Submitted by stackachu, also found by EV_om, lanrebayode77, CipherSleuths, 0xc695, rbserver (1, 2), hash, juancito, jasonxiale, evmboi32, hals, 0xA5DF, 0xDING99YA, HSP, kaden, and cccz
https://github.com/re-nft/smart-contracts/blob/3ddd32455a849c3c6dc3c3aad7a33a6c9b44c291/src/packages/Reclaimer.sol#L33 
https://github.com/re-nft/smart-contracts/blob/3ddd32455a849c3c6dc3c3aad7a33a6c9b44c291/src/packages/Reclaimer.sol#L43
In a PAY order lending, the renter is payed by the lender to rent the NFT. When the rent is stopped, Stop.stopRent(), transfers the NFT from the renters Safe back to the lender and transfers the payment to the renter.
To transfer the NFT from the Safe, _reclaimRentedItems() is used, which makes the Safe contract execute a delegatecall to Stop.reclaimRentalOrder(), which is inherited from Reclaimer.sol. This function uses ERC721.safeTransferFrom() or ERC1155.safeTransferFrom() to transfer the the NFT.
If the recipient of the NFT (the lenders wallet) is a smart contract, the safeTransferFrom() functions will call the onERC721Received() or onERC1155BatchReceived() callback on the lenders wallet. If those functions dont return the corresponding magic bytes4 value or revert, the transfer will revert. In this case stopping the rental will fail, the NFT will still be in the renters wallet and the payment will stay in the payment escrow contract.
A malicious lender can use this vulnerability to grief a PAY order renter of their payment by having the  onERC721Received() or onERC1155BatchReceived() callback function revert or not return the magic bytes4 value. They will need to give up the lent out NFT in return which will be stuck in the renters Safe (and usable for the renter within the limitations of the rental Safe).
However, the lender has the ability to release the NFT and payment anytime by making the callback function revert conditional on some parameter that they can set in their contract. This allows them to hold the renters payment for ransom and making the release conditional on e.g. a payment from the renter to the lender. The lender has no risk here, as they can release their NFT at any time.
Add the following code to StopRent.t.sol:
Add the following test to StopRent.t.sol:
Now the PoC can be run with:
I see three ways to mitigate this (however, the third one is incomplete):
Alec1017 (reNFT) confirmed
JCN (Warden) commented:
0xean (Judge) decreased severity to Medium and commented:
Note: To see full discussion, see here.
