where m is the number of payment periods in a year,
and the value of i is such that
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FOR DISCUSSION ONLY
UNIFORM CONSUMER LEASES ACT
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
APRIL, 1999
as prepared for the Committee on Style meeting April 15-18, 1999
UNIFORM CONSUMER LEASES ACT
COPYRIGHT© 1999
BY
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
ROBERT H. CORNELL, 350 Cambridge Avenue, Suite 100, Palo Alto, CA 94036, Co-Chair
JUSTIN L. VIGDOR, 2400 Chase Square, Rochester, NY 14604, Co-Chair
PAMELA G. CHIN, 35th Floor, 444 S. Flower Street, Los Angeles, CA 90071
JACK DAVIES, Court of Appeals, Judicial Building, 25 Constitution Avenue, St. Paul, MN 55155
PATRICK C. GUILLOT, Suite 900, 8080 N. Central Expressway, Dallas, TX 75206
NEAL OSSEN, Suite 201, 21 Oak Street, Hartford, CT 06106
RAYMOND P. PEPE, 13th Floor, 240 N. Third Street, Harrisburg, PA 17101-1507
MARK H. RAMSEY, Room 309, State Capitol Building, Oklahoma City, OK 73105
WILLIS E. SULLIVAN, III, P.O. Box 359, 1423 Tyrell Lane, Boise, ID 83701
CHARLES J. TABB, University of Illinois College of Law, 504 E. Pennsylvania Avenue, Champaign, IL 61820
RALPH J. ROHNER, Columbus School of Law, The Catholic University of America, Cardinal Station, Washington, DC 20064, Reporter
GENE N. LEBRUN, P.O. Box 8250, 9th Floor, 909 St. Joseph Street, Rapid City, SD 57709, President
DAVID D. BIKLEN, Law Revision Commission, Room 509A, State Capitol, Hartford, CT 06106, Division Chair
AMERICAN BAR ASSOCIATION ADVISOR
MICHELLE HUGHES, One Columbus Center, Virginia Beach, VA 23462
FRED H. MILLER, University of Oklahoma, College of Law, 300 Timberdell Road, Norman, OK 73019, Executive Director
WILLIAM J. PIERCE, 1505 Roxbury Road, Ann Arbor, MI 48104, Executive Director Emeritus
312/915-0195
April 1999
Sec. # Caption Page #
101 Short Title 1
102 Definitions 1
103 Scope; Exclusions; Sale Incident to Lease 5
104 Characterization of Lease; Transaction Subject to Act by Agreement 6
105 Supplementary General Principles of Law Applicable 6
106 Waiver; Agreement to Forego Rights in Settlement of Claim 7
107 Limitation on Choice of Applicable Law and Forum 7
108 Obligation of Good Faith 8
109 Unconscionability 8
201 Lease Advertising 9
202 Pre-Lease Availability of Sample Form 9
203 Disclosure; Form of Lease Record; Copy to Lessee 9
204 Insurance Disclosures 12
205 Notice to Guarantor 13
206 Information During Lease Term; Satisfaction of Lease 14
[207 Calculation of Annual Lease Rate] 16
301 Payment or Trade-in Pending Approval of Lease; Refund or Return 20
302 Prohibited Lease Terms 21
303 Security Interest Restricted; Security Deposit 21
304 Delinquency and Default Charges; Attorney's Fees 22
305 Assignment of Lease; Preservation of Lessee's Claims and Defenses 23
306 Sublease 23
307 Open-End Lease 24
308 [Warranties of Quality and Title] 24
[309] Rebate or Discount for Referrals 25
310 Limit on Insurance Charges; Termination or Replacement of Insurance 25
401 Liability for Gap Amount on Total Loss of Goods 27
402 Lessee's Default; Right to Cure 28
403 Repossession; Application of Realized Value 29
404 Determining Realized Value 30
405 Early Termination Liability 31
406 Excess Wear and Tear; Excess Mileage 33
501 Private Remedies 36
502 Effect of Violation on Rights of Parties; Election of Remedies 41
503 Administrative Enforcement 41
[504 Administration of Act] 41
601 Construction Against Implicit Repeal 43
602 Severability 43
603 Effective Date; Transition 43
604 Specific Repealer and Amendments 43
Section 101. SHORT TITLE. This Act shall be known and may be cited as the Uniform Consumer Leases Act.
Section 102. DEFINITIONS.
(a) As used in this Act:
(1) "Authenticate" means to sign or execute or adopt a symbol, or encrypt a record in whole or in part, with present intent to:
(A) identify the authenticating party; and
(B) adopt, accept or establish the authenticity of a record or term.
(2) "Conspicuous" means [to be aligned with UCC].
(3) "Consumer lease" means a contract for the transfer by a lessor of the right to possession and use of goods for a term in return for consideration, where
(A) the lessee is obligated for a term of more than four months and for a total contractual obligation of $150,000 (excluding the residual value, payments for options to renew or purchase, and payments to third parties) or less, whether or not the lessee has the option to purchase or otherwise become the owner of the goods at the expiration of the lease; and
(B) at the time of consummation the leased goods are intended by the lessee primarily for personal, family, or household purposes.
(4) "Consummation" means the time when a lessee authenticates a record evidencing the lessee's contractual obligation on a lease. Consummation may occur even though the lease is subject to subsequent credit or other approval by the lessor or an assignee of the lessor.
(5) "Federal Consumer Leasing Act" means Chapter 5 of Title I of the Consumer Credit Protection Act, 15 U.S.C.A. § 1667 [, as amended,] and includes Regulations and Official Staff Commentary issued by the Board of Governors of the Federal Reserve System pursuant to that Act (Regulation M, 12 C.F.R. Part 213 [, as amended]).
[Legislative Note: This Act incorporates by reference certain definitions, disclosure requirements and other provisions of the federal Consumer Leasing Act and its implementing Regulation M. For states where incorporation of present and future federal law is permissible, the phrase "as amended" should be retained so that the incorporation of federal law remains current. For states where incorporation of future provisions of federal law is constitutionally impermissible, the phrase "as amended" should be omitted; it will then be necessary for these states to re-enact this definition periodically, i.e., when changes occur in the federal law.]
(6) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing.
(7) "Goods" means all things that are movable at the time of identification to the lease contract, or are fixtures, but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction.
(8) "Holder" means the lessor and, if the lessor's interest is assigned, the assignee for the period of the assignee's ownership of that interest.
(9) "Lease" means a consumer lease.
(10) "Lessee" means an individual who enters into, applies for, or is offered a lease. A secondary obligor on a lease is not a lessee.
(11) "Lessor" means a person who has leased, offered to lease, or arranged to lease goods under a consumer lease more than five times in the preceding calendar year or more than five times in the current calendar year.
(12) "Motor vehicle" means a device required by law to be registered under [insert citations to appropriate vehicle registration laws of the state].
(13) "Record," when used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. When used as an adjective, "record" means that the designated information is contained in a record.
(14) "Sign" means to identify a record by means of a signature, mark, or other symbol with intent to authenticate it.
(15) "Single payment lease" means a lease for which a single payment is required for the scheduled term of the lease.
(b) Other defined terms in this Act and the sections in which they appear are:
"Annual lease rate" [Section 207(b)]
"Constant yield method" [Section 406(c)]
"Ending balance" [Section 207(a)(1)]
"Gap amount" [Section 402(a)]
"Lease amount financed" [Section 207(a)(2)]
"Lease finance charge" [Section 207(a)(3)]
"Secondary obligor" [Section 205(a)]
(c) The following terms used in this Act have the same meaning as in the Uniform Commercial Code:
"Conspicuous" [?] [UCC § 1-201(10)]
"Contract" [UCC § 1-201(11)]
"Finance lease" [UCC § 2A-103(1)(g)]
"Lien" [UCC § 2A-103(1)(r)]
"Organization" [UCC § 1-201(28)]
"Person" [UCC § 1-201(30)]
"Security interest" [UCC § 1-201(37)]
"Send" [UCC § 1-201(38)]
"Supplier" [UCC § 2A-103(1)(x)]
"Termination" [UCC § 2A-103(1)(z)]
[Legislative Note: Some of these cross-referenced definitions are from UCC Article 2A: i.e., "finance lease," "lien," "supplier," and "termination." If a state has not adopted UCC Article 2A, the state should add comparable definitions in this Act.]
(d) The following terms have the same meaning as in the federal Consumer Leasing Act:
"Adjusted capitalized cost"
"Advertisement"
"Base periodic payment"
"Capitalized cost reduction"
"Depreciation and any amortized amounts"
"Gross capitalized cost"
"Open-end lease"
"Periodic payment"
"Rent charge"
"Residual value"
Section 103. SCOPE; EXCLUSIONS; SALE INCIDENT TO LEASE.
(a) This Act applies to a transaction that is a consumer lease as defined in Section 102(a)(3).
(b) This Act does not apply to:
(1) a transaction that is [subject to UCC Article 2B];
(2) A lease of goods which is incidental to a contract that is predominantly for the sale of goods or services or is a transaction [subject to UCC Article 2B];
(3) a lease of goods which is incidental to a lease of real property and provides that:
(A) the lessee has no liability for the value of the goods at the end of the lease term except for abnormal wear and tear, and
(B) the lessee has no option to purchase the leased goods;
and
(4) a safe deposit box.
(c) (1) If a lease includes an incidental sale of goods, services or benefits, or a license, including but not limited to accessories, insurance, extended warranty or service contract, so long as the lease aspects of the transaction predominate the incidental sale is not subject to [insert citations to state credit sales laws].
(2) A provision in a lease for payment of governmental fees, license or registration fees, taxes related to the lease, or an amount necessary to discharge a security interest in, a lien on, or a debt with respect to property traded in, or to satisfy an obligation owed on a prior lease, does not subject that payment to [insert citations to laws of this state governing small loans or other forms of consumer financing].
Section 104. CHARACTERIZATION OF LEASE; TRANSACTION SUBJECT TO ACT BY AGREEMENT.
(a) A lease under this Act may not be characterized as a credit sale, loan or security interest to subject the transaction to coverage by other law of this State.
(b) If the parties to a lease transaction that is not otherwise a consumer lease agree in the lease, or in a contemporaneous record, that the transaction is subject to this Act, the transaction is a consumer lease for the purposes of this Act.
Section 105. SUPPLEMENTARY GENERAL PRINCIPLES OF LAW APPLICABLE. The principles of law and equity, including the Uniform Commercial Code, the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, unfair or deceptive acts or practices, or other validating or invalidating cause supplement the provisions of this Act, except to the extent those principles are displaced by or inconsistent with the particular provisions of this Act.
[Legislative Note: This Act does not contain a general proscription of unfair or deceptive acts or practices in connection with consumer leases, as this is often covered by a more general consumer fraud act. See, e.g., Uniform Consumer Sales Practices Act § 2(1) ["lease" included in definition of "consumer transaction"]. An enacting state should therefore assure that its statutory treatment of unfair and deceptive acts and practices includes consumer lease transactions. Similarly, this Act does not provide a cooling-off period for leases solicited door-to-door or otherwise consummated off the dealer's premises. Cf., Uniform Consumer Credit Code §§ 3.501 -- 3.505. An enacting state should therefore consider amending its existing door-to-door (or off-premises) sales law to cover consumer leases.]
Section 106. WAIVER; AGREEMENT TO FOREGO RIGHTS IN SETTLEMENT OF CLAIM.
(a) Except as otherwise permitted by this Act, a lessee may waive or agree to forego rights or benefits under this Act only in settlement of a bona fide dispute or collection claim.
(b) A settlement in which a lessee waives or agrees to forego rights or benefits under this Act is invalid if the court finds the settlement to have been unconscionable when made. Matters relevant to unconscionability include the competence of the lessee, any deception or coercion practiced upon the lessee, the nature and extent of legal advice received by the lessee, and the value of the consideration.
Section 107. LIMITATION ON CHOICE OF APPLICABLE LAW AND FORUM.
(a) If the law chosen by the parties to a lease is that of a jurisdiction other than a jurisdiction in which the lessee resides at the time the lease agreement becomes enforceable or within 30 days thereafter or in which the goods are to be used, the choice is not enforceable.
(b) If a judicial forum provided in a lease for an action against the lessee is a forum that would not otherwise have jurisdiction over the lessee, the choice is not enforceable.
(c) An action by a lessee against a holder may be brought in any judicial forum which has jurisdiction over the holder, and a provision in a lease to the contrary is unenforceable.
Section 108. OBLIGATION OF GOOD FAITH. Every contract or duty within this Act imposes an obligation of good faith in its
Section 109. UNCONSCIONABILITY.
(a) If the court as a matter of law finds a lease contract or any clause of a lease contract to have been unconscionable at the time it was made the court may refuse to enforce the lease contract, or it may enforce the remainder of the lease contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
(b) If the court as a matter of law finds that a lease contract or any clause of a lease contract has been induced by unconscionable conduct or that unconscionable conduct has occurred in the collection of a claim arising from a lease contract, the court may grant appropriate relief.
(c) Before making a finding of unconscionability under subsection (a) or (b), the court, on its own motion or that of a party, shall afford the parties a reasonable opportunity to present evidence as to the setting, purpose, and effect of the lease contract or clause thereof, or of the conduct.
(d) In an action in which the lessee claims unconscionability with respect to a lease:
(1) If the court finds unconscionability under subsection (a) or (b), the court shall award reasonable attorney's fees to the lessee.
(2) If the court does not find unconscionability and the lessee claiming unconscionability has brought an action the lessee knew to be groundless, the court shall award reasonable attorney's fees to the party against whom the claim is made.
(3) In determining attorney's fees, the amount of the recovery on behalf of the claimant under subsections (a) and (b) is not controlling.
Section 201. LEASE ADVERTISING.
(a) An advertisement for a lease must comply with the advertising requirements of the federal Consumer Leasing Act whether or not the advertised lease is covered by that Act.
(b) A person may not cause to be published, broadcast or distributed a false, deceptive, or misleading advertisement for a lease.
(c) This section does not apply to the owner or employees, as such, of any medium in which an advertisement appears or through which it is disseminated.
Section 202. PRE-LEASE AVAILABILITY OF SAMPLE FORM. On request a lessor must give a copy or reproduction of its current lease form to a prospective lessee at its place of business before the consummation of a lease. If a lessor contracts with lessees by mail or electronically, the lessor must make the copy or reproduction available on request in the same medium. If a lessor uses more than one lease form, the lessor satisfies this requirement by providing a form the lessor has reason to believe is pertinent to the type of lease about which the prospective lessee has inquired.
Section 203. DISCLOSURE; FORM OF LEASE RECORD; COPY TO LESSEE.
(a) Prior to the consummation of a lease, the lessor shall make the disclosures required by the federal Consumer Leasing Act whether or not the lease is subject to that Act.
(b) The requirements of subsection (a) apply to a renegotiation of a lease, but not to an extension of a lease for a period of six months or less or to an extension of a lease for a period of more than six months if the amount of the base periodic payment is reduced. A renegotiation occurs when a lease is satisfied and replaced by a new lease undertaken by the same lessee.
(c) A lease agreement shall:
(1) be a record;
(2) clearly indicate at the top or beginning of the record that it is a lease; (3) contain in a location proximate to the lessee's signature a notice substantially as follows:
(A) if the lease contains a purchase option:
"NOTICE TO THE LESSEE: This is a lease. You are not buying the [goods/vehicle], unless you exercise your option to purchase. Do not sign this lease before you read it. You are entitled to a completed copy of this lease when you sign it."; or
(B) if the lease does not contain a purchase option:
"NOTICE TO THE LESSEE: This is a lease. You are not buying the [goods/vehicle]. Do not sign this lease before you read it. You are entitled to a completed copy of this lease when you sign it."
(4) identify the place of business of the lessor, and the residence of the lessee;
(5) identify any property traded in or applied as a capitalized cost reduction or similar credit; and
(6) be authenticated by the lessor and lessee.
[(d) A lease or other record which is delivered to the lessee under subsection (e) may state a percentage rate of charge applicable to the lease only if:
(1) that rate of charge is identified as the Annual Lease Rate, with a descriptive explanation such as "the cost of your lease as an annual rate";
(2) the lease states a specific purchase option price; and
(3) the rate is calculated in accordance with section 207.]
(e) A lessor may not present for the lessee's authentication an application for a lease, or a lease, that contains blank spaces to be filled in after it has been authenticated except that, if the goods are to be specially ordered for future delivery to the lessee, the due dates of periodic lease payments and specific identifying numbers, marks or similar information concerning the goods may be inserted in the application or lease after its execution.
(f) Promptly after a lease is consummated the lessor shall provide to the lessee a completed copy of the lease, and, if not previously provided, a copy of any other record authenticated by the lessee in connection with the transaction, including but not limited to an application, purchase order, or worksheet.
(g) A lessee's authenticated acknowledgment of receipt of a copy of the lease is presumptive proof of delivery of the copy in an action or proceeding by or against a holder who took the lease without knowledge to the contrary.
Section 204. INSURANCE DISCLOSURES.
(a) Except in a lease to which subsection (b) applies, if casualty insurance on the leased goods is not included in the lease, the lease shall contain or be accompanied by a record statement substantially as follows:
No insurance coverage for physical damage to, or loss of, the leased goods is provided under this lease.
(b) In the case of a lease of a motor vehicle:
(1) If liability insurance against personal injury or property damage caused to others is required by the lease,
(A) the lessor shall disclose in a record that the lessee may purchase the required insurance from an agent or broker of the lessee's choice subject to the lessor's right to reject that insurer for reasonable cause; and
(B) If the insurance is not included in the lease, the lease shall contain or be accompanied by a record statement substantially as follows:
No liability insurance coverage for bodily injury or property damage caused to others is provided under this lease. You must obtain that insurance yourself.
(2) If casualty insurance against property damage to the leased motor vehicle is required by the lease,
(A) the lessor shall disclose in a record that the lessee may purchase the required insurance from an agent or broker of the lessee's choice subject to the lessor's right to reject that insurer for reasonable cause; and
(B) If the insurance is not included in the lease, the lease shall contain or be accompanied by a record statement substantially as follows:
No casualty insurance coverage for property damage to the leased motor vehicle is provided under this lease. You must obtain that insurance yourself.
(3) If subsections (b)(1)(B) and (b)(2)(B) are both applicable in a particular lease, a single combined notice may be given.
(c) If a lessor offers to provide credit life, accident, health, loss-of-income, or similar insurance in the lease,
(1) the lessor must disclose in a record that the insurance is not required; and
(2) the lessee's election to purchase the insurance is effective only if the lessee separately authenticates a record requesting the insurance after receiving the disclosure specified in subsection (1).
(d) If a lessee becomes obligated to pay an amount for insurance provided by or through the lessor, the lessor shall provide or arrange to have provided to the lessee a copy of the policy or certificate of insurance.
Section 205. NOTICE TO SECONDARY OBLIGOR.
(a) For purposes of this section, "secondary obligor" means an individual who becomes obligated with respect to a lease as an additional obligor because the original lessee does not satisfy the lessor's credit standards or is in default. "Secondary obligor" does not include
(1) an individual who agrees or requests to become obligated as a co-lessee; or
(2) an assignor of a lease.
(b) The obligation of a secondary obligor with respect to a lease is not enforceable unless before authenticating any record evidencing that obligation the secondary obligor receives a clear and conspicuous record notice that identifies the obligation and the lessor and lessee and reasonably informs the secondary obligor of the nature of the obligation.
(c) A notice in substantially the following form complies with this section:
You agree to pay the lease obligation identified below although you may not personally receive any goods. You may have to pay this obligation even though the person who receives the goods is able to pay. This Notice is not the contract that makes you responsible for the obligation. Read the lease contract for the exact terms of your obligation.
IDENTIFICATION OF OBLIGATION YOU MAY HAVE TO PAY:
Section 206. INFORMATION DURING LEASE TERM; SATISFACTION OF LEASE .
(a) During the term of a lease:
(1) The holder shall provide the lessee a written receipt for any payment made in cash.
(2) Upon record request from a lessee the holder shall promptly provide to the lessee a record statement of the dates and amounts of the periodic lease payments that have been received by the holder under the lease and the total amount of the remaining periodic lease payments. An amount in the statement that is estimated shall be so identified.
(3) Upon record request from a lessee, the holder shall promptly provide to the lessee a record statement or estimate of:
(A) the lessee's current early termination obligation, and that the early termination obligation will be reduced by the realized value of the goods, if that is the case; and
(B) if the lease provides for a purchase option at the time of early termination, the purchase option price.
(4) A holder may not charge the lessee for providing one statement each under subsection (a)(2) or (a)(3) in a 12-month period. The holder may impose a reasonable fee for providing additional statements in a 12-month period.
(b) When it appears from a holder's records that a lessee has discharged all of the lessee's obligations under the lease, the holder shall promptly send to the lessee at the lessee's last known address a record indicating satisfaction of the lease. A copy of the lease marked "satisfied," "paid in full" or similar term fulfills this requirement. This record of satisfaction does not release the lessee from liability for acts or events discovered by the holder after sending the record.
[Section 207. CALCULATION OF ANNUAL LEASE RATE.
(a) For purposes of this section:
(1) "Ending balance" means the purchase option price at the end of the lease term.
(2) "Lease amount financed" means the adjusted capitalized cost minus: (A) any lease finance charge included in it, and
(B) any advance lease payment or non-refundable security deposit due on or before delivery of the goods.
(3)(A) "Lease finance charge" means the rent charge plus any other charge payable directly or indirectly by the lessee and imposed directly or indirectly by the lessor as an incident to or condition of the lease.
(B) Examples of lease finance charge include:
(i) an origination or acquisition charge;
(ii) a charge for assigning, servicing or carrying the lease;
(iii) broker fees;
(iv) a disposition or pick-up charge due on lease termination;
(C) Lease finance charge does not include:
(i) charges of a type payable in a cash purchase, such as official fees for taxes, registration or title, or for an extended warranty or service contract;
(ii) charges for late payment or other delinquency or default;
(iii) a refundable security deposit;
(iv) premiums for insurance disclosed pursuant to section 204;
(v) charges for additional authorized mileage;
(vi) an application fee charged to all applicants whether or not a lease is consummated;
(vii) fees prescribed by law that actually are or will be paid to public officials for determining the existence of or for perfecting, releasing, or satisfying a security interest.
(b) "Annual lease rate" ("ALR") is the nominal annual percentage rate that reflects the amortization of the lease amount financed to the ending balance over the scheduled term of the lease, calculated according to the actuarial method of allocating base periodic payments made on an obligation between the lease finance charge and the lease amount financed, pursuant to which a payment is applied first to the accrued lease finance charge and the balance is applied to the unpaid lease amount financed.
(c) An annual lease rate conforms to subsection (b) if it is calculated as follows:
(1) The annual lease rate for a lease
with equal base periodic payments and
equal periodic intervals is where m is the number of payment periods in a year,
and the value of i is such that
where
"C" is the lease amount financed;
"P" is the amount of each base periodic payment;
"R" is the ending balance;
"n" is the number of payment periods in the lease; and
"x" is the number of base periodic payments that are paid at or before the beginning of the lease term.
(2) If there is an irregularity in the amount or timing of base periodic payments required during the lease term, the equation in subsection (2) must be modified as necessary to calculate the value of "i" in accordance with actuarial principles. An "irregularity" means that the amount or timing interval varies by more than percent from the amount or timing interval most commonly specified under the lease.
(d) For purposes of this section:
(1) Where a lease calls for payments to be made at intervals measured by reference to weeks or months, the annual lease rate may be calculated on the assumption that each week is 1/52 of a year long or that each month is 1/12 of a year long.
(2) In a lease with no irregularity in the amount or timing of base periodic payments, a disclosed annual lease rate is considered to be accurate if it is within one eighth of one percent of the actual annual lease rate, as calculated in accordance with subsection (c).
(3) In a lease with an irregularity in the amount or timing of base periodic payments, a disclosed annual lease rate is considered to be accurate if it is within one fourth of one percent of the actual annual lease rate, as calculated in accordance with this section
[(4) Regulations of the [Administrator (section 504)] may prescribe additional assumptions for calculating the annual lease rate or its component values.]
Section 301. PAYMENT OR TRADE-IN PENDING APPROVAL OF LEASE; REFUND OR RETURN.
(a) If a prospective lessee's application is not approved on the terms submitted, (1) the lessor shall
(A) within one business day return any trade-in goods, and
(B) promptly but in no event more than 5 business days after disapproval of the application refund any payment other than an application fee.
(2) If the lessee has taken delivery of the leased goods prior to the disapproval of the lessee's application, the lessor may withhold the refund or return under subsection (a)(1) until the lessee returns the leased goods, and the lessee may retain the leased goods until the trade-in is redelivered.
(3) In the case of a motor vehicle lease where the vehicle is delivered to the lessee pending approval of the lessee's application and the application is not approved, the lessor may impose a mileage charge for the lessee's use of the vehicle, at an amount not to exceed the mileage rate authorized for deduction under state tax laws, if the fact and amount of that charge are disclosed to, and separately acknowledged by, the lessee in a record at the time of delivery. The lessor may offset the amount of this charge against any refund due the lessee. (b) A lessor may not sell or otherwise dispose of trade-in goods until the lessee's application is approved.
(c) If a lessor contracts to purchase property from a prospective lessee separately from a lease, the lessor may not withhold or otherwise condition payment for the property pending consummation of a lease.
Section 302. PROHIBITED LEASE TERMS.
(a) A lease may not contain a provision by which:
(1) the holder may accelerate the maturity of all or part of the amount owing on the lease whenever the holder deems itself insecure;
(2) the lessee gives a cognovit, power of attorney, or other authorization to confess judgment, or an assignment of wages; or
(3) the lessee gives the holder or another person authority to enter upon the lessee's premises, or to commit a breach of the peace in the repossession of the goods.
(b) An agreement or provision prohibited by this section is unenforceable but does not otherwise affect the validity of the lease.
Section 303. SECURITY INTEREST RESTRICTED; SECURITY DEPOSIT. (a) A lease may provide for
(1) a security deposit, advance lease payment or other prepayment;
(2) a security interest in the leased goods;
(3) a security interest in unearned insurance premium or service contract fee rebates;
(4) a security interest in the proceeds or benefits of insurance or of a service contract on the leased goods except to the extent those proceeds or benefits represent reimbursement to the lessee for expenses incurred.
(b) Except as provided in subsection (a), a lease or other record authenticated by the lessee in connection with the lease may not provide for the creation of a security interest in personal or real property of the lessee to secure the payment of obligations arising from the lease. A security interest taken in violation of this section is void but does not otherwise affect the validity of the lease.
(c) Nothing in this section precludes a holder from making a permissive financing statement filing under Article 9 of the Uniform Commercial Code.
(d) A holder is not required to pay interest on a security deposit, advance lease payment or other prepayment, but shall promptly account to the lessee in a record on the application of those funds.
Section 304. DELINQUENCY AND DEFAULT CHARGES.
(a) Subject to section 405 for early termination charges, a lease may specify penalties or other charges for a lessee's delinquency or default but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the delinquency or default, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy.
(b) Subject to subsection (c) a lease may provide for the holder's right to collect from the lessee a late charge on a periodic payment that is delinquent for 10 days or more in an amount provided in the lease but not to exceed the greater of $10.00 or 5 percent of the unpaid portion of the late periodic payment. A late charge permitted by this subsection is reasonable for purposes of subsection (a).
(c) A holder may not assess or collect a late charge on a current periodic payment when the only delinquency in the current payment is an amount equal to or less than unpaid late charges assessed on earlier periodic payments, [and/but] Option A [may]; Option B [may not] assess an additional late charge if all or part of a periodic payment remains delinquent through an additional payment period.
(d) A lease may provide that charges on default by the lessee include collection and court costs, but may include reasonable attorney's fees only on referral of the matter to an attorney not an employee of the holder.
Section 305. ASSIGNMENT OF LEASE; PRESERVATION OF LESSEE'S CLAIMS AND DEFENSES.
(a) Until 30 days after a lessee has been sent record notice that the lease has been assigned or transferred, the lessee may make payments to the last known holder of the lease. If otherwise timely, such a payment to the last known holder is not subject to a late charge.
(b) Except as provided in section 501(k), and notwithstanding any provision in a lease, a holder is subject to all claims and defenses arising from the lease which the lessee could assert against the lessor and, in the case of a finance lease, the supplier. A lessee's recovery from a holder under this subsection may not exceed amounts paid by the lessee under the lease.
Section 306. SUBLEASE.
(a) Unless the lease provides otherwise, a lessee under a lease with a term of one year or less may not sublease or assign the lessee's rights and interests.
(b) A lessee under a lease with a term of more than one year may sublease or assign the lessee's rights and interests with the record consent of the holder. A holder may withhold consent if the holder has a good faith belief that the sublease or assignment would jeopardize its rights under the lease.
(c) Unless otherwise agreed by the holder, the obligations of a lessee under the lease are not affected by a sublease or assignment, and the original lessee and the sublessee or assignee are jointly and severally liable under the assigned lease.
Section 307. OPEN-END LEASE.
(a) In an open-end lease, the estimated residual value shall be a reasonable approximation of the anticipated fair market value of the goods on lease expiration. There shall be a rebuttable presumption that the estimated residual value of the goods is unreasonable and not in good faith to the extent that the estimated residual value exceeds the actual realized value by more than three times the average payment allocable to a monthly period under the lease. The holder shall not collect from the lessee the amount of such excess liability on expiration of a lease unless the holder brings a successful action with respect to such excess liability. In all actions, the holder shall pay the lessee's reasonable attorney's fees.
(b) The presumptions stated in subsection (a) shall not apply to the extent the excess of estimated residual value over actual realized value is due to physical damage to the goods beyond reasonable wear and tear, or to excessive use, according to standards set under Section 406.
(c) Nothing in this section shall preclude the right of a willing lessee to make any mutually agreeable final adjustment with respect to such excess residual liability, provided such an agreement is reached after termination of the lease.
(d) At the expiration of an open-end lease the lessee may obtain at the lessee's expense a professional appraisal of the leased goods by an independent third party agreed to by lessee and holder. Such appraisal shall be finding and binding on the parties.
[Section 308. WARRANTIES OF QUALITY AND TITLE.]
Section 309. REBATE OR DISCOUNT FOR REFERRALS. A person may not induce or attempt to induce any prospective lessee to consummate a lease by offering a post-consummation rebate, discount, commission or other consideration on the condition that the lessee provide information or assistance for the purpose of enabling a lessor or other person to lease or sell goods to another individual.
Section 310. LIMIT ON INSURANCE CHARGES; TERMINATION OR
REPLACEMENT OF INSURANCE.
(a) A charge for insurance included in the lease or added under section 401(b) may not exceed the premium actually imposed by the insurer for such insurance. This subsection does not prohibit:
(1) the imposition of rent charges on insurance charges capitalized in the lease; or
(2) the lessor's realization of commissions, experience rebates, or similar compensation from the insurer.
(b) Subject to the holder's security interest rights under section 303, if liability, casualty, or credit insurance is canceled or terminated, a refund of unearned insurance premiums received by the holder shall, at the holder's option, be:
(1) refunded to the lessee; or
(2) credited, together with the unearned portion of the rent charge applicable to the refunded premium, either to (i) the lessee's current obligation, (ii) the final maturing lease payment(s), or (iii) the lessee's obligation upon early or scheduled termination. No credit or refund need be made under this subsection if the amount would be less than one dollar.
(c) If a lessee fails to maintain insurance required under the lease, the holder may buy substitute insurance for substantially the same risks for either the interests of the lessee and the holder or the interest of either of them.
(d) An amount paid by the holder for substitute insurance under subsection (c):
(1) is subject to a rent charge as though that amount was part of the adjusted capitalized cost, from the later of the effective date of the insurance or the date on which the holder notifies the lessee of the purchase of substitute insurance, its cost, and the effect on the payment schedule , and
(2) is subject to the repayment and default provisions of the lease.
(e) Nothing in this subsection prevents the holder from pursuing any other remedy for default set forth in the lease or provided by law.
Section 401. LIABILITY FOR GAP AMOUNT ON TOTAL LOSS OF GOODS.
(a) Subject to subsection (b), in this section "gap amount" means the difference between
(1) the amount that would be owed by the lessee if a total loss of the goods prior to the end of the lease term occasioned by theft, physical damage or other occurrence resulting in total loss of the goods were considered an early termination of the lease, and
(2) the portion of the cash value of the goods actually received by the holder from the lessee's insurer or from any other person.
(b) The gap amount does not include:
(1) the deductible amount applicable to a casualty insurance policy on the goods,
(2) past due lease payments or any other unpaid amounts owed by the lessee under the lease at the time of the total loss of the goods,
(3) amounts by which the insurance proceeds otherwise payable are reduced on account of past due premium payments or the condition of the goods before the total loss occurred.
(c) Except as provided in subsection (d), a lease may not provide that the lessee is responsible for the gap amount. A lease provision in violation of this subsection is unenforceable.
(d) If the lease so provides, the holder may recover from the lessee so much of the gap amount as is attributable to:
(1) the lessee's failure to maintain in effect casualty insurance required under the lease, provided the holder has not obtained substitute insurance under section 310(c) at the time of the total loss; or
(2) the lessee's fraud, intentional act, or gross negligence.
Section 402. LESSEE'S DEFAULT; RIGHT TO CURE.
(a) A provision of a lease with respect to default on the part of the lessee is enforceable only to the extent that:
(1) the lessee fails to make a payment required by the lease; or
(2) the prospect of payment, performance, or realization of the holder's interest in the goods is significantly impaired; the burden of establishing the prospect of significant impairment is on the holder.
(b) A lessee who is in default solely by reason of failure to make a payment required under the lease has a right to cure that default in accordance with subsection (c). The holder may not accelerate, take judicial action to collect, or repossess the goods until the lessee has failed to cure the default in a timely manner.
(c) After a lessee has been in default for 10 days solely by reason of failure to make a payment required under the lease, the holder may send the lessee a record notice of right to cure the default. The notice shall contain a conspicuous statement that the lessee is entitled to cure the default, and set forth the dollar amount necessary to cure the default, the date by which the cure payment is due and the name, address and telephone number of the holder from which information may be obtained regarding the cure. The date by which payment is due may be no less than 20 days after the notice is sent.
(d) Until expiration of the period for cure stated in the notice under subsection (c), the lessee may cure the default by tendering the amount of all unpaid sums due at the time of the tender, plus any unpaid delinquency or default charges, but without additional security deposit or prepayment of periodic lease payments not yet due. Cure restores the rights of holder and lessee under the lease as though the default had not occurred.
(e) A lessee is entitled to the right to cure under this subsection only once in any 12 month period during the term of the lease.
Section 403. REPOSSESSION; APPLICATION OF REALIZED VALUE.
(a) Subject to section 402, if on default the lessee does not voluntarily surrender the leased goods to the holder, the holder may repossess the goods by judicial process or by self-help provided there is no breach of the peace. [The Committee reserves judgment whether electronic disabling of computer systems should be prohibited.]
(b) After repossession or voluntary surrender of the goods the holder shall apply the realized value of the goods, determined under section 404, in the following order --
(1) default charges and collection costs as provided for in the lease [section 304];
(2) obligations of the lessee that are due or in default under the lease; and
(3) the early termination liability of the lessee (section 405).
(c) [Except as provided in section 405(e),] unless otherwise agreed the lessee is liable for any deficiency. The holder may apply to the deficiency a security deposit taken under section 303(a)(1), but shall refund to the lessee any amount of the security deposit remaining after satisfaction of the deficiency.
Section 404. DETERMINING REALIZED VALUE.
(a) Realized value is a valuation of the goods at the time the holder assesses liability on the lessee in connection with early or scheduled termination of the lease. Realized value is:
(1) the price received by the holder for the leased goods at disposition; if the goods are re-leased the realized value is the total of periodic lease payments under the new lease, reduced to present value; or
(2) if the goods are not disposed of, the higher of:
(A) the best offer for disposition of the goods; or
(B) the fair market value of the goods.
(b) A lessee and holder may agree on the realized value of the goods or a method for determining it and unless unreasonable the value so agreed upon or determined is the realized value. Such a realized value is not unreasonable if the value is determined by an appraiser agreed to by the holder and lessee, or by reference to a generally accepted reference source for goods of the kind.
(c) When the realized value is determined under subsection (a)(1), the disposition may be by public or private sale or re-lease, at any time and place, and on any terms, but every aspect of the disposition or proposed disposition, including the method, manner, time, place, and other terms shall be commercially reasonable.
(d) For a disposition in which the purchaser is the holder, an affiliate of the holder, or a person obligated to the holder under a recourse, repurchase or similar agreement, the realized value may be no less than the fair market value.
(e) If a court finds that a disposition is not commercially reasonable, the court shall set the realized value by reference to the retail market value of goods of the kind and condition at issue.
Section 405. EARLY TERMINATION LIABILITY.
(a) If a lease is terminated before its scheduled termination date by mutual agreement of the holder and lessee, and the lessee is not otherwise in default under the lease, the holder may not report the early termination to a consumer reporting agency as a default unless the lessee fails to satisfy the lessee's obligations under the lease within the time periods provided in the lease.
Conference Note: The following subsections (b), (c), and (d) are bracketed to call attention to an issue not yet resolved by the Committee. The federal Consumer Leasing Act establishes a "reasonableness" standard for early termination and default charge provisions. This draft Act restates that standard at several points [as in subsection 405(b) just below; and see also §§ 304, 406]. But this draft goes on to develop refinements on that standard, including "safe harbor" provisions that this Act would deem reasonable. The issue is whether this is a worthwhile effort, or is it better to leave the "reasonableness" of various termination and default charges to be determined exclusively under the somewhat vague federal standard.
[(b) A lease may provide a measure or formula for the lessee's liability on early termination, but only at an amount that is reasonable in the light of the anticipated or actual harm caused by the early termination, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. An early termination charge does not include
(1) unpaid periodic lease payments through the date of early termination, (2) late, delinquency or default charges,
(3) if the early termination charge is not based on the realized value of the goods, charges provided under the lease for excess wear and tear or excess mileage, and
(4) other unpaid amounts for which the lessee is responsible under the lease.
(c) For purposes of this section "constant yield method" means:
(1) in the case of a periodic payment lease, the method of determining the rent charge portion of each base periodic payment pursuant to which the rent charge for each computational period is considered earned in advance and is calculated by multiplying the constant periodic rate implicit in the lease times the unpaid adjusted capitalized cost at the beginning of the period. At any point during the scheduled term of a periodic payment lease, the unpaid adjusted capitalized cost is the difference between the adjusted capitalized cost and the sum of all depreciation amounts accrued through the preceding computational periods and the first base periodic payment; or
(2) in the case of a single payment lease, the method of determining the periodic earning of the rent charge portion of the single lease payment pursuant to which the rent charge for each computational period is considered earned in advance and is calculated by multiplying the constant rate implicit in the lease times the unpaid adjusted capitalized cost as it increases during the lease term. At any point during the term of a single payment lease, the unpaid adjusted capitalized cost is determined by subtracting from the residual value the total rent charge scheduled to be earned over the lease term and adding to the difference all rent charges accrued through the preceding computational periods.
(d) A provision for an early termination charge is [presumed to be] reasonable under subsection (b) if the charge does not exceed the sum of :
(1) official fees and taxes imposed in connection with lease termination:
(2) the greater of
(A) a disposition fee in a fixed amount, or
(B) the actual and reasonable costs of retaking, storing, preparing for sale and disposing of the goods;
(3) the amount by which the unamortized adjusted capitalized cost, calculated in accordance with the constant yield method or any other generally accepted actuarial method, plus the [pro rata] rent charge earned for the computational period in which the early termination occurs, exceeds the realized value of the goods; and
(4) an early termination charge disclosed in the lease.
(e) Notwithstanding an early termination provision in the lease, the amount determined under subsection (d)(3) may not exceed the total of remaining periodic lease payments scheduled under the lease.
(f) This Act takes no position on whether a holder's conduct in the course of repossession or disposition of leased goods justifies a bar or limitation on recovery of an early termination charge. That issue is for the court.
Section 406. EXCESS WEAR AND TEAR; EXCESS MILEAGE.
[(a) A lease may set standards and impose liability on the lessee for excess wear and tear of the leased goods if the standards and amounts of liability are reasonable and reasonably applied to compensate the holder for actual unanticipated diminished value of the goods due to damage, abuse, or lack of maintenance, but not to exceed the actual costs of repair and refurbishing.
(b) Standards for excess wear and tear may not subject the lessee to liability for
(1) ordinary and expected wear, use and depreciation of the goods; or
(2) damage or repair to the extent they are covered by warranty, or by a repair or service contract.
(c) Except as provided in subsections (d)-(f), if on lease termination the holder assesses excess wear and tear charges on the lessee, the holder shall:
(1) send to the lessee record notice of the nature and amount of such charges within business days after termination of the lease;
(2) provide the lessee reasonable time and opportunity for the lessee or another person designated by the lessee to examine the goods, and access to the goods for that purpose; the time is reasonable if it is no less than days after the holder sends the notice under subsection (c)(1); and
(3) afford the lessee an opportunity for prompt resolution of any dispute by reinspection by an independent inspector agreeable to the holder and lessee. The cost of the reinspection shall be [borne by the lessee] [shared equally by the holder and lessee.]
(d) In the case of a motor vehicle lease, the holder shall, not more than [90] nor less than [30] days prior to scheduled termination of the lease, provide the lessee record notice of lessee's rights under subsection (e):
(e) In connection with the termination of a motor vehicle lease:
(1) Lessee may have the vehicle inspected for excess wear and tear by the holder or holder's designated inspector, or by an independent inspector agreeable to the holder, within [20] days before scheduled termination of the lease;
(2) Subject to paragraph (3), a record report of an inspection under paragraph (1) is binding on the holder if the lessee either pays the excess wear and tear charges indicated, or has necessary repairs made at lessee's expense, by the time the vehicle is returned at the scheduled termination of the lease; and
(3) Lessee remains responsible for excess wear and tear that was not reasonably detectable by an inspection under paragraph (1), was incurred after the inspection and before return of the vehicle, or was the result of incomplete or improper repairs.
(4) If no inspection for excess wear and tear occurs before termination of the lease, the holder may not collect excess wear and tear charges unless the holder provides to the lessee record notice of the nature and amount of such charges within a reasonable time after lease termination. Notice is presumed reasonable if given within [30? 60? 90?] days after lease termination.]
(f) A motor vehicle lease may provide for the imposition of a charge for excess mileage. [Such a charge shall be reasonable in light of the expected diminution in value of the vehicle on account of the excess mileage.]
Section 501. PRIVATE REMEDIES.
(a) A holder who violates this Act is liable to the lessee for actual damages suffered as a consequence of the violation.
(b) Whether or not a lessee seeks or is entitled to damages, the lessee may bring an action for declaratory or injunctive relief.
(c) Except as otherwise provided in this section, in an action in which it is determined that a holder has violated any of the following provisions of this Act,
Sec. 203(a)-(f) [Disclosure; Form of Lease Record; Copy to Lessee]
Sec. 204 [Insurance Disclosures]
Sec. 205(b) [Notice to Secondary Obligor]
Sec. 206 [Information During Lease Term; Satisfaction of Lease],
the lessee is entitled to
[Option A: , in addition to any actual damages under subsection (a), an award of statutory damages in the amount of [$500.00?] ]
[Option B: actual damages under subsection (a) or statutory damages in the amount of [$500.00?] , whichever is greater.
(d) Except as otherwise provided in this section, in an action in which it is determined that a holder has violated any of the following provisions of this Act,
Sec. 301 [Payment or Trade-in Pending Approval of Lease; Refund or Return]
Sec. 302(a) [Prohibited Lease Terms]
Sec. 303(b) [Security Interest Restricted]
Sec. 304 [Delinquency and Default Charges; Attorney's Fees]
Sec. 305(a) [Assignment of Lease]
Sec. 306(b) [Sublease]
Sec. 309 [Rebate or Discount for Referrals]
Sec. 310 [Limit on Insurance Charges; Termination and Replacement of Insurance]
Sec. 402 [Liability for Gap Amount on Total Loss of Goods]
Sec. 403(b) [Lessee's Default; Right to Cure]
Sec. 404 [Repossession; Application of Realized Value]
Sec. 405(c) [Manner of Determining Realized Value]
Sec. 406(a), (b), (d) [Early Termination Liability]
Sec. 407 [Excess Wear and Tear; Excess Mileage]
the lessee may recover
[Option A: , in addition to any actual damages under subsection (a), statutory damages in an amount no less than [$50.00?] and no greater than [$2,000.00?] , to be determined by the court.
[Option B: the greater of actual damages under subsection (a) or statutory damages in an amount no less than [$50.00?] and no greater than [$2,000.00?] , to be determined by the court.]
In determining the amount of statutory damages the court shall consider, among other relevant factors, the seriousness of the violation, the amount of actual damages caused, the extent to which the violation is isolated or repetitive and intentional or inadvertent, and lessor's efforts at pre-violation compliance and post-violation cure.
(e) In a class action under subsection (c) or (d):
(1) The lessee class is entitled to an award of statutory damages in such amount as the court may allow, except that as to each member of the class no minimum recovery is applicable, and the total recovery of statutory damages in any class action or series of class actions arising out of the same failure to comply by the same holder may not be more than the lesser of $500,000 or 1 per centum of the net worth of the holder that committed the violation; and.
(2) In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the holder, the resources of the holder, the number of lessees adversely affected, and the extent to which the holder's failure of compliance was intentional.
(f) In a successful action under subsections (a), (b), (c), or (d) a lessee is also entitled to the costs of the action and reasonable attorney's fees as determined by the court. In determining the award of attorney's fees, the amount of the lessee's recovery is not controlling.
(g) A holder has no liability under this section if, within [60 ?] days after discovering a violation of this Act, and prior to the institution of an action under this section or the receipt of written notice of the violation from the lessee, the holder notifies the lessee concerned and corrects the violation(s), including refund, restitution or crediting of any charges improperly disclosed or imposed.
(h) A holder is not liable for a violation of this Act if the holder shows by a preponderance of evidence that the violation was unintentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of bona fide errors include, but are not limited to, clerical errors, calculation errors, computer malfunctions and programming errors, except that an error of legal judgment with respect to a holder's obligations under this Act is not a bona fide error.
(i) When there are multiple lessees in a lease, there shall be no more than one recovery of statutory damages under subsection (b)(2).
(j) Except as provided in subsection (k), an action under this section may be brought within [one/two]? years from the date of the occurrence of the violation which is the subject of the action. For this purpose an action is "brought"--
(1) when a lessee initiates an action against a holder; or
(2) when a lessee raises a violation of this Act as a defense or counterclaim in an action initiated against the lessee (including proceedings in insolvency).
(k) A lessee's claim for actual or statutory damages under this section may be raised by way of recoupment in an action on the lease without regard to the time limitations prescribed by subsection (g).
(l) No liability arises under this section with respect to an act done or omitted in good faith in conformity with any rule, regulation or interpretation of this Act, or in conformity with any approval, by [the Attorney General or other enforcement authority under section 503] notwithstanding that after such act or omission has occurred, such rule, regulation, interpretation or approval is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
(m) The multiple failure to disclose to a lessee any information required to be disclosed under this Act entitles the lessee to a single recovery under this section but continued failure to disclose after a recovery has been granted gives rise to rights to additional recoveries.
(n) A lessee may not take any action to offset any amount for which a holder is potentially liable to the lessee under subsection (b) against any amount owed by the lessee, unless the amount of the holder's liability under subsection (b) has been determined by judgment of a court of competent jurisdiction in an action to which the lessee was a party. This subsection does not bar a lessee then in default under the lease from asserting a violation of this Act as an original action, or as a defense or counterclaim to an action brought by a holder to collect amounts owed by the lessee.
(o) Notwithstanding section 305(b), and except where the assignment is involuntary, an action for a violation of this Act which may be brought against a holder may be maintained against a subsequent holder only if the violation is apparent on the face of the lease. For purposes of this subsection, a violation is apparent on the face of the lease if:
(1) a required disclosure is omitted or can be determined to be incomplete or inaccurate from the face of the lease or other documents assigned; or
(2) the lease contains a prohibited provision or does not contain the notices, legend or items required by this Act.
(p) For purposes of this section, "lessee" includes a trustee or receiver in insolvency proceedings, a personal representative of a deceased lessee, or other successor in interest of a lessee.
Section 502. EFFECT OF VIOLATION ON RIGHTS OF PARTIES; ELECTION OF REMEDIES.
(a) Except as otherwise specifically provided in this Act, a violation of this Act by a holder does not impair the holder's rights on the lease.
(b) If the same act or omission that violates this Act also violates other law, the lessee is entitled to the larger of the monetary remedies authorized by this Act or the other law.
Section 503. ADMINISTRATIVE ENFORCEMENT. This Act shall be enforced by the [Attorney General, Credit Code Administrator, or similar public agency]. For this purpose the [Attorney General, Credit Code Administrator, or similar public agency] shall have the powers and remedies provided in the [state Unfair or Deceptive Acts or Practices Act (UDAP), or comparable consumer fraud law].
[Section 504. ADMINISTRATION OF ACT.
(a) The [designate public official or office] shall administer this Act, and shall have the authority to issue rules, regulations, interpretations or approvals designed to effectuate the consumer protection purposes of this Act, prevent circumvention or evasion thereof, facilitate compliance therewith, avoid preemption by the federal Consumer Leasing Act, and assure consistent interpretations with those of other states enacting substantially this Uniform Consumer Leases Act.
(b) Rules, regulations, interpretations or approvals pursuant to this section shall be promulgated in accordance with [appropriate state administrative procedure act].
(c) To keep the [Administrator's] rules, regulations, interpretations or approvals in harmony with the rules of administrators in other jurisdictions that enact substantially the Uniform Consumer Leases Act, the [Administrator], so far as is consistent with the purposes, policies, and provisions of this Act, shall:
(1) before adopting, amending, and repealing rules, regulations, interpretations or approvals, advise and consult with administrators in other jurisdictions that enact substantially the Uniform Consumer Leases Act; and
(2) in adopting, amending, and repealing rules, regulations, interpretations or approvals, take into consideration the rules, regulations, interpretations or approvals of administrators in other jurisdictions that enact substantially the Uniform Consumer Leases Act.]
Section 601. CONSTRUCTION AGAINST IMPLICIT REPEAL. This Act being a general act intended as a unified coverage of its subject matter, no part of it shall be construed to be impliedly repealed by subsequent legislation if that construction can reasonably be avoided.
Section 602. SEVERABILITY.
If any provision of this Act or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Act which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
Section 603. EFFECTIVE DATE; TRANSITION.
(a) This Act takes effect at 12:01 a.m. on [ ] [and applies to a lease consummated thereafter].
(b) A lease entered into before this Act takes effect and the rights, duties and interests flowing from it thereafter may be terminated, completed, or enforced as required or permitted by any statute, rule of law, or other law amended, repealed, or modified by this Act as though the repeal, amendment, or modification had not occurred; but this Act applies to a renegotiation made after this Act takes effect as to a lease whenever previously entered into.
Section 604. SPECIFIC REPEALER AND AMENDMENTS.
(1) The following acts and parts of acts are repealed:
(a)
(b)
(2) The following acts and parts of acts are amended:
(a)
(b)