Negotiating The End of The Lease :

A Bay Area law firm entered into a $175,000 lease three years ago for a computer system.  At the end-of-term they were given several options, one of which was to purchase the equipment for a fair market value of approximately $15,000.  All the firm had to do was to provide us with a copy of the lease proposal and the lease schedule.  We were able to ascertain that only about $70,000 of the transaction was equipment and that the soft costs had been priced at a higher rate, anticipating no value at lease end.  We prepared the counter-offer on behalf of the firm and negotiated with the lessor for a cost reduction.  The lessor agreed to reduce the purchase cost to below $10,000, saving the firm over $5,000 on their lease.

Actually, it wasn't this simple.  We were up against a deadline.  The sales rep that set up the transaction was no longer with the company.  In fact, the company had been sold to a mega-bank and it was tough to find the appropriate department handling the lease, much less a person with authority to deal.  If we didn't respond, in writing, and exercise an option by the end of the week, the lease would automatically renew for a calendar quarter.  At $5,000 per month this meant that the $15,000 paid as the extra rental would not be applied to a purchase.  This was a cost in addition to any option cost.

Anticipating the worse, we arranged for a freight bid on the equipment return option.  We also arranged for an independent appraisal of the equipment and obtained information on the alternative options, like having renewal payments count toward purchase of the equipment.  We asked for and received a short extension of time within which to respond.  We wrote several letters and conducted the entire negotiation process.

While the firm was provided with copies of correspondence, they did not experience any of the aggravation associated with the end-of-lease process.  And, we saved them money.

That's what Stoddard & Associates is all about!