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Securing lien rights on RPA (rental to purchase?

Hi, We are a heavy equipment dealer for Caterpillar and are curious if RPA (rental to purchase) gear fall under the same laws/requirements for rentals as it relates to securing lien rights? Any information you can provide on this, we'd appreciate. Thank you, Brittany Aird

2 replies

Mar 27, 2020

Generally, rent-to -own agreements provide specifically that the title to the equipment remain in the name of the lessor until the purchase price has been fully paid. This means that in the event of nonpayment, the lessor can repossess the equipment from the nonpaying lessee, without needing to record additional claims and file a foreclosure lawsuit. Additionally, it is common for the lessor to be granted a security interest in the lessee’s interest in the leased equipment, and additionally in other collateral and/or proceeds from the lessee's use of the equipment. This is generally because the equipment, once leased, is not designated for use on a particular improvement. However, equipment lessors in California are granted mechanics lien protections, provided that the leased equipment is provided for an authorized work of improvement. Accordingly, to the extent the leased equipment is rented for a specific work, and the required notice, timing, and form requirements are met, the equipment lessor would likely qualify for lien protections.

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Apr 15, 2020

Could you provide the mechanic's lien laws for leased equipment in the states of: WA, OR, MT, WY, and ID

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