Must the name and address of a lessor, who has entered into a lease agreement for equipment, goods, or property, with a person required to file a Statement of Financial Interests, or a business with which he is associated, be reported on the annual Statement of Financial Interests by the person required to file such a statement, if the total amount due under the lease is over $5000?

          The name and address of a lessor, who has entered into a lease agreement for property or goods with a person required to file a Statement of Financial Interests, or a business with which he is associated, must be reported on the annual Statement of Financial Interests by the person required to file such a statement, if the total amount due under the lease is over $5,000. The address of any property leased by the reporting person should also be reported on the Statement of Financial Interests.

          The New Castle County Ethics Code, Section 2-175(b)(4) requires that a person required to file a Statement of Financial Interest (hereinafter "SF1") must disclose "[A]ny direct or indirect interest in real estate". Section 2-1 75(b)(5) of the Ethics Code further requires that a reporting person disclose, with certain limitations: "[T]he name and address of each creditor to whom a debt is or was owed by the person or business with which he or she is associated in excess of $5000.00".

 

          Although the Ethics Code provides a definition of the phrase "interest in real estate",¹ it does not define what constitutes either "direct or indirect" interest in real estate or the term "creditor". Broadly construed, however, the term "creditor" commonly refers to "one who has any legal liability upon a contract, express or implied, or in tort". Black's Law Dictionary, 5^th edition, 1979. In a more narrow sense, "the term is limited to one who holds a demand which is certain and liquidated". Id. While the term "lease" is subject to various definitions, it commonly is construed to mean a type of contract where one owning real or personal property grants another the right to possess and/or to use it for a specified period of time in exchange for periodic payments.² Accordingly, given these common meanings, the Commission advises that under Section 2-175(b)(5), a reporting person must report the name and address of a lessor, if he or she, or a business with which he or she is associated³, has entered a lease where the total amount due on the lease exceeds $5,000.00. Likewise, if a reporting person has entered into any lease for real estate, the address of the property in question should be reported on the SF1, pursuant to Section 2-1 75(b)(4).

BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON OCTOBER 6, 1998. ________________________________ David J.J. Facciolo, Chairperson

¹ See 2-172. Definitions defines "interest in real estate" as "any interest in real estate or improvements thereon, whether legal or equitable."

² Black's Law Dictionary, 5^th edition, 1979.

³ Sec. 2-172. Definitions defines "business with which he or she is associated" as "any business in which the person is a director, officer, owner, employee or has a financial interest or a member of the person's immediate family is a director, officer, owner or has a financial interest."