Court Opinion

ID: 3789939
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:37:56.431405+00
Date Added: 2024-06-11T09:23:24.155335
License: Public Domain

LEASE PURCHASE — INTEREST PAYABLE The interest payable under a lease-purchase contract can be paid only at the end of the lease-purchase contract after the governmental unit involved has paid all the required monthly payments.  The Attorney General has considered your request for an opinion on the following question submitted in your letter of October 15, 1971: "Can the interest on a lease-purchase contract of a County Commissioner for equipment be paid to the bank at regular intervals during the term of the contract, or must it be paid at the end of the contract?'" This question has been touched upon indirectly in Attorney General Opinion dated June 3, 1959, directed to John M. Rogers, State Examiner and Inspector. A copy of this opinion is enclosed.  Title 62 O.S. 430.1 [62-430.1] (1970) states in part: "The Board of County Commissioners of any County, the governing board of any city or town, the School District Board or Board of Education of any school district, is hereby authorized to rent on a monthly basis, . . . and to pay the rental charges thereon for usage during any fiscal period, or portion thereof, have appropriations made and approved for such purposes for, or during, such fiscal year. . . . The payment for the lease and/or rental of buildings, machinery and equipment . . . and no appropriation for the purpose of paying rentals on buildings or machinery and equipment shall be transferred or diverted to any other purpose." (Emphasis added) Title 62 O.S. 430.3 [62-430.3] (1971) states in part: ". . . Rental and revitalization of such rental or lease agreement for an ensuing fiscal year, or lesser limitation period, may be asserted and ratified, provided all monthly rentals to the end of the previous fiscal year have been fully paid, . . ." (Emphasis added) These provisions in the above cited statutes refer to such terms as "rental charges", "payment for lease and/or rental", "paying rentals", "monthly rentals". The use of these terms along with the provisions in Section 62 O.S. 430.1 [62-430.1] which states: ". . . And in no event shall the lease be extended so as to cause payment of more than the original purchase price of the buildings or equipment plus interest . . ." indicate that it was the legislative intent to hold off payment of the interest until the rental payment had been paid in full.  In addition, the above quoted language in Section 430.1 which states that an appropriation for the purpose of paying rentals on buildings, machinery and equipment cannot be transferred or diverted to any other purpose.  Otherwise, in the event the agreement terminated or expired before the full amount had been paid, the governmental unit involved would be paying interest on the rent only. We do not feel the Legislature intended for this to ever occur.  It is therefore the opinion of the Attorney General that Attorney General Opinion dated June 3, 1959, mentioned above, be affirmed and that your question be answered as follows: The interest payable under a lease-purchase contract can be paid only at the end of the lease purchase contract after the governmental unit involved has paid all the required monthly payments.  (Todd Markum)