16Lease of goods treated as consumer credit contract

1. For the purposes of this Act, a lease is to be treated as a credit sale, a credit contract, and a consumer credit contract if—

2. the lessee is a natural person; and
3. the goods are hired, or intended to be hired, wholly or predominantly for personal, domestic, or household purposes; and
4. when the lease is entered into, the lessor, or one of the lessors, carries on the business of leasing goods (whether or not the business is the lessor's only business or the lessor's principal business), or makes a practice of leasing goods in the course of a business carried on by the lessor; and
5. either or both of the following applies:
   1. the amount payable by the lessee under the lease is substantially equivalent to, or in excess of, the cash price of the goods (whether or not the lessee has an option to purchase the goods):
   2. the lessee has an option to purchase the goods for no additional amount, for a nominal amount, or for an amount substantially below a reasonable estimate (calculated as at the date the lease is made) of the fair market value of the goods at the end of the term of the lease (whether or not the amount payable by the lessee under the lease is substantially equivalent to, or in excess of, the cash price of the goods).

6. For the purposes of subsection (1)(b), the predominant purpose for which the goods are hired is, if the goods are intended to be used for different purposes, the purpose for which the goods are intended to be most used.

7. The reference to intention in subsections (1)(b) and (1A) is a reference to the lessee's intention.

8. For the purposes of this section, the amount payable by the lessee under the lease does not include—

9. any amount payable for optional services or services that are incidental to the hire of the goods; and
10. any amount payable to exercise an option to purchase the goods; and
11. any amount that would cease to be payable on the cancellation of the lease if the lessee were to exercise a right of cancellation at the earliest opportunity.

12. If subsection (1) applies,—

13. the lessor under the lease is to be treated as a creditor; and
14. the lessee under the lease is to be treated as a debtor; and
15. this Act applies with all other necessary modifications as if the lease were a credit sale, a credit contract, and a consumer credit contract.

16. If a lease is to be treated as a credit contract under subsection (1), then, for the purposes of the Financial Service Providers (Registration and Dispute Resolution) Act 2008,—

17. the lease is to be treated as a credit contract; and
18. the lessor under the lease is to be treated as a creditor; and
19. that Act applies with all other necessary modifications as if the lease were a credit contract.