Louisiana Notary

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Lease

Lease – Inapplicability to lease of immovables

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Lease – Inapplicability to lease of immovables

§3304. Exclusions. A. This Chapter shall not apply to leases of immovable property. This Chapter shall, however, continue to apply to leases of movable property which subsequently becomes a component part of an immovable or which are immobilized by declaration as provided under Articles 466 and 467 of the Louisiana Civil Code, in which case the lessor shall retain all legal rights to and ownership of the leased equipment notwithstanding its immobilization. This Chapter shall also continue to apply to leases of equipment which are subsequently incorporated into other movable property not otherwise subject to the lease, in which case the lessor shall retain all legal rights to and ownership of the leased equipment notwithstanding Article 510 of the Louisiana Civil Code.

B. This Chapter shall not apply to leases of incorporeal movables or licenses of contractual or proprietary rights, such as licenses for the use of computer software,trade names, copyrights, or franchises.

§3310. Financed leases. A. Except as specifically provided in this Chapter, financed leases are subject to Title IX of Book III of the Civil Code entitled “Lease.” Financed leases entered into after Chapter 9 of the Louisiana Commercial Laws becomes effective are a type of secured transaction in favor of the lessor, and thus are additionally subject to R.S. 10:9-101, et seq.

B. Notwithstanding the fact that a financed lease creates a security interest under Chapter 9 of the Louisiana Commercial Laws, the lessor under a properly perfected financed lease shall retain full legal and equitable title and ownership in and to the leased equipment until such time as the lessee exercises his option or complies with his obligation to purchase the leased equipment from the lessor as provided under the lease agreement. The provisions of this Chapter shall further not affect present taxation of financed leases.

Lease – True lease

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Lease – True lease

§3309. True leases. Except as specifically provided in this Chapter, true leases are subject to Title IX of Book III of the Civil Code entitled “Of Lease.”

§3306. Definitions. (26)(a) “True lease” means a lease entered into before January 1, 1990, under which:

(i) The lessee has no obligation to pay total compensation over the base lease term which is substantially equivalent to or in excess of the initial value of the leased property; or

(ii) The lessee does not have the option or obligation to become the owner of the leased property upon termination of the lease for no or nominal consideration.

(b) A true lease also means a lease entered into after January 1, 1990, that is not classified as a security interest as provided under R.S. 10:1-201(35).

(c) Consistent with R.S. 10:9-505, the filing of a financing statement by a lessor under a true lease shall not of itself result in such a lease being classified as a financed lease for purposes of this Chapter or otherwise.

Lease – Leases with an indeterminate term

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Lease – Leases with an indeterminate term

Art. 2727. Termination of lease with an indeterminate term. A lease with an indeterminate term, including a reconducted lease or a lease whose term has been established through Article 2680, terminates by notice to that effect given to the other party by the party desiring to terminate the lease, as provided in the following Articles.

Art. 2728. Notice of termination; timing. The notice of termination required by the preceding Article shall be given at or before the time specified below:

(1) In a lease whose term is measured by a period longer than a month, thirty calendar days before the end of that period;

(2) In a month-to-month lease, ten calendar days before the end of that month;

(3) In a lease whose term is measured by a period equal to or longer than a week but shorter than a month, five calendar days before the end of that period; and

(4) In a lease whose term is measured by a period shorter than a week, at any time prior to the expiration of that period.

A notice given according to the preceding Paragraph terminates the leas; at the end of the period specified in the notice, and, if none is specified, at the end of the first period for which the notice is timely.

Art. 2729. Notice of termination; form. If the leased thing is an immovable or is a movable used as residence, the notice of termination shall be in writing. It may be oral in all other cases. In all cases, surrender of possession to the lessor at the time at which notice of termination ·shall be given under Article 2728 shall constitute notice of termination by the lessee.

 

Lease – Leases with a fixed term

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Lease – Leases with a fixed term

Art. 2720. Termination of lease with a fixed term. A lease with a fixed term terminates upon the expiration of that term, without need of notice, unless the lease is reconducted or extended as provided in the fol­lowing Articles.

Art. 2721. Reconduction. A lease with a fixed term is reconducted if, after the expiration of the term, and without notice to vacate or terminate or other opposition by the lessor or the les­see, the lessee remains in possession:

(1) For thirty days in the case of an agricultural lease;

(2) For one week in the case of other leases with a fixed term that is longer than a week; or

(3) For one day in the case of a lease with a fixed term that is equal to or shorter than a week.

Art. 2722. Term of reconducted agricultural lease. The term of a reconducted agricultural lease is from year to year, unless the parties intended a different term which, according to local custom or usage, is observed in leases of the same type.

Art. 2723. Term of reconducted nonagricultural lease. The term of a reconducted nonagricultural lease is:

(1) From month to month in the case of a lease whose term is a month or longer;

(2) From day to day in’ the case of a lease whose term is at least a day but shorter than a month; and

(3) For periods equal to the expired term in the case of a lease whose term is less than a day.

Art. 2724. Continuity of the reconducted lease. When reconduction occurs, all provisions of the lease continue for the term provided in Article 2722 or 2723. A reconducted lease is terminated by giving the notice directed in Articles 2727 through 2729.

Art. 2725. Extension If the lease contract contains an option the term and the option is exercised, the lease continues for the term and under the other provisions stipulated in the option.

Art. 2726. Amendment. An amendment to a provision of the lease contract that is made without an·intent to effect a novation does not create a new lease.

Lease – Breach of contract

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Lease – Breach of contract

Art. 2719. Dissolution for other causes. When a party to the lease fails to perform his obligations under the lease or under this Title, the other party may obtain dissolution of the lease pursuant to the provisions of the Title of “Conventional Obligations or Contracts”.

Lease – Contracts with reservation of right to terminate lease

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Lease – Contracts with reservation of right to terminate lease

Art. 2718. Leases with reservation of right to terminate. A lease in which one or both parties have reserved the right to terminate the lease before the end of the term may be so terminated by giving the notice specified in the lease contract or the notice provided in Articles 2727 through 2729, which ever period is longer. The right to receive this notice may not be renounced in advance. In all cases, surrender of possession to the lessor at the time at which notice of termination shall be given under Article 2728 shall constitute notice of termination by the lessee.

Lease – Loss, destruction, expropriation

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Lease – Loss, destruction, expropriation

Art. 2714. Expropriation; loss or destruction. If the leased thing is lost or totally destroyed, without the fault of either party, or if it is expropriated, the lease terminates and neither party owes damages to the other.

Revision comments-2004 (b) If the loss or destruction is total, or if the whole thing is expropriated, then under Civil Code Article 2714 (Rev. 2004), the lease terminates, regardless of whether the events that brought about the loss or destruction are attributable to the fault of either party. Although this Article contains the phrase “without the fault of either party,” that phrase addresses the parties’ right to claim damages. That is, if the loss or destruction was not attributable to the fault of either party, then neither party owes damages to the other.” Conversely, if the loss or destruction was attributable to the fault of one party then, of course, that party would owe damages to the other, but the lease would also terminate for the simple reason that the destruction of the whole object of the contract renders performance impossible. C£ C.C. art. 1876 (Rev. 1984).

Art. 1876. Contract dissolved when performance becomes impossible When the entire performance owed by one party has become impossible because of a fortuitous event, the contract is dissolved. The other party may then recover any performance he has already rendered.

Art. 2715. Partial destruction, loss, ,expropriation, or other substantial impairment of use. If, without the fault of the lessee, the thing is partially destroyed, lost, or expropriated, or its use is otherwise substantially impaired, the lessee may, according to the circumstances of both parties, obtain a diminution of the rent or dissolution of the lease, whichever is more appropriate under the circumstances. If the lessor was at fault, the lessee may also demand damages. If the impairment of the use of the leased thing was caused by circumstances external to the leased thing, the lessee is entitled to a dissolution of the lease, but is not entitled to diminution of the rent.

Lease – Sublease or assignment of rights by lease

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Lease – Sublease or assignment of rights by lease

Art. 2713. Lessee’s right to sublease, assign, or encumber. The lessee has the right to sublease the leased thing or to assign or encumber his rights in the lease, unless expressly prohibited by the contract of lease. A provision that prohibits one of these rights is deemed to prohibit the others, unless a contrary intent is expressed. In all other respects, a provision that prohibits subleasing, assigning, or encumbering is to be strictly construed against the lessor.