ASK
I have a plan to make a loan agreement. I don’t know how this issue is regulated by the law today?
ANSWER
DHP LAW will answer your questions as follows:
A property loan contract is an agreement between parties whereby the lender hands over the property to the borrower for use within a period without having to pay, and the borrower must return the property at the end of the loan term. or the borrowing purpose has been achieved.
The content and provisions of the property loan contract are shown from Article 494 to Article 499 of the 2015 Civil Code, specifically as follows:
The subject matter of the property loan contract
Any non-consumable property can be the subject of a loan agreement.
Obligations of the borrower
- To keep and preserve the borrowed property, not to arbitrarily change the condition of the property; If the property is damaged normally, it must be repaired.
- It may not be lent to another person, without the consent of the lender.
- Return the borrowed property on time; if there is no agreement on the time limit for returning the property, the borrower must return the property as soon as the borrowing purpose has been achieved.
- Compensation for damage, if lost or damaged borrowed property.
- The borrower must bear the risk of the borrowed property during the period of late payment.
Borrower’s rights
- To use the borrowed property in accordance with its intended use and for the agreed purpose.
- Requiring the lender to pay reasonable costs of repairing or increasing the value of the borrowed property, if so agreed.
- Not liable for natural wear and tear of borrowed property.
Obligations of the lessor
- Provide necessary information on the use of the property and its defects, if applicable.
- Payment to the borrower for repair costs, expenses for increasing the value of the property, if there is an agreement.
- Indemnify the borrower for damage if knowing the property has defects without notifying the borrower, leading to damage to the borrower, except for defects known or ought to be known by the borrower.
Rights of the property lender
- Claim the property right after the borrower achieves the purpose if there is no agreement on the loan term; if the lender has an unexpected and urgent need to use the lent property, it may reclaim such property even though the borrower has not yet achieved the purpose, but must give a reasonable notice in advance.
- Claim the property back when the borrower uses it for improper purposes, uses, or in the manner agreed upon, or lends it to another person without the lender’s consent.
- Claim for damage to property caused by the borrower.
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