained as a result of lessees’ defaults on all capital leases entered into by the lessor, if the lessor has not paid the administration fee referred to in subsection 14(2).

  • (2) Despite subsection (1), the Minister shall pay to the lessor the amount of any eligible loss, calculated in accordance with subsection 44(7), sustained as a result of lessees’ defaults on all capital leases entered into by the lessor if

    • (a) the non-compliance is inadvertent; and

    • (b) the administration fee is paid within 90 days after the day on which notice of the non-compliance from the Minister is received at the place of business of the lessor.

  •  (1) The Minister is not liable to make any payment to a lessor in respect of any loss sustained as a result of a lessee’s default on a capital lease if

    • (a) the capital lease provides for a matter referred to in section 4;

    • (b) the due diligence requirements referred to in section 19 are not met;

    • (c) the requirements under section 23 are not met; or

    • (d) the requirements under paragraph 44(4)(a) are not met.

  • (2) Despite subsection (1), if the non-compliance referred to in any of paragraphs (1)(a) to (d) is inadvertent, the Minister shall pay to the lessor the amount of any eligible loss, calculated in accordance with subsection 44(7), sustained on the portion of the total financing amount of the capital lease that relates to equipment and that is in compliance with these Regulations.

  • SOR/2006-272, s. 3.
  •  (1) The Minister is not liable to make any payment to a lessor in respect of any loss sustained as a result of a lessee’s default on a capital lease if the requirements set out in sections 26 to 29 in respect of guarantees or suretyships are not met in respect of the capital lease.

  • (2) Despite subsection (1), the Minister shall pay to the lessor the amount of any eligible loss, calculated in accordance with subsection 44(7), sustained as a result of a lessee’s default on a capital lease if

    • (a) the non-compliance is inadvertent and the loss was not affected by it; and

    • (b) the aggregate amount recovered from the realization of personal guarantees and suretyships, if any, does not exceed the aggregate of the amounts referred to in paragraphs 26(1)(a) to (d).

  •  (1) The Minister is not liable to make any payment to a lessor in respect of any loss sustained as a result of a lessee’s default on a capital lease, if

    • (a) the term of the capital lease is longer than the maximum period specified in section 5 or the period approved under subsection 21(2);

    • (b) a fee or charge is payable, other than a fee or charge referred to in section 13, 14 or 16; or

    • (c) the annual imputed rate of interest used to calculate the scheduled payments in respect of the capital lease is greater than the maximum annual imputed rate of interest referred to in section 15.

  • (2) Despite subsection (1), the Minister shall pay to the lessor the amount of any eligible loss, calculated in accordance with subsection 44(7), sustained as a result of a lessee’s default on a capital lease if

    • (a) the non-compliance is inadvertent and the loss was not affected by it; and

    • (b) the lessor has reimbursed the lessee for any resulting overcharges and has otherwise remedied the non-compliance.

 Despite section 41, if a lessor does not provide a report as required by section 40 until after the time required by that section and the non-compliance is inadvertent, the Minister, after receiving the report, shall pay to the lessor the amount of any eligible loss, calculated in accordance with subsection 44(7), sustained as a result of a lessee’s default on a capital lease to which the report relates.

  • SOR/2006-272, s. 4(E).

Transfer of Capital Leases at the Request of the Lessee

  •  (1) When a capital lease is transferred by a lessor to another lessor at the request of the lessee, the parties to the transfer shall notify the Minister of the transfer in the form referred to in subsection (4).

  • (2) After the transfer referred to in subsection (1), the Minister is liable to pay to the transferee the amount of any eligible loss, calculated in accordance with subsection 44(7), sustained as a result of a lessee’s default on the capital lease if

    • (a) the Minister’s liability under section 7 in relation to the remaining capital leases of the transferor does not, as a result of the transfer, exceed the amount already paid by the Minister to the transferor, if any; and

    • (b) the total number of capital leases transferred by the transferor under this section, for the duration of these Regulations, does not exceed the greater of 20 and 1% of the number of capital leases entered into by the transferor during that period.

  • (3) The Minister shall determine whether the requirements set out in subsection (2) have been met and shall notify both lessors of the determination.

  • (4) The lessee and both the transferor and transferee shall sign a form which includes the registration number assigned to the capital lease by the Minister and the lessee’s acknowledgement that the lessee requested the transfer.

  • (5) A transfer of a capital lease shall be registered or published in accordance with applicable provincial law.

  • SOR/2006-272, s. 5(F).

Transfer of Capital Leases for the Purpose of Lease Funding

  •  (1) When a capital lease is transferred by a lessor to another lessor for the purpose of lease funding, both lessors shall notify the Minister of the transfer in the form referred to in subsection (4).

  • (2) After the transfer referred to in subsection (1), the Minister is liable to pay to the transferee the amount of any eligible loss, calculated in accordance with subsection 44(7), sustained as a result of a lessee’s default on the capital lease, if the Minister’s liability under section 7 in relation to the remaining capital leases of the transferor does not, as a result of the transfer, exceed the amount already paid by the Minister to the transferor, if any.

  • (3) The Minister shall determine whether the requirements set out in subsection (2) have been met and shall notify both the transferor and transferee of the determination.

  • (4) The transferor and the transferee shall sign a form which includes the registration number assigned to the capital lease by the Minister.

  • (5) A transfer of a capital lease for the purpose of lease funding shall be registered or published in accordance with applicable provincial law.

Amalgamation of Lessors

  •  (1) When two or more lessors intend to amalgamate to form a new lessor, they shall notify the Minister in writing of their intention to amalgamate and of the day on which the amalgamation is proposed to take effect.

  • (2) On amalgamation, the Minister is liable to pay to the new lessor the amount of any eligible loss, calculated in accordance with subsection 44(7), sustained as a result of lessees’ defaults on all capital leases entered into by the lessor and

    • (a) any capital leases entered into by the amalgamating lessors are considered to have been entered into by the new lessor;

    • (b) claims for loss sustained in respect of capital leases that were paid by the Minister to each of the amalgamating lessors are considered to have been paid to the new lessor; and

    • (c) if, as a result of the amalgamation, the amount already paid by the Minister to the amalgamating lessors as a result of the Minister’s liability under section 7 is greater than the Minister’s liability in respect of the new lessor, the Minister’s liability is deemed to be equal to the amount already paid.

 
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