What should the consumer do if the leasing company indicates the covenant must remain on the lease in the case where someone else takes over the lease?
If your leasing company (the lessor) has that particular draconian policy you can proceed forward keeping the following in mind. • If the new customer’s credit is as good as or better than yours, the leasing company will release you (they will claim on an exception basis). • The bottom line consists of two final points; (1) If the new customer could qualify for a new lease from that leasing company; why would the leasing company want your covenant to remain on the lease and (2) If the leasing company approves the new customer, they would not stand a chance at getting any money from you in court because they (the leasing company) approved the credit of the assignee (define: assignee) originally. This fact is why GMAC and other companies removed that policy. Furthermore, as Lease-Take-Overs become more popular, the other companies will have no choice but to remove this policy – especially for the sake of customer service.
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