Subscription or Rental Agreements

[Cudds]

Hi all,

I'm a newb and have spent the last hour having a few fascinating reads on the forum.

I stumbled upon theforumsa.co.za whilst Googling the credit act and its many regulations. It's a financial minefield out there and after tip-toeing around a few chaotic websites offering the act verbatum, I followed a link, which I'm pleased to say, has me engrossed and unable to continue with a project that is already way past deadline. Ho-hum....

I could ramble on for many more paras but I came here for an answer to a question, and I have a good feeling that someone out there is going to save me hours of trawling through (mis)information on the web.

My question:
Does a business that provides a fixed term monthly subscription service, with the option of purchase or automatic ownership of the product after the agreed subscription term, need to be registered with the NCR?

I think it may be termed a sort of rent-to-own agreement?

Thank you, oh clever ones, in anticipation of some solid financial advice ;-)

regards

[Dave A]

Best to rent it and have an agreed sale price for the article at the end, even if it is only the equivalent of one month's rent

EDIT: More detail...
What you want is to avoid terminology that structures the deal as a financial lease or a hire purchase agreement, otherwise you will have to register.

Don't refer to interest rate fluctuations.
Do have inflation related or preset annual escalations.

Don't have early exit penalties related to settlement values.
Do have early exit clauses that refer to loss of profit for failing to fulfil the full term of the contract.

I don't know what business you are in exactly. But to make sure when it comes to our rentals, we stick to clients that don't qualify for NCA protection.