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RTO Online
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Connecticut
Rental Purchase Factoids |
| Connecticut not only defines disclosures, but also the
order in which they must appear |
| Total to acquire ownership MUST NOT EXCEED 2 X the cash
price |
| 50% of rental payments must go towards ownership |
| When 50% of payments made = cash price, ownership is
transferred and agreement terminated |
| Must use the terms 'New' or 'Used' |
Total of rental payments to acquire ownership must be
described as
"rent-to-own price" |
| The difference between Cash Price and Rent to own price
must be listed under a separate heading |
| Maximum 'insurance' charge is 5% of payment |
| Maximum in home collection fee is $5 and may only be
charged IN LIEU OF not in addition to late fees |
| Late fee grace periods are 5 days for monthly agreements
and 3 days for less than monthly periods. |
| Maximum late fee is 5% of payment with a $1 minimum |
| Payments mailed in must use the postmark date when
determining whether late fees are applied |
| Maximum processing fee is $10 |
| Liability damage waiver fees may not exceed 7 1/2% of
payment and MUST PROVIDE replacement of the property |
Reinstatement rights extend as followed if property is
returned...
30 days if less than 1/3 to acquire ownership has been paid...
90 days if between 1/3 and 2/3 has been paid...
180 days if more than 2/3 has been paid |
| Early purchase option must be available anytime after
initial payment and is calculated as Cash price - 50% of payments made |
Price tags are required and must state...
(1) The
cash price of the property;
(2) The amount of the periodic payment; and
(3) The total amount that must be paid to acquire ownership of the property. |
This is a feature of the Connecticut Rental
Purchase Statute. We
have included a printable version of the bill
RTO Online maintains links to all available State Statutes
on our Regulations page.
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Following is the Connecticut Statute in its entirety
Current as of 09-30-02
Please check with your legislature to verify
Connecticut Rental Purchase Statute
Effective since 1999
Sec. 42-240. Definitions.
As used in sections 42-240 to 42-253, inclusive:
(1) "Advertisement" means any oral, written or
graphic statement or representation made in connection with the solicitation
of business in any manner by a lessor and includes, but is not limited to,
statements and representations made in any newspaper or other publication, or
on radio or television or printed in any catalog, circular or any other sales
literature or brochure.
(2) "Cash price" means the price at which a lessor in the ordinary course of
business would in good faith offer the property that is the subject of a
rent-to-own agreement to the lessee for cash on the date of the rent-to-own
agreement.
(3) "Consummation" means the time a lessee becomes contractually obligated on
a consumer rent-to-own agreement.
(4) "Rent-to-own agreement" means an agreement for the use of personal
property by an individual primarily for personal, family or household
purposes, for an initial period of four months or less, whether or not there
is any obligation beyond the initial period, that is automatically renewable
with each payment and that permits the consumer to become the owner of the
property. Any rent-to-own agreement which complies with sections 42-240 to
42-253, inclusive, shall not be construed to be, nor be governed by the laws
of this state regulating, any of the following:
(A) A "retail installment contract" as defined in
section 36a-770;
(B) A "security interest" as that term is defined
in section 42a-1-201(37).
(5) "Lessee" means a natural person who rents
personal property under a consumer rent-to-own agreement.
(6) "Lessor" means a person who regularly provides the use of property through
consumer rent-to-own agreements and to whom the obligation is initially
payable on its face.
(7) "Personal property" means any property that is not real property under the
laws of the state where it is located when it is made available for a consumer
rent-to-own agreement.
(P.A. 91-162, S. 1, 18.)
Sec. 42-241. Written agreement
Information which must be disclosed.
(a) A rent-to-own agreement shall be a written
statement and shall include the following information in the following order:
(1) A brief description of the rented property,
sufficient to identify the property to the lessee and lessor. If the agreement
is for multiple items, a description of each item may be provided in a
separate statement which is incorporated by reference in the primary
disclosure statement;
(2) Whether the property is new or used;
(3) The total amount of any initial payment,
including any advance payment, delivery charge or any trade-in allowance, to
be paid by the lessee at or before consummation of the rent-to-own agreement;
(4) The amount and timing of renewal payments;
(5) The cash price of the rented property at the
time of consummation. If the rent- to-own agreement is for two or more items,
then the aggregate cash price for all items shall satisfy this requirement;
(6) The total number of payments and the total
amount of such payments necessary to acquire ownership, to be denominated
"rent-to-own price";
(7) The difference between the cash price and the
rent-to-own price;
(8) A statement that the lessee has the option to
purchase the rented property during the term of the rent-to-own agreement by
the formula for early purchase set forth in section 42-249;
(9) The lessee's right to reinstate a terminated
rent-to-own agreement and the amount, or method of determining the amount, of
any penalties or other charges for reinstatement as established in section
42-246;
(10) The amount of all other charges, individually
itemized, payable by the lessee to the lessor, which are not included in the
renewal payments;
(11) A statement indicating which party shall be
liable for loss, damage in excess of normal wear and tear or destruction of
the rented property;
(12) A statement that the lessor is responsible for
maintaining or servicing the rented property, together with a brief
description of this responsibility;
(13) A statement of the conditions under which the
lessee or lessor may terminate the agreement;
(14) A statement that, if any part of a
manufacturer's warranty continues to cover the rented property at the time the
lessee assumes ownership of the property, it will be passed on to the lessee
if allowed by the terms of the warranty;
(15) A statement that the rent-to-own agreement may
be cancelled by the lessee without penalty at any time;
(16) If the rent-to-own agreement is sold as a
negotiable instrument, a statement that any holder of the rent-to-own
agreement shall be subject to all claims and defenses which the lessee could
assert against the lessor.
(b) All information required by this section shall be
stated in a clear and coherent manner, using words and phrases of common
meaning, and all rent-to-own agreements shall comply with sections 42-151 to
41-158, inclusive. A rent-to-own agreement shall be dated and in writing. The
printed portion of the agreement shall be in at least eight- point type. The
cash price, rent-to-own price, and the difference between the two amounts shall
be in at least ten-point, boldface type. The information shall be appropriately
divided and captioned by its sections. All numerical amounts and percentages
shall be stated in figures. The information shall be disclosed by the lessor to
the lessee prior to the signing of the agreement by the lessee. All the
information required by this section shall be provided directly on the agreement
or instrument or on a separate form.
(c) In a consumer rent-to-own agreement, the lessor
shall make the disclosures required by this section in the manner required by
subsection (b) of this section before consummation of the rent-to-own agreement.
(d) At the lessor's option, information in addition
to that required by this section may be disclosed if the additional information
is not stated, utilized or placed in a manner which will contradict, obscure or
distract attention from the required information.
(P.A. 91-162, S. 2, 18.)
Sec. 42-242. Prohibited provisions
(a) A rent-to-own agreement shall not contain a
provision requiring:
(1) A garnishment of wages, a power of attorney to
confess a judgment or an assignment of wages;
(2) Authorization to the lessor or a person acting
on the lessor's behalf to unlawfully enter upon the lessee's premises or to
commit any breach of the peace in attempting to repossess the rented property;
(3) The lessee to waive any defense, counterclaim
or right of action against the lessor or a person acting on the lessor's
behalf as the lessor's agent;
(4) The lessee to agree not to assert against a
lessor or against an assignee of the lessor a claim or defense arising out of
the agreement.
(b) A lessor may not require a lessee to authorize
the lessor or a person acting on the lessor's behalf to unlawfully enter upon
the lessee's premises or to commit any breach of the peace in attempting to
repossess the rented property.
(P.A. 91-162, S. 3, 18.)
Sec. 42-243. Lessor prohibited from imposing
certain charges upon lessee. Permitted charges.
A lessor shall not charge a lessee for:
(1) Any insurance whether in connection with the
transaction or otherwise, except that a charge may be made for property
insurance for the rented property if the charge is clearly disclosed as
optional and does not exceed five per cent of the rental renewal payment;
(2) In-home collection of a payment unless the
lessee has expressly agreed to the fee and the amount of the fee is disclosed.
This fee may not exceed five dollars, may not be assessed until after the
expiration of the grace periods described in subdivision (3) of this section,
may not be assessed more than three times in any six-month period, and may be
charged in lieu of, but not in addition to, any allowable late charge;
(3) Late payment of an installment unless the
lessee has expressly agreed to the fee and the amount of the fee is disclosed.
No such fee shall be assessed on any rental payment that is made within five
days after the due date on rent-to-own agreements with monthly renewal dates
and within three days after the due date on rent-to-own agreements with
renewal dates more frequent than monthly. Thereafter a lessor may assess a
late charge not to exceed five per cent of the late renewal payment or five
dollars, whichever is less, except that a minimum late charge of one dollar
may be assessed. Only one late fee may be assessed upon any delinquent renewal
payment, regardless of the period during which it remains in default, and
payments, when received, shall first be applied to the most recent payment
due. With respect to renewal payments accepted by mail or by store deposit
box, no lessor shall assess a late fee for payments which are postmarked or
received before the expiration of the applicable grace periods;
(4) Early termination of a rent-to-own agreement or
for the return of an item at any point;
(5) Picking up the rented property;
(6) A separate payment in excess of the weekly or
monthly rental renewal payment in order to acquire ownership of the rented
property;
(7) An application fee or processing fee in excess
of ten dollars.
(P.A. 91-162, S. 4, 18.)
See Sec. 1-2a re construing of references to "United States mail" or "postmark"
to include references to any delivery service designated by the Secretary of the
Treasury pursuant to Section 7502 of the Internal Revenue Code of 1986 or any
successor to the code, as amended, and to any date recorded or marked as
described in said Section 7502 by a designated delivery service and construing
of "registered or certified mail" to include any equivalent designated by the
Secretary of the Treasury pursuant to said Section 7502.
Sec. 42-244. Prohibited provisions void. Agreement
not otherwise affected.
Any provision in a rent-to-own agreement which is
prohibited by sections 42-240 to 42-253, inclusive, shall be void, but shall not
otherwise affect the validity of the rent- to-own agreement.
(P.A. 91-162, S. 5, 18.)
Sec. 42-245. Liability damage waiver. Fee. Notice.
Prohibitions and requirements.
In addition to the other charges permitted by section
42-243, the parties may contract for a liability waiver fee not to exceed seven
and one-half per cent of any periodic rental payment. The selling or offering
for sale of a liability damage waiver pursuant to this section is subject to the
following prohibitions and requirements:
(1) A lessor may not sell or offer to sell a
liability damage waiver unless all restrictions, conditions and exclusions are
printed in the rent-to-own agreement, or in a separate agreement, in
eight-point type, or larger, or written in pen and ink or typewritten in or on
the face of the rent-to-own agreement in a blank space provided therefor. The
liability damage waiver may exclude only loss or damage to the property which
is the subject of the rent-to-own agreement caused intentionally by the lessee
or which results from the lessee's wilful or wanton misconduct.
(2) The liability damage waiver agreement pursuant
to this section must include a statement of the total charge for the liability
damage waiver. The liability damage waiver agreement must display in
eight-point boldface type the following notice:
NOTICE
THIS CONTRACT OFFERS, FOR AN ADDITIONAL CHARGE, A LIABILITY DAMAGE WAIVER TO
COVER YOUR RESPONSIBILITY FOR DAMAGE TO THE PROPERTY. BEFORE DECIDING WHETHER TO
PURCHASE THE LIABILITY DAMAGE WAIVER, YOU MAY WISH TO DETERMINE WHETHER YOUR OWN
HOMEOWNERS OR CASUALTY INSURANCE AFFORDS YOU COVERAGE FOR DAMAGE TO THE RENTAL
PROPERTY, AND THE AMOUNT OF THE DEDUCTIBLE UNDER YOUR OWN INSURANCE COVERAGE.
THE PURCHASE OF THIS LIABILITY DAMAGE WAIVER IS NOT MANDATORY AND MAY BE
DECLINED.
(3) The liability damage waiver agreement must provide:
(A) That the property which is lost, damaged or destroyed will be replaced
with substitute property of substantially comparable quality and condition;
and
(B) That the total amount of rental renewal payments necessary to acquire
ownership of the substitute property shall not exceed the total amount of
rental renewal payments which would have been necessary to acquire ownership
of the original property at the time it was lost, damaged or destroyed.
(P.A. 91-162, S. 6, 18.)
Sec. 42-246. Reinstatement of terminated
agreement
(a) If the property is returned to the lessor other
than through judicial process, the lessee shall be entitled to reinstate the
terminated agreement as follows:
(1) If the lessee has paid less than one-third of
the total amount of payments necessary to acquire ownership of the property,
the lessee shall be entitled to reinstate the terminated agreement within
thirty days from the expiration of the grace period for the rental term for
which the lessee last made a rental payment;
(2) If the lessee has paid one-third but less than
two-thirds of the total amount of payments necessary to acquire ownership of
the property, the lessee shall be entitled to reinstate the terminated
agreement within ninety days from the expiration of the grace period for the
rental term for which the lessee last made a rental payment;
(3) If the lessee has paid two-thirds or more of
the total amount of payments necessary to acquire ownership of the property,
the lessee shall be entitled to reinstate the terminated agreement within one
hundred eighty days of the expiration of the grace period for the rental term
for which the lessee last made a rental payment.
(b) Before reinstating a rent-to-own agreement, a
lessor may require a lessee to pay any unpaid rental payments, delinquency
charges, a reasonable reinstatement fee of not more than five dollars, and a
delivery charge if redelivery of the rented property is necessary.
(c) On reinstatement, the lessor shall provide the
lessee with the same property or substitute property of substantially comparable
quality and condition. If substitute property is provided, the lessor shall
provide the disclosures required in section 42-241.
(d) Only one reinstatement fee may be assessed for a
delinquent renewal payment regardless of the period during which it remains in
default.
(P.A. 91-162, S. 7, 18.)
Sec. 42-247. Written notice of assignment of
lessor's right to receive payment under the agreement.
The lessee shall pay the original lessor until the
lessee receives written notification of an assignment of the lessor's rights to
payment pursuant to a rent- to-own agreement and that payment is to be made to
the assignee. A notification which does not reasonably identify the rights
assigned is ineffective. If requested by the lessee, the assignee must furnish
reasonable proof that the assignment has been made and, unless he does so, the
lessee may pay the lessor.
(P.A. 91-162, S. 8, 18.)
Sec. 42-248. Limit on total rental payments.
Lessee to acquire ownership when fifty per cent of all
rental payments made by lessee equals cash price of rented property. Termination
of agreement.
(a) No lessor shall offer a rent-to-own agreement
in which the total of rental payments necessary to acquire ownership exceeds
twice the cash price of the rented property.
(b) When fifty per cent of all rental payments made
by a lessee equals the cash price of the property disclosed to the lessee in
the rent-to-own agreement, the lessee shall own the rented property and the
rent-to-own agreement shall terminate.
(P.A. 91-162, S. 9, 18.)
Sec. 42-249. Lessee's early purchase option.
At any time after the initial payment, the lessee may
acquire ownership of the property by tendering an amount equal to the cash price
of the property minus fifty per cent of all previous renewal payments made.
(P.A. 91-162, S. 10, 18.)
Sec. 42-250. Advertisement of rent-to-own
agreements. Disclosure.
(a) An advertisement for a rent-to-own agreement that
refers to or states the amount of a payment and the right to acquire ownership
of any one particular item under the agreement shall clearly and conspicuously
state:
(1) That the transaction advertised is a
rent-to-own agreement;
(2) The total number of payments and the total
amount to be paid to acquire ownership;
(3) The circumstances under which the consumer can
acquire ownership of the property.
(b) Any personal property displayed or offered under
a rent-to-own agreement shall bear a tag which clearly and conspicuously
indicates:
(1) The cash price of the property;
(2) The amount of the periodic payment; and
(3) The total amount that must be paid to acquire
ownership of the property.
(P.A. 91-162, S. 11, 18.)
Sec. 42-251. Violations. Lessee's right to
minimum recovery, set-off and counterclaim. Attorney's fees and court costs.
(a) A violation of any provision of sections 42-240 to
42-253, inclusive, shall be deemed an unfair or deceptive trade practice under
subsection (a) of section 42-110b.
(b) If a lessor violates any provision of sections
42-240 to 42-253, inclusive, with respect to any rent-to-own agreement, the
lessee in such agreement may, recover from the person committing the violation,
or may set-off or counterclaim in any action by such person, actual damages with
a minimum recovery of two hundred fifty dollars, plus attorney's fees and court
costs.
(P.A. 91-162, S. 12, 18.)
Cited. 231 C. 707, 727.
Sec. 42-252. Lessor's obligations.
A lessor shall have the same obligations as a seller
under sections 42a-1-203, 42a-2-302, subsection (b) of section 42a-2-103 and
sections 42a-2-312 to 42a-2-318, inclusive, and the same obligations as a
creditor under sections 36a-645 to 36a-647, inclusive. Any rent-to-own agreement
shall be subject to the provisions of section 52-572g.
(P.A. 91-162, S. 13, 18.)
Sec. 42-253. Action must be brought within three
years.
No action shall be brought under the provisions of
sections 42-240 to 42-253, inclusive, more than three years after the person
bringing the action knew or should have known of the occurrence of the alleged
violation.
(P.A. 91-162, S. 14, 18.)
Secs. 42-254 to 42-259. Reserved for
future use.
end
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