A transaction will usually be a consumer lease if:

• the lease is for a period of 12 months or more where the person taking the lease has an option to purchase the goods being leased; and
• the lessee is an individual (not a company or organisation); and
• the lessee has entered into the contract primarily for personal, domestic or household purposes; and
• the lessor makes a practice of leasing goods or is in the business of leasing goods.

Lessors must give lessees written disclosure of the required information and the terms of the lease.  A lessor must also provide disclosure if the parties agree to change the terms of the lease (unless the change reduces the lessee’s obligations under the contract).

The Act presumes that, if the lessee is an individual, they will have entered into the contract for personal, domestic or household purposes.  A lessor can ask the lessee to give a written declaration that the contract is being entered into for business or investment purposes.  If such a declaration is made correctly many of the Act’s provisions will not apply.

A creditor can charge termination fees for an early termination of a consumer lease if the contract allows it but these fees must be reasonable.