Mitchell Williams routinely serves as legal counsel to state and local government, schools, leasing companies, banks and other lending institutions, in connection with their lease-purchase transactions. Our Municipal and Public Finance Group understands the legal differences between commercial and municipal lease purchase documents and is able to ensure all requirements are met so that lease transactions proceed to a successful closing. The availability of lease financing provides municipalities and schools with access to a broader range of funding sources for capitalized equipment and other purchases. Our team is familiar with the structure and requirements for these transactions, including public notice and hearing, approval, rate, term and bidding requirements.
Lease-purchase financing is a method for a municipality or school district to acquire real property or personal property (such as vehicles and equipment) by paying over its full term a contract for the use and acquisition of the property. The contract might be called a lease, an installment sale agreement or a lease-purchase agreement. The contract must not bind the municipality or school district for a period in excess of that allowed by statute. In many cases the contract is held by a single bank, vendor or other financing institution, rather than sold to a number of investors as is typical with a bond transaction.
Public school districts, in particular, have made extensive use of lease purchase financing for the purpose of acquiring everything from school buses to new athletic facilities. The lease financing structure is a particularly attractive alternative to the often more time consuming, more expensive, and voter-dependent option of issuing bonds. Mitchell Williams regularly serves as counsel to school districts, lenders and investors in public school district lease transactions, and has the expertise to quickly and efficiently navigate the requirements associated with these transactions.
Counsel should be consulted early to assist in determining whether a project qualifies and in assuring that the applicable legal requirements will be met.