{"data":{"id":"us-ok/okla.-stat.-tit.-12a-12a-1-203","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 12A, § 12A-1-203","heading":"Lease distinguished from security interest","body":"Lease Distinguished from Security Interest.\n\n(a) Whether a transaction in the form of a lease creates a\n\nlease or security interest is determined by the facts of each case.\n\n(b) A transaction creates a security interest if the\n\nconsideration that the lessee is to pay the lessor for the right to\n\npossession and use of the goods is an obligation for the term of the\n\nlease not subject to termination by the lessee, and:\n\n(1) the original term of the lease is equal to or greater\n\nthan the remaining economic life of the goods;\n\n(2) the lessee is bound to renew the lease for the\n\nremaining economic life of the goods or is bound to\n\nbecome the owner of the goods;\n\n(3) the lessee has an option to renew the lease for the\n\nremaining economic life of the goods for no additional\n\nconsideration or nominal additional consideration upon\n\ncompliance with the lease agreement; or\n\n(4) the lessee has an option to become the owner of the\n\ngoods for no additional consideration or for nominal\n\nadditional consideration upon compliance with the\n\nlease agreement.\n\n(c) A transaction in the form of a lease does not create a\n\nsecurity interest merely because:\n\n(1) the present value of the consideration the lessee is\n\nobligated to pay the lessor for the right to\n\npossession and use of the goods is substantially equal\n\nto or is greater than the fair market value of the\n\ngoods at the time the lease is entered into;\n\n(2) the lessee assumes risk of loss of the goods;\n\n(3) the lessee agrees to pay, with respect to the goods,\n\ntaxes, insurance, filing, recording, or registration\n\nfees, or service or maintenance costs;\n\n(4) the lessee has an option to renew the lease or to\n\nbecome the owner of the goods;\n\n(5) the lessee has an option to renew the lease for a\n\nfixed rent that is equal to or greater than the\n\nreasonably predictable fair market rent for the use of\n\nthe goods for the term of the renewal at the time the\n\noption is to be performed; or\n\n(6) the lessee has an option to become the owner of the\n\ngoods for a fixed price that is equal to or greater\n\nthan the reasonably predictable fair market value of\n\nthe goods at the time the option is to be performed.\n\n(d) Additional consideration is nominal if it is less than the\n\nlessee’s reasonably predictable cost of performing under the lease\n\nagreement if the option is not exercised. Additional consideration\n\nis not nominal if:\n\n(1) when the option to renew the lease is granted to the\n\nlessee, the rent is stated to be the fair market rent\n\nfor the use of the goods for the term of the renewal\n\ndetermined at the time the option is to be performed,\n\nor\n\n(2) when the option to become the owner of the goods is\n\ngranted to the lessee, the price is stated to be the\n\nfair market value of the goods determined at the time\n\nthe option is to be performed.\n\n(e) The \"remaining economic life of the goods\" and \"reasonably\n\npredictable\" fair market rent, fair market value, or cost of\n\nperforming under the lease agreement must be determined with\n\nreference to the facts and circumstances at the time the transaction\n\nis entered into.","path":["OK Code","Title 12A"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os12A.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"2f837f7ddb27962f2cfe29c7073ce12ba9e02bd45386c60b4bda418e361c1b2f","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-12a-12a-1-202","next":"us-ok/okla.-stat.-tit.-12a-12a-1-204"},"notice":"GroundRules: Original legal text. Not legal advice."}