|
RTO Online
|
|
|
Iowa
Rental Purchase Factoids |
| Iowa regulates window displays and price tags as
'advertisement' |
| The Iowa rental purchase act does not apply to
transactions for more than $25,000 |
| Must use the terms 'New' or 'Used' |
| Customer may exercise early purchase option at
any time |
| Early purchase option is regulated. Must be the
difference between 50% of payments made and cash price |
| Law states you must supply a written receipt
"without request" when a cash payment is made |
| Minimum 50% of payments must go towards cash
price |
| When 50% of payments made = cash price,
ownership is transferred |
| Addition or deletion of items on a multi item
agreement does not constitute a 're-negotiation unless payment amount goes
up 25% |
| Offering insurance is allowed as long as it
meets the requirements of section
537.2501, subsection 2, paragraph "a" |
| Non refundable administrative fee' may not
exceed $10 |
| Delivery fee may be charged IN LIEU OF, not in
addition to administrative fee. |
| Delivery fee may not exceed $10...or $25 for
agreements with more than 5 items |
| In home collection fee of $7 may be charged IN
LIEU OF any late fee |
| Max late fee $5 for monthly and $3 for weekly
agreements |
| Grace period is 5 business days for monthly and
3 business days for weekly agreements |
| Re-instatement fee may not exceed $5 |
|
Taxes must be separately disclosed |
A radio or billboard advertisement must disclose...
1. That the transaction advertised is a consumer rental purchase agreement
2. That the lessee will not own the property until the total amount
necessary to acquire ownership is paid in full or by prepayment as provided
for by law. |
|
Customer may re-instate for 60 days |
|
A customer is not in 'default' unless they refuse to return the property |
|
Notice of default must be in writing. Iowa supplies a sample
form |
|
Statute of limitations is 2 years |
This is a feature of the Iowa 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.
New
Side by side comparison of ALL state
rent to own laws.
If you would like RTO Online to feature your State Rental Purchase Statute,
please email
here
Read Disclaimer
Following is the Iowa Statute in its entirety
Current as of 10-11-02
Please check with your legislature to verify
Iowa Consumer Rental Purchase Agreement Act
Effective since 1987
537.3601 Short title
This part of article 3 may be known and may be cited as the "Consumer Rental
Purchase Agreement Act".
Section History: Recent form 87 Acts, ch 80, §1
537.3602 Purposes--rules of construction.
1. This part shall be liberally construed and applied to
promote its underlying purposes and policies.
2. The underlying purposes and policies of this part are to:
a. Define, simplify, and clarify the law governing
consumer rental purchase agreements.
b. Provide certain disclosures to consumers who enter
into consumer rental purchase agreements, and further consumer understanding
of the terms of consumer rental purchase agreements.
c. Protect consumers against unfair practices.
d. Permit and encourage the development of fair and
economically sound rental purchase practices.
e. Make the law on consumer rental purchase agreements,
including administrative rules, more uniform among the various uniform
consumer credit code jurisdictions.
3. A reference to a requirement imposed by this part
includes a reference to a related rule of the administrator adopted pursuant to
this chapter.
Section History: Recent form 87 Acts, ch 80, §2
537.3603 Exclusions.
This part does not apply to, and an agreement which complies with this part is
not governed by, the provisions regarding:
1. A consumer credit sale as defined in section 537.1301,
subsection 12.
2. A consumer lease as defined in section 537.1301,
subsection 13.
3. A consumer loan as defined in section 537.1301,
subsection 14.
4. A lease or agreement which constitutes a "credit sale"
as defined in 12 C.F.R. § 226.2(a16), and the Truth In Lending Act, 15 U.S.C.
§ 1602(g), or an agreement which constitutes a "sale of goods" under section
537.1301, subsection 36.
5. A lease which constitutes a consumer lease as defined
in 12 C.F.R. § 213.2(a6).
6. A lease or agreement which constitutes a security
interest as defined in section 554.1201, subsection 37.
Section History: Recent form 87 Acts, ch 80, §3; 88 Acts, ch 1134, §97
537.3604 General
definitions.
As used in this part, unless otherwise required by the context:
1. "Administrator" means the administrator as designated
in section 537.6103.
2. "Advertisement" means a commercial message in any
medium, including signs, window displays, and price tags, that promotes,
directly or indirectly, a consumer rental purchase agreement.
3. "Cash price" means the price at which the lessor in the
ordinary course of business would offer to sell the personal property to the
lessee for cash on the date of the consumer rental purchase agreement.
4. "Consummation" means the time at which the lessee
enters into a consumer rental purchase agreement.
5. "Lessee" means a natural person who rents personal
property under a consumer rental purchase agreement for personal, family, or
household use.
6. "Lessor" means a person who, in the ordinary course of
business, regularly leases, offers to lease, or arranges for the leasing of
property under a consumer rental purchase agreement.
7. "Personal property" means any property that is not real
property under the laws of this state when it is made available for a consumer
rental purchase agreement.
8. "Consumer rental purchase agreement" means an agreement
for the use of personal property in which all of the following are applicable:
a. The lessor is regularly engaged in the rental
purchase business.
b. The agreement is 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 lessee to become the owner of the property.
c. The lessee is a person other than an organization.
d. The lessee takes under the consumer rental purchase
agreement primarily for a personal, family, or household purpose.
e. The amount payable under the consumer rental
purchase agreement does not exceed twenty-five thousand dollars.
Section History: Recent form 87 Acts, ch 80, §4
Internal References Referred to in § 422.45, 422.52, 535.17, 537.1301
537.3605 Disclosures.
In a consumer rental purchase agreement, the lessor shall disclose the following
items, as applicable:
1. The total of scheduled payments accompanied by an
explanation that this term means the "total dollar amount of lease payments
you will have to make to acquire ownership".
2. By item, the total number, amounts, and timing of all
lease payments and other charges including taxes or official fees paid to or
through the lessor which are necessary to acquire ownership of the property.
3. Any initial or advance payment such as a delivery
charge, security deposit, or trade-in allowance.
4. A statement that the lessee will not own the property
until the lessee has made the total of payments necessary to acquire ownership
of the property.
5. A statement that the total of payments does not include
additional charges such as late payment charges, and a separate listing and
explanation of these charges as applicable.
6. If applicable, a statement that the lessee is
responsible for the fair market value of the property if and as of the time it
is lost, stolen, damaged, or destroyed.
7. A description of the goods or merchandise including
model numbers as applicable and a statement indicating whether the property is
new or used. It is not a violation of this subsection to indicate that the
property is used if it is actually new.
8. A statement that at any time after the first periodic
payment is made, the lessee may acquire ownership of the property by
exercising the option to purchase the property, and at what price, or by what
formula or method the purchase price will be determined. It is not a violation
of this subsection for the lessor and the lessee to agree in writing to allow
the lessee to acquire ownership of the property for less than the amounts
referred to in this subsection.
9. The cash price of the merchandise.
Section History: Recent form 87 Acts, ch 80, §5; 89 Acts, ch 128, §1
Internal References Referred to in § 537.3606, 537.3608, 537.3610, 537.3612,
537.3616
537.3606 Form
requirements.
1. The disclosure information required by section 537.3605 and
this section shall be disclosed in a consumer rental purchase agreement, and
shall meet the following requirements:
a. Be made clearly and conspicuously with items
appearing in logical order and segregated as appropriate for readability and
clarity.
b. Be made in writing.
c. Except as provided in subsection 2 or in rules
adopted by the administrator, need not be contained in a single writing or
made in the order set forth in section 537.3605.
d. May be supplemented by additional information or
explanations supplied by the lessor, but none shall be stated, used or placed
so as to mislead or confuse the lessee, or to contradict, obscure, or detract
attention from the information required by section 537.3605, and so long as
the additional information or explanations do not have the effect of
circumventing, evading, or unduly complicating the information required to be
disclosed by section 537.3605.
2. The lessor shall disclose all information required by
section 537.3605 before the consumer rental purchase agreement is consummated.
These disclosures shall be made on the face of the writing evidencing the
consumer rental purchase agreement.
3. Before any payment is due, the lessor shall furnish the
lessee with an exact copy of each consumer rental purchase agreement, which
shall be signed by the lessee and which shall evidence the lessee's agreement.
If there is more than one lessee in a consumer rental purchase agreement,
delivery of a copy of the consumer rental purchase agreement to one of the
lessees constitutes compliance with this part; however, a lessee not signing the
agreement is not liable under it.
4. The administrator may adopt by rule requirements for the
order, acknowledgment by initialing, and conspicuousness of the disclosures set
forth in section 537.3605. These rules may allow these disclosures to be made in
accordance with model forms prepared by the administrator.
5. The terms of the consumer rental purchase agreement,
except as otherwise provided in this part, shall be set forth in not less than
eight point standard type, or such similar type as prescribed in rules adopted
by the administrator.
6. Every consumer rental purchase agreement shall contain
immediately above or adjacent to the place for the signature of the lessee, a
clear, conspicuous, printed or typewritten notice in substantially the following
language:
NOTICE TO LESSEE--READ BEFORE SIGNING
a. DO NOT SIGN THIS BEFORE YOU READ THE ENTIRE AGREEMENT INCLUDING ANY
WRITING ON THE REVERSE SIDE, EVEN IF OTHERWISE ADVISED.
b. DO NOT SIGN THIS IF IT CONTAINS ANY BLANK SPACES.
c. YOU ARE ENTITLED TO AN EXACT COPY OF ANY AGREEMENT YOU SIGN.
d. YOU HAVE THE RIGHT TO EXERCISE ANY EARLY BUY-OUT OPTION AS PROVIDED IN
THIS AGREEMENT. EXERCISE OF THIS OPTION MAY RESULT IN A REDUCTION OF YOUR
TOTAL COST TO ACQUIRE OWNERSHIP UNDER THIS AGREEMENT.
e. IF YOU ELECT TO MAKE WEEKLY RATHER THAN MONTHLY PAYMENTS AND EXERCISE
YOUR PURCHASE OPTION, YOU MAY PAY MORE FOR THE LEASED PROPERTY.
7. The notice described in subsection 6 shall be in bold
face, ten point type.
Section History: Recent form 87 Acts, ch 80, §6
Internal References Referred to in § 537.3612
537.3607 Receipts.
The lessor shall furnish the lessee, without request, an itemized written
receipt for each payment in cash, or any other time the method of payment itself
does not provide evidence of payment.
Section History: Recent form 87 Acts, ch 80, §7
537.3608 Acquiring
ownership.
1. A lessor shall not offer a consumer rental purchase
agreement in which fifty percent of all lease payments necessary to acquire
ownership of the leased property exceeds the cash price of the leased property.
When fifty percent of all lease payments made by a lessee equals the cash price
of the property disclosed to the lessee pursuant to section 537.3605, subsection
9, the lessee shall acquire ownership of the leased property and the agreement
shall terminate.
2. At any time after tendering an initial lease payment, a
lessee may acquire ownership of the property that is the subject of the consumer
rental purchase agreement by tendering an amount equal to the amount by which
the cash price of the leased property exceeds fifty percent of all lease
payments made by the lessee.
3. It is not a violation of this section for the lessor and
the lessee to agree in writing to allow the lessee to acquire ownership of the
property for less than the amounts referred to in this section.
Section History: Recent form 87 Acts, ch 80, §8; 89 Acts, ch 128, §2
Internal References Referred to in § 537.3610
537.3609 Renegotiation.
1. A renegotiation occurs when an existing consumer rental
purchase agreement is satisfied and replaced by a new consumer rental purchase
agreement undertaken by the same lessor and lessee. A renegotiation is a new
lease requiring new disclosures.
2. However, the following events are not renegotiations:
a. The addition or return of property in a multi-item
agreement or the substitution of the leased property, if in either case the
lease payment is not changed by more than twenty-five percent.
b. A deferral or extension of one or more lease
payments, or portions of a lease payment.
c. A reduction in charges in the agreement.
d. A lease or agreement involved in a court proceeding.
Section History: Recent form 87 Acts, ch 80, §9
537.3610 Balloon payments prohibited.
A lessee shall not be required, as a condition to acquiring ownership, to make a
payment that is more than twice the amount of a regular rental payment, or to
pay lease payments totaling more than the cost to acquire ownership as disclosed
pursuant to section 537.3605. This section does not apply to payments made
pursuant to section 537.3608, 537.3612, or 537.3619.
Section History: Recent form 87 Acts, ch 80, §10
537.3611 Prohibited
charges.
A lessor shall not make a charge for any of the following:
1. Any insurance whether in connection with the
transaction or otherwise, except that a charge may be made for property
insurance on the leased property if the charge is clearly disclosed as
optional and all other requirements of section 537.2501, subsection 2,
paragraph "a", are met.
2. A penalty for early termination of a consumer rental
purchase agreement or for the return of an item at any point, except for those
charges authorized by sections 537.3612 and 537.3613.
3. Payment by a cosigner of the consumer rental purchase
agreement of any fees or charges which could not be imposed upon the lessee as
part of the consumer rental purchase agreement.
Section History: Recent form 87 Acts, ch 80, §11
537.3612 Additional
charges.
1. In a consumer rental purchase agreement, the lessor may
contract for and receive an initial nonrefundable administrative fee not to
exceed ten dollars. If a security deposit is required by the lessor, the amount
and conditions under which it is returned must be disclosed with the disclosures
required by sections 537.3605 and 537.3606.
2. In a consumer rental purchase agreement, the lessor may
contract for and receive a delivery charge not to exceed ten dollars or, in the
case of a consumer rental purchase agreement covering more than five items, a
delivery charge not to exceed twenty-five dollars. A delivery charge may be
assessed only if the lessor actually delivers the items to the lessee's dwelling
and the delivery charge is disclosed with the disclosures required by sections
537.3605 and 537.3606. The delivery charge may be assessed in lieu of and not in
addition to the initial administrative charge in subsection 1 of this section.
3. In a consumer rental purchase agreement, a lessor may
contract for and receive a charge for picking up payments from the lessee if the
lessor is required or requested to visit the lessee's dwelling to pick up a
payment. In a consumer rental purchase agreement with payment or renewal dates
which are more frequent than monthly, this charge shall not be assessed more
than three times in any three-month period. In consumer rental purchase
agreements with payments or renewal options which are at least monthly, this
charge shall not be assessed more than three times in any six-month period. A
charge assessed pursuant to this subsection shall not exceed seven dollars. This
charge is in lieu of any delinquency charge assessed for the applicable payment
period.
4. In a consumer rental purchase agreement, the parties may
contract for late charges or delinquency fees as follows:
a. For consumer rental purchase agreements with monthly
renewal dates, a late charge not exceeding five dollars may be assessed on any
payment not made within five business days after either payment is due or the
return of the property is required.
b. For consumer rental purchase agreements with weekly
or biweekly renewal dates, a late charge not exceeding three dollars may be
assessed on any payments not made within three business days after either
payment is due or the return of the property is required.
A late charge on a consumer rental purchase agreement may be collected only
once on any accrued payment, no matter how long it remains unpaid. A late charge
may be collected at the time it accrues or at any time thereafter. A late charge
shall not be assessed against a payment that is timely made, even though an
earlier late charge has not been paid in full.
Section History: Recent form 87 Acts, ch 80, §12
Internal References Referred to in § 537.3610, 537.3611, 537.3616
537.3613 Reinstatement
fees.
A reinstatement fee as provided for in section 537.3616 shall not equal more
than the outstanding balance of any missed payments and delinquency charges on
those missed payments plus an additional reinstatement fee that shall not exceed
five dollars.
Section History: Recent form 87 Acts, ch 80, §13
Internal References Referred to in § 537.3611
537.3614 Taxes and
official fees.
1. If the amount is separately disclosed in the agreement, the
lessor may require the lessee to pay all applicable state and county sales, use,
and personal property taxes levied as a result of the execution of the consumer
rental purchase agreement, provided that the lessor pays the full amount of
these taxes to the appropriate authorities.
2. If the amount is separately disclosed in the agreement,
the lessor may contract for and receive from the lessee an amount equal to all
official fees required to be paid under the consumer rental purchase agreement
provided that the lessor pays the full amount of these fees to the appropriate
authorities.
Section History: Recent form 87 Acts, ch 80, §14
537.3615 Advertising.
1. An advertisement for a consumer rental purchase agreement
shall not state or imply that a specific item is available at specific amounts
or terms unless the lessor usually and customarily offers or will offer that
item at those amounts or terms.
2. If an advertisement for a consumer rental purchase
agreement refers to or states the amount of any payment, or the right to acquire
ownership, for a specific item, the advertisement must also clearly and
conspicuously state the following terms as applicable:
a. That the transaction advertised is a consumer rental
purchase agreement.
b. The total of payments necessary to acquire ownership.
c. That the lessee will not own the property until the
total amount necessary to acquire ownership is paid in full or by prepayment
as provided for by law.
3. Notwithstanding the requirements of subsection 1, if the
advertisement is published by way of radio announcement or on a roadside
billboard, the lessor need only make the disclosures required by subsection 2,
paragraphs "a" and "c".
4. With respect to any matters specifically governed by the
advertising provisions of the federal Consumer Credit Protection Act, compliance
with that Act satisfies the requirements of this section.
5. This section does not apply to the owner or personnel, as
such, of any medium in which an advertisement appears or through which it is
disseminated.
Section History: Recent form 87 Acts, ch 80, §15
537.3616 Lessee's reinstatement rights.
1. A lessee who fails to make timely rental payments has the
right to reinstate the original consumer rental purchase agreement without
losing any rights or options previously acquired under the consumer rental
purchase agreement if both of the following apply:
a. Subsequent to having failed to make a timely rental
payment, the lessee has surrendered the property to the lessor, if and when
requested by the lessor.
b. Not more than sixty days has passed since the lessee
has returned the property.
2. As a condition precedent to reinstatement of a consumer
rental purchase agreement, a lessor may charge the outstanding balance of any
accrued payments and delinquency charges, a reinstatement fee, and the delivery
charges allowable by section 537.3612, subsection 2, if redelivery of the item
is necessary.
3. If reinstatement occurs pursuant to this section, the
lessor shall provide the lessee with the same item, if available, leased by the
lessee prior to reinstatement. If the same item is not available, a substitute
item of comparable worth, quality, and condition may be used. If a substitute
item is provided, the lessor shall provide the lessee with all the information
required by section 537.3605.
Section History: Recent form 87 Acts, ch 80, §16
Internal References Referred to in § 537.3613, 537.3619
537.3617 Unconscionability.
Unconscionability in consumer rental purchase agreements is governed by section
537.5108.
Section History: Recent form 87 Acts, ch 80, §17
537.3618 Default.
An agreement of the parties to a consumer rental purchase agreement with respect
to default on the part of the lessee is enforceable only to the extent that one
of the following apply:
1. The lessee both fails to renew an agreement and also
fails to return the rented property or make arrangements for its return as
provided by the agreement.
2. The prospect of payment, performance, or return of the
property is materially impaired due to a breach of the consumer rental
purchase agreement; the burden of establishing the prospect of material
impairment is on the lessor.
Section History: Recent form 87 Acts, ch 80, §18
Internal References Referred to in § 537.5110, 537.5111
537.3619 Cure of default.
1. In a consumer rental purchase agreement, after a lessee has
been in default for three business days and has not voluntarily surrendered
possession of the rented property, a lessor may give the lessee the notice
provided in subsection 3 when the consumer has the right to cure a default. A
lessor gives the notice to the lessee under this section when the lessor
delivers notice to the lessee or mails the notice to the last known address of
the lessee.
2. For the purpose of this section, there is no right to
cure and no limitation on the lessor's rights with respect to a default that
occurs within twelve months after an earlier default as to which a lessor has
given a proper notice of the lessee's right to cure.
3. The notice of right to cure must be in writing and
conspicuously state all of the following:
a. The name, address, and telephone number of the lessor
to whom payment is to be made.
b. A brief identification of the transaction.
c. The lessee's right to cure the default.
d. The amount of payment and date by which payment must
be made to cure the default. A notice in substantially the following form
complies with this subsection:
THE NAME, ADDRESS, & TELEPHONE NUMBER OF THE LESSOR ACCOUNT NUMBER, IF
ANY BRIEF IDENTIFICATION OF TRANSACTION
( ) is the last date for payment, ( ) is the amount now due. You
have failed to renew your rental purchase agreement(s). If you pay the
amount now due (above) by the last date for payment (above), you may
continue with the agreement as though you had renewed on time. If you do not
pay by that date, we may exercise our rights under the law. If you are late
again during the next twelve months of your agreement, in either returning
the property or renewing your agreement, we may exercise our rights without
sending you another notice like this one. If you have questions, you may
write or telephone the lessor promptly.
4. With respect to a consumer rental purchase agreement,
except as provided in subsection 5, after a default consisting of the lessee's
failure to renew and failure to return the property, a lessor, because of that
default, may not instigate court action to recover the rented property until
five business days after the notice of the lessee's right to cure is given. In
the case of an agreement with weekly or biweekly renewal dates, such action
shall not be taken until three business days after the notice of the lessee's
right to cure is given.
5. With respect to defaults on the same consumer rental
purchase agreement and subject to subsection 4, after a lessor has once given a
proper notice of the lessee's right to cure, this section does not give the
consumer a right to cure or impose any additional limitations beyond those
otherwise imposed by this part on the lessor's right to proceed against the
lessee or the lessor's right to recover the property.
6. Until expiration of the minimum applicable periods
contained in subsection 4 after notice is given, the lessee may cure all
defaults consisting of failure to renew and failure to return the property by
tendering the amount of all unpaid sums due at the time of the tender plus any
unpaid delinquency charges or other charges authorized by section 537.3616.
7. This section and the provisions on limitations of
agreements do not prohibit a lessee from voluntarily surrendering possession of
the rented property, and the lessor from enforcing any past due obligation which
the lessee may have at any time after default. However, in an enforcement
proceeding, the lessor shall affirmatively plead and prove either that the
notice to cure is not required or that the lessor has given the required notice,
but the failure to so plead does not invalidate any action taken by the lessor
that is lawful and if the lessor has rightfully repossessed any property the
repossession is not conversion.
8. A repossession of rented property in violation of this
section is void.
Section History: Recent form 87 Acts, ch 80, §19
Internal References Referred to in § 537.3610
537.3620 Willful and intentional violations.
A person who willfully and intentionally violates a provision of this part is
guilty of a serious misdemeanor.
Section History: Recent form 87 Acts, ch 80, §20
Internal References Referred to in § 537.3622
537.3621 Damages.
In case of a violation of a provision of this part with respect to a consumer
rental purchase agreement, or a violation of the Iowa debt collection practices
Act, article 7 of this chapter, where a debt arises in connection with a
consumer rental purchase agreement, the lessee in the agreement may recover from
the person committing the violation, or may set off or counterclaim in an action
by that person, actual damages, with a minimum recovery of three hundred dollars
or twenty-five percent of the total cost to acquire ownership under the consumer
rental purchase agreement, whichever is greater; attorneys' fees; and court
costs.
Section History: Recent form 87 Acts, ch 80, §21; 89 Acts, ch 128, §3
Internal References Referred to in § 537.3622
537.3622 Effect of
correction.
Notwithstanding sections 537.3620 and 537.3621, a failure to comply with a
provision of this part which is due to a bona fide error may be corrected within
thirty days after the date of execution of the consumer rental purchase
agreement by the lessee. If so corrected, neither the lessor nor any holder is
subject to penalty under this section if, where appropriate, a new written
agreement and disclosures are provided to the lessee and any excess charges are
refunded to the lessee.
Section History: Recent form 87 Acts, ch 80, §22
537.3623 Statute of
limitations.
An action shall not be brought under this part more than two years after the
occurrence of the alleged violation.
Section History: Recent form 87 Acts, ch 80, §23
537.3624 Enforcement.
1. The provisions of this part are subject to the powers and
functions of the administrator as provided in article 6 of this chapter and to
the debt collection practices as provided in article 7 of this chapter. However,
section 537.6113, subsection 2, does not apply to violations of this part.
2. If a court finds in an action brought by the
administrator pursuant to section 537.6113 that it is proven that a lessor has
intentionally acted in bad faith in its performance under this part, the lessor
is subject to a civil penalty of not less than one hundred dollars nor more than
one thousand dollars for each violation. However, no more than one penalty may
be imposed in any one action against a lessor for repeated violations of the
same provision. A civil penalty pursuant to this subsection shall not be imposed
for a violation of this part occurring more than two years before the action is
brought, or for making unconscionable agreements or engaging in a course of
fraudulent or unconscionable conduct.
Section History: Recent form 87 Acts, ch 80, §24
end
|
Help us improve
Rate this article
|
Home
|
