Nonsegregated Disclosures

Nonsegregated disclosures contain information that legally must be presented somewhere in a lease agreement. They can be included in any section of the lease agreement, except in the section with the segregated disclosures. A lease agreement is a contract between a lessor (the owner of a property) and the lessee (the person or persons leasing the property), which defines the rights to and duration of the use of the property. Property in this instance can refer to such things as a dwelling, vehicle or piece of machinery, for example. Lease agreements are similar to rental agreements, though they tend to be longer in duration.

Nonsegregated disclosures are required by the Federal Reserve Board Regulation M. Regulation M is issued by the Board of Governors of the Federal Reserve System to implement the consumer leasing provisions of the Truth in Lending Act. A lease agreement must also contain segregated disclosures, which are placed in a distinct and defined section of the contract. The segregated disclosures are intended to protect consumers by clearly providing them with the information they need to understand the contract they are entering, including the term of the lease and amount due at signing or delivery.

Nonsegregated disclosures include additional information not explained in the segregated disclosures. They may explain information on government-required fees and taxes; whether the lessor or lessee will be responsible for insurance and how much it will cost; the leased item's estimated residual value, which is the value of the property at the end of the lease; lessor and lessee maintenance responsibilities; early termination and default; warranties; lessor's security interest; and late payment fees.