STATUTORY INSTRUMENTS

SUPPLEMENT No. 6                                                                              17th February, 2012

STATUTORY INSTRUMENTS SUPPLEMENT

to The Uganda Gazette No. 10 Volume CV dated 17th February, 2012 Printed by UPPC, Entebbe, by Order of the Government.

STATUTORY INSTRUMENTS 2012 No. 6.

THE HIRE PURCHASE REGULATIONS, 2012. ARRANGEMENT OF REGULATIONS

Regulation.

Part I—Preliminary.

1. Title.
2. Interpretation.

Part II-Licensing of Hire Purchase Business

3. Application for a hire purchase licence.
4. Establishing the financial condition of an applicant
5. Licensing
6. Renewal of a hire purchase licence.
7. Suspending or cancelling a hire purchase licence.
8. Appeal to the Minister from the decision of the licensing authority.

Part III—General.

9. Security given by hirer or guarantor shall take effect as security only.
10. Consolidation.
11. Complaints.

Part IV—Rights of Hirer And Provisions Relating to Hired Goods

12. Inspection of the goods by the hirer
13. Declaration of the cash price in respect of the hire purchase goods.
14. Form of the contract of guarantee relating to a hire purchase agreement.
15. Information to be disclosed by parties to a hire purchase agreement.

SCHEDULE 1: Currency Point SCHEDULE 2: Forms SCHEDULE 3: Fees

STATUTORY INSTRUMENTS 2012 No. 6.

The Hire Purchase Regulations, 2012.

(Made under section 36 of the Hire Purchase Act, 2009, Act No. 3 of 2009J

In exercise of the powers conferred on the Minister responsible for

trade by section 36 of the Hire Purchase Act, 2009, these Regulations are

made this 10th day of February, 2012.

Part I—Preliminary.

1. Title.

These Regulations may be cited as the Hire Purchase Regulations, 2012.

2. Interpretation.

In these Regulations unless the context otherwise requires—

“Act” means the Hire Purchase Act, 2009;

“cash price” means the price at which a creditor would have sold the goods to the buyer for cash on the date of the hire purchase agreement;

“company” means a company formed and registered under the Companies Act;

“consolidation” means combining two or more securities in different hire purchase agreements;

“contract of guarantee” in relation to a hire purchase agreement, means a written contract, made at the express or implied request of the hirer, to guarantee the performance of the hirer’s obligations under the hire purchase agreement.

“currency point” has the meaning assigned to it in Schedule 1;

“delivery” means voluntary transfer of possession from one person to another;

“goods” includes all chattels, personal, other than things in action and money and all emblements, industrial growing crops and things attached to or forming part of land which are agreed to be severed before sale or under the contract of sale;

“guarantor” means a person who agrees to perform the hirer’s obligations in case the hirer defaults under a hire purchase agreement;

“hire purchase agreement” means an agreement for the bailment of goods under which the bailee may buy the goods or under which the property in the goods will or may pass to the hirer;

“licensing authority” means the Commissioner for Internal Trade as declared in the Hire Purchase (Declaration of Licensing Authority) Order, 2011;

“Minister” means the Minister responsible for trade;

“owner” means a person who hires goods to a hirer under a hire purchase agreement, and includes a person to whom the property in the goods of the owner or any of the rights or liabilities of the owner under the agreement have passed by assignment or operation of law.

Part II—Licensing of a Hire Purchase Business

3. Application for a hire purchase licence.

1. An application for a hire purchase licence shall state—

1. the name, the telephone and the fax numbers, the postal, the email and the physical addresses of the company;
2. the tax identification number and the date of registration of the company;
3. the place where the company carries on or proposes to carry on a hire purchase business;
4. the directors of the company and their qualifications;

4. Sub regulation (3) (a) and (c) shall not apply to a company incorporated in the year in which it applies for a hire purchase licence.
5. The application fees prescribed in Schedule 3.
6. An application for a hire purchase licence shall be in Form 1 as specified in Schedule 2.

4. Establishing the financial condition of an applicant.

For the purposes of determining the financial condition of an applicant under section 20 (5) of the Act and regulation 5, the licensing authority shall be guided by—

1. the share capital of the company as disclosed in the annual returns of the company;
2. the audited accounts of the company;
3. the tax obligations of the company;
4. the financial and the bank statements of the company for the previous twelve months; and
5. the actual stock in trade of the company.

5. Licensing.

1. The licensing authority shall grant a hire purchase licence to an applicant, where it is satisfied that the applicant is a company qualified to carry on a hire purchase business.
2. A hire purchase licence shall indicate—

1. the name and the registration number of the company;
2. the postal, the email and the physical address of the company;
3. the nature of the hire purchase business that the company carries on; and
4. the conditions, if any, under which the company shall carry on the hire purchase business.

3. The licensing authority shall grant a hire purchase licence within thirty working days of receipt of an application for a hire purchase licence.
4. Where the licensing authority refuses to grant a hire purchase licence or grants a hire purchase licence subject to conditions, the licensing authority shall notify the applicant of its decision within fourteen working days of making the decision.
5. A hire purchase licence shall be in Form 2 as specified in Schedule 2.
6. A notice of refusal to grant or renew a hire purchase licence shall be in Form 3 as specified in Schedule 2.

6. Renewal of a hire purchase licence.

1. Regulation 5 shall apply to an application for renewal of a hire purchase licence.
2. An application for renewal of a hire purchase licence shall be made at least one month before the expiry of the hire purchase licence.

7. Suspending or cancelling a hire purchase licence.

The licensing authority shall suspend or cancel a hire purchase licence if a company commits an offence for which the licensing authority deems it fit to suspend or cancel the hire purchase licence.

8. Appeal to the Minister from the decision of the licensing authority.

1. A person whose application for a hire purchase licence or renewal of a hire purchase licence is refused may appeal to the Minister from the decision of the licensing authority within thirty days after the date of the decision.
2. The appeal to the Minister from the decision of the licensing authority shall be made in Form 4 as specified in schedule 2.

Part Ill—General.

9. Security given by hirer or guarantor shall take effect as security only.

1. Where a hirer or guarantor gives security or an owner retains security, in respect of money payable under a hire purchase agreement, the security shall only operate as security and not as a transfer of any interest or right in the security.
2. A transfer signed by a hirer or a guarantor, on the request of an owner in respect of a security as a condition for executing a hire purchase agreement, shall have no effect.
3. Where a hirer pays off the money secured under a hire purchase agreement, the owner shall immediately return the security to the hirer without any further cost to the hirer.
4. An owner who requests for a transfer of the security as a condition for executing a hire purchase agreement commits an offence and is liable on conviction to a fine not exceeding fifty currency points or imprisonment not exceeding twelve months or both.
5. An owner who refuses or neglects to return a security to a hirer in accordance with sub regulation (3) commits an offence and is liable on conviction to a fine not exceeding fifty currency points or imprisonment not exceeding twelve months or both.
6. For the purposes of this regulation “security” means anything given by a hirer to an owner or retained by an owner to secure the payment of the cash price in respect of goods hired under a hire purchase agreement.

10. Consolidation.

1. Except where a hire purchase agreement expressly provides to the contrary, where a hirer executes more than one hire purchase agreements with the same owner—

1. the hirer may discharge any or some of the securities given in respect of each of the agreements without having to discharge all of them; and
2. the owner, shall, upon payment of the hire purchase price in accordance with the hire purchase agreement, release the title to the goods in respect of which the hire purchase price has been paid.

2. A consolidation which contravenes sub regulation (1) shall have no effect in relation to the hire purchase agreements.
3. An owner who consolidates two or more hire purchase agreements contrary to sub regulation (1) commits an offence and is liable on conviction to a fine not exceeding fifty currency points or imprisonment not exceeding twelve months or both.

11. Complaints.

1. A complaint in relation to a hire purchase agreement shall be made to the licensing authority in writing.
2. Upon receipt of a complaint in relation to a hire purchase agreement, the licensing authority shall within seven working days notify the respondent that a complaint has been made against the respondent and require the respondent to respond to the complaint within seven working days.
3. The licensing authority shall determine the complaint in relation to a hire purchase agreement within thirty days from the date the respondent was required to respond to the complaint.
4. A complaint in relation to a hire purchase agreement shall be in Form 5 as specified in Schedule 2.
5. The notice of receipt of a complaint by the licensing authority shall be in Form 6 as specified in Schedule 2.

Part IV—Rights of A Hirer And Provisions Relating to Hired

Goods

12. Inspection of the goods by a hirer.

An owner shall give a hirer an opportunity to inspect the goods before purchase.

13. Declaration of the cash price in respect of the hire purchase goods.

Where a hirer has not inspected the goods before purchase in accordance with section 5 (2) (a) of the Act or has not selected the goods in accordance with section 5 (2) (b) of the Act, the declaration of the cash price by the owner shall be in Form 7 as specified in Schedule 2.

14. Form of the contract of guarantee relating to a hire purchase agreement.

A contract of guarantee relating to a hire purchase agreement executed in accordance with section 4 (2) of the Act shall be in Form 8 as specified in Schedule 2.

15. Information to be disclosed by parties to a hire purchase agreement.

(1) An owner shall disclose the following information to a hirer before a hire purchase agreement is executed—

1. the rights of the owner to the goods;
2. whether there is any charge, encumbrance or lien on the goods in favour of a third party;
3. the place where the goods are kept;
4. where applicable, the manufacturer, the year and the country of manufacture;
5. the period of warranty in respect of the goods;
6. the cash price of the goods;
7. the number of installments in which the hirer shall pay for the goods;
8. the interest rate at which the owner hires the goods;
9. the charges that the owner intends to make in respect of a delay or late payment of an installment; and

(j) any other information material to the transaction.

2. A hirer shall disclose the following information before executing a hire purchase agreement—

1. the name and address of the hirer;
2. whether the goods are for commercial, personal or for other use;
3. the source of income from which the purchase price and installments in respect of the goods shall be paid; and
4. any other information material to the transaction.

3. An owner of the goods shall give a prospective hirer pre­contract information in writing to enable the prospective hirer obtain independent advise on the prospective contract.
4. An owner or a hirer who neglects, refuses or fails to disclose the information required under this regulation commits an offence and is liable on conviction to a fine not exceeding fifty currency points or imprisonment not exceeding twelve months or both.

16. Rights of a hirer.

A hirer has a right—

1. to terminate a hire purchase agreement subject to section 9 of the Act;
2. to inspect the goods—

1. before purchase; or
2. regularly and at a reasonable time, where the hirer does not take possession of the goods at the execution of the agreement;

3. to quiet enjoyment of the goods free from any interruption by an owner;
4. to complete the purchase of the goods before a time specified in a hire purchase agreement, subject to section 10 of the Act;
5. to lodge a caveat on a title of hired goods, where applicable; and
6. to exercise any other rights derived from the Act and a hire purchase agreement.

17. Rights of an owner

An owner of hired goods has a right—

1. to take possession of the goods in case of a default in making payments to the owner by the hirer;
2. to be paid a hire purchase price; and

to regularly and at reasonable times, give notice to the hirer in writing of the intention to enter and inspect the goods from the place where they are kept.

18. Hirer to insure the hired goods.

1. A hirer shall insure the hired goods up to the value of the goods.
2. Notwithstanding sub regulation (1), an owner may insure the goods and include the cost of insurance in the hire purchase price of the goods.
3. Where an owner insures the goods under this regulation, a hire purchase agreement shall state the particulars of an insurance policy of the goods.

19. Transfer of the title after the payment of the purchase price.

1. An owner shall immediately transfer the ownership of the hired goods to a hirer where the hirer has completed payment of the hire purchase price.
2. A hirer shall make a written complaint to the court where an owner fails, neglects or refuses to transfer ownership of the hired goods to the hirer without reasonable cause in accordance with sub regulation (1).
3. Where an owner is absent from Uganda or the whereabouts of the owner are not known and there is no person authorised to transfer ownership of the goods to the hirer, the hirer shall apply to court for an order to transfer the goods in the name of the hirer upon proof—

1. that the hire purchase price and all the interest in accordance with the agreement have been paid by the hirer; and
2. that all efforts by the hirer to locate the owner have been unsuccessful.

4. Before transferring the goods into the name of the hirer, the court shall require the hirer to give notice of the intention to transfer ownership of the hired goods to the hirer in at least one newspaper of wide national circulation.
5. An owner who refuses, fails or neglects to transfer ownership of the hired goods to the hirer in accordance with this Regulations, commits an offence and is liable on conviction to a fine not exceeding fifty currency points or imprisonment not exceeding twelve months or both.

20. Payment where the owner cannot be found.

1. Where a hirer wishes to pay any money in accordance with a hire purchase agreement, and the owner is absent from Uganda or the whereabouts of the owner are not known and there is no person authorised to receive the money on behalf of the owner, the hirer shall, apply to the licensing authority for approval to make the payment to the authority.
2. The application for approval for a hirer to make a payment to the licensing authority on behalf of the owner shall be in Form 9 as specified in schedule 2.
3. Where the licensing authority agrees to receive the payment on behalf of the owner—

1. the licensing authority shall receive and hold the payment in trust for the owner;
2. the licensing authority shall acknowledge receipt of the payment on behalf of the owner by issuing a receipt;
3. the licensing authority shall send a copy of every receipt issued under sub regulation (2)(b) to the registered address of the owner.
4. the licensing authority shall deposit the payment on a separate account opened by the licensing authority for this purpose;
5. the receipt of payment by the licensing authority on behalf of the owner shall be in Form 10 as specified in Schedule 2
6. the licensing authority shall immediately pay to the owner or the legal representative of the owner, the money held by the licensing authority on behalf of the owner, upon application by the owner and payment of the fees specified in Schedule 3.
7. An application to pay the payment received on behalf of the owner to the owner shall be in Form 11 as specified in schedule 2.

21. Consent to transfer interests in hired goods or to sell hired goods.

1. A hirer shall not transfer or sell goods which are still the subject of a hire purchase agreement without a written consent of an owner.
2. The consent of an owner to a hirer to transfer or sell goods under a hire purchase agreement shall be in Form 12 as specified in Schedule 2.
3. Where a hirer transfers or sells goods which are still the subject of a hire purchase agreement in contravention of this regulation, the transfer or sale is voidable at the instance of an owner.
4. A hirer who transfers or sells goods in contravention of this regulation, commits an offence and is liable on conviction to a fine not exceeding fifty currency points or imprisonment not exceeding twelve months or both.

22. Passing of title to the hired goods.

Except as provided for in a hire purchase agreement, the title to the goods under a hire purchase agreement, shall not pass until a hirer has paid the hire purchase price in accordance with the hire purchase agreement.

23. Loss or damage of the hired goods.

1. A hirer shall be liable for any damage to the hired goods while the goods are in the custody of the hirer.
2. Where, during the subsistence of a hire purchase agreement, after a hirer has taken possession of the goods, the goods are lost or stolen, the hirer shall continue to pay for the goods in accordance with the hire purchase agreement.
3. Where, during the subsistence of a hire purchase agreement, the hired goods remain in the custody of an owner, the owner shall be liable for any damage or loss caused to the hired goods.
4. For the purposes of this regulation, an owner or a hirer shall immediately notify the hirer or the owner respectively of any damage or loss occasioned to the goods while in the custody of the owner or the hirer.
5. The notification of the loss or damage of the hired goods shall be in Form 13 as specified in schedule 2.

24. The owner shall not make a charge greater than the interest.

1. An owner shall not charge a hirer for any default made by the hirer an amount that is greater than the interest payable under the hire purchase agreement.
2. An owner who contravenes sub regulation (1) commits an offence and is liable on conviction to a fine not exceeding fifty currency points or imprisonment not exceeding twelve months or both.

25. Fees.

The fees specified in schedule 3 are payable to the licensing authority in respect of the respective matters specified in that schedule.

SCHEDULE 1 CURRENCY POINT One currency point is equivalent to twenty thousand shillings.

SCHEDULE 2 FORMS

Regulation 3

Form 1 The Republic of Uganda

application for a hire purchase licence.

(Under Section 20 and 36 of the Hire Purchase Act, 2009, and Regulation 3 of the Hire Purchase Regulations, 2012)

To be filled in triplicate.

To: The licensing authority.

2. Particulars of Directors

4. Nature of goods that the company intends to hire out

* Please attach the following:-

1. A certified copy of the registration certificate of the company.
2. A certified copy of the Memorandum and Articles of Association of the Company.
3. The audited accounts for the company for the last year.
4. A tax clearance certificate issued by Uganda Revenue Authority.
5. Evidence of filling annual returns for the previous year.
6. Evidence of payment of the prescribed licence fees.
7. Any other information that the licensing Authority may require.

Form 2 The Republic of Uganda

Hire Purchase Licence.

(Under Section 20 and 36 of the Hire Purchase Act, 2009 and Regulation 5 of the Hire Purchase Regulations 2012)

........................................................................................................................................  (Insert

name, postal and physical address of the company)

is licenced to carry on a hire purchase business in Uganda for the year..................

The licence is in respect of the following business- (Insert the nature of business that the company carries on)

This licence is subject to the following conditions ..........................................................

Dated and signed by my hand, this ........... day of.................................................. 20...

Licensing Authority

Form 3 The Republic of Uganda

notice of refusal to grant or renew a hire purchase

licence.

(Under Section 20 of the Hire Purchase Act, 2009 and Regulation 5 of the Hire Purchase regulations 2012)

To.............................................

(Insert name of applicant)

TAKE NOTICE that the licensing authority considered your application for a licence/renewal of a licence to carry on the business of hire purchase and has decided not to grant the licence because of the following reasons -

Dated and signed by my hand this............ day of............................................. 20

Licensing Authority

APPEAL TO THE MINISTER FROM THE DECISION OF THE LICENSING AUTHORITY.

(Under Section 22 and 36 of the Hire Purchase Act, 2009 and Regulation 8 of the Hire Purchase Regulations, 2012)

To: The Minister responsible for trade

I....................................................................................... hereby appeal from the decision

of the licensing authority made on the..................... day of...................... 20..

This appeal is based on the following grounds

I request the Minister to make the following orders—

1. reverse the decision of the licensing authority;
2. order the licensing authority to reconsider their decision; and
3. order the licensing authority to grant the licence

Dated and signed, this............. day of................................................. 20.............

Appellant

complaint in relation to a hire purchase agreement.

(Under Section 36 of the Hire Purchase Act, 2009 and Regulation 11 of the Hire Purchase Regulations, 2012)

To: The licensing authority

The complaint is against........................................................................................... (Insert

name of Company & address)

Facts constituting the complaint are;

Dated and signed, this............. day of...................... 20

Name of the complainant

Address of the complainant

NOTICE OF RECEIPT OF A COMPLAINT BY LICENSING AUTHORITY.

(Under Section 36 of the Hire Purchase Act, 2009 and regulation 11 of the Hire Purchase Regulations, 2012)

To..............................................................................

(Insert name of company/Respondent)

TAKE NOTICE that a complaint has been made against you

by........................................................................................ (insert name of complainant).

A copy of the complaint is attached to this notice.

You are required to respond to this complaint in writing within seven days from the date of receipt of this Notice.

Failure to respond will result in the complaint being heard in your absence.

The complaint shall be heard and determined within thirty days from the time after which you are required to respond to the complaint.

Dated and signed by my hand this.............. day of...................... 20.............

Licensing Authority

FORM 7

THE REPUBLIC OF UGANDA

declaration of the cash price in respect of the hire

PURCHASE GOODS.

(Under Section 5 and 36 of the Hire Purchase Act, 2009 and Regulation 13 of the Hire Purchase Regulations, 2012)

To:

(Insert name and address of the prospective hirer)

I/We ............................................................  hereby declare that the cash price

Name and signature of owner

Regulation 14 FORM 8

CONTRACT OF GUARANTEE RELATING TO A HIRE AGREEMENT.

(Under Section 4 and Section 22 of the Hire Purchase Act, 2009 and Regulation 14 of the Hire Purchase Regulations 2012)

I.............................................................. (insert name and address of guarantor) being

the guarantor in respect of the following goods-

(specify the goods)

Under a hire purchase agreement[1] executed between

.................................... (insert name and address of hirer)

and

(insert name and address of owner).

Having executed a hire purchase agreement to purchase the goods from the owner under the terms and conditions set out in the agreement.

I hereby give my consent and agree to be a guarantor of the hirer to the following extent:-

Name & Signature of Guarantor(s).

Name & Signature of owner.

Name & Signature of hirer.

FORM 9

THE REPUBLIC OF UGANDA

APPLICATION FOR APPROVAL FOR THE HIRER TO MAKE PAYMENT TO THE LICENSING AUTHORITY ON BEHALF OF THE OWNER.

(Under Section 36 of the Hire Purchase Act, 2009 and Regulation 20 of the Hire Purchase Regulations, 2012)

To: The Licensing Authority

I............................................................................... (insert name and address of hirer)

being the hirer in respect of the following goods—

(specify the goods)

Under a hire purchase agreement*executed between myself and.................................

(insert name and address of owner).

WISH to make payment in accordance with the agreement but the owner is—

1. absent from Uganda; or
2. the whereabouts of the owner are not known,

AND there is no person authorised to receive payment on behalf of the owner.

I hereby apply for approval to make the payment to the licensing authority in accordance with regulation 22.

Date..................................

receipt of payment by the licensing authority on

BEHALF OF THE OWNER.

(Under Section 36 of the Hire Purchase Act, 2009 and Regulation 20 of the Hire Purchase Regulations, 2012)

This is to acknowledge the receipt of ............................................................... shillings

on behalf of ...............................................................................  (insert name of owner)

from..............................................................................................................................................

being payment in respect of................................................... (insert nature of goods)

Dated and signed by my hand, this.............. day of...................................... 20.............

Licensing authority application to the licensing authority to pay payment received on behalf of the owner to the owner.

(Under Section 36 of the Hire Purchase Act, 2009 and Regulation 20 of the Hire Purchase Regulations, 2012)

I......................................................................................................................................................

(insert name of owner/legal representative of the owner) hereby claim

..................................................................................................................... (state the amount

of money claimed, the circumstances under which the owner was not available to receive payment from the hirer and the nature of the goods hired)

Dated and signed this................... day of........................................................ 20.

Owner/legal representative of the owner

Note:

1. Attach a copy of the Hire Purchase Agreement.
2. Evidence of payment of the fees specified in schedule 3.
3. If the claim is made by a legal representative, the documents appointing the legal representative.

FORM 12

CONSENT OF THE OWNER TO THE HIRER TO TRANSFER OR SELL GOODS WHICH ARE STILL THE SUBJECT OF A HIRE PURCHASE

AGREEMENT.

(Under Section 36 of the Hire Purchase Act, 2009 and Regulation 21 of the Hire Purchase Regulations, 2012)

To:

(Insert name and address of the hirer)

I.................................................................................... being the owner of the following

goods which are still the subject of a hire purchase agreement namely;

hereby give my consent to the hirer to transfer or sell these goods.

Dated this.................................... of...................................... 20.

FORM 13

THE REPUBLIC OF UGANDA

notification of loss or damage of the hired goods.

(Under Section 36 of the Hire Purchase Act, 2009 and Regulation 23 of the Hire Purchase regulations, 2012)

To:

(Insert name and address of the hirer or owner) TAKE NOTICE that the following goods              

which are the subject of a hire purchase agreement between you and me have been damaged as follows:

(specify nature of damage)

Date

SCHEDULE 3 FEES

HON. AMELIA KYAMBADDE (MP),

Minister of Trade, Industry and Cooperatives.