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May 2007

Clubs are advised to say "No" to Leasing

I have become increasingly concerned by reports received from a number of Clubs in respect of leasing arrangements which they have entered into for
equipment ranging from door entry systems and tills to CCTV cameras, screens and projectors and even major air conditioning work.

There are many companies in existence, none of which is endorsed by this Association, which are in the business of providing equipment to Clubs on lease arrangements. The information supplied by these companies often looks attractive and the sales personnel employed are mostly smart and personable. However, the fact is that most offers, whilst at a glance might appear attractive, ultimately involve complex leasing contracts which run for many years and sometimes incorporate automatic renewable terms in the event of cancellation notices not being provided by Clubs within a specified time slot.

Recent cases include Clubs which have ended up paying in the region of £23,000 for a simple door entry system, and in one case, a Club in South Wales which I assisted recently the Club calculated that £48,000 had been spent over ten years on a door entry system which was no longer being used.

In each case, the leasing contracts were legally binding and left no escape route for the Clubs concerned.

This Association strongly advises Clubs not to enter into leasing arrangements for such equipment, however plausible the offers may appear to be. Glossy brochures and smart-talking sales men and women cannot hide the fact that Clubs needing any of the equipment being advertised would be better off buying outright (with perhaps an additional simple maintenance agreement), or borrowing the money from a Bank to purchase outright what is required.

I would suggest that all Clubs with such agreements in place re-examine the contracts that have been entered into and make careful notes as to when
cancellation notices should be made. Also avoid agreeing to offers of upgrading lease equipment already in place which invariably create new contract terms.

Clubs will be aware that the ACC plays an active role in Committee of Registered Clubs Association (CORCA) of which I am the Chairman. This important matter has been raised at recent meetings of CORCA and all of the organisations involved are agreed to conduct a campaign to ensure that Clubs do not become involved with such leasing agreements.

Leasings work on a Hire Purchase system Equipment

will never ultimately belong to the Club. In almost every case, companies selling the equipment use a separate finance company which actually owns the equipment and it is this finance company which a Club will have to deal with if there are problems with either the equipment or the lease.

Experience has shown that when problems occur, the companies which sell the equipment to Clubs no longer wish to be involved and Clubs are left to defend themselves against finance companies which are always quick to threaten legal action in an aggressive manner introducing additional financial penalties which add further financial costs and often anxiety to Club Officers.