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07-29-02
RTO Online
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NY Rental
Purchase Factoids |
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A rental-purchase
agreement must be written in English and in any other language used in
advertisement. |
| Customer
may review written agreement for 24 hours prior to signing |
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Early purchase option
discount must be 50% and the total cannot exceed the cash price |
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Cash Price may not exceed
50% of total cost |
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Early purchase option can
be exercised at any time |
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Late fee grace periods
are 3 days for weekly and 7 days for monthly |
Consumer right to
re-instate without losing any rights is on a 'sliding scale'.
If the merchandise is voluntarily returned...
30 days minimum or
60 days if customer has paid 1/2 total payments
180 Days if customer has paid 3/4 of total payments |
We have received several requests recently for the New York State Rental
Purchase Agreement Statute. While not easy to find, it is available online. 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 States Rental Purchase Statute,
please email
here
Following is Article 11 in its entirety
Read Disclaimer Current as of 07-29-02
Please check with your legislature to verify
New York State Consolidated Laws
Personal Property
ARTICLE 11
RENTAL PURCHASE AGREEMENTS
Section 500.
Definitions.
501. Form.
502. Availability.
503. Total cost.
504. Early purchase
option.
505. Advertisement.
506. Exempted
transactions.
507. Enforcement.
S 500. Definitions. For the purposes of this article:
1. "Advertisement" means a commercial message in any medium that
directly
or indirectly promotes or assists a rental-purchase agreement.
2. "Cash price" means the price at which a merchant, in the ordinary course
of business, would offer to sell the merchandise to the consumer for
cash
on the date of the rental-purchase agreement.
3. "Consumer" means an individual who leases
personal property under a
rental-purchase agreement.
4. "Merchandise" means the personal property
that is the subject of a
rental-purchase agreement.
5. "Merchant" means a person who, in the
ordinary course of business,
regularly leases, offers to lease, or acts as an agent for the leasing
of
merchandise under a rental-purchase agreement.
6. "Rental-purchase agreement" means an
agreement for the use of
merchandise by a consumer for personal, family, or household purposes, for
an initial period of four months or less,
that is renewable with each
payment after the initial period and that permits the lessee to become the
owner of the property. An agreement that complies with this article is not
a retail installment sales contract, agreement or obligation as defined in
this chapter or a security interest as defined in subdivision thirty-seven
of section 1-201 of the uniform commercial code.
S 501. Form. 1. A
rental-purchase agreement must be written in plain
English and in any other language used by the merchant in an advertisement
related to the rental-purchase agreement. Numerical amounts must be stated
in figures.
2. Disclosures required by this section must be printed or
typed in each
rental-purchase agreement in a size equal to at least ten-point bold-faced
type.
3. A rental-purchase agreement may not contain a provision:
(a) requiring a confession of judgment;
(b) authorizing a merchant or an agent of the merchant to commit a
breach
of the peace in the repossession of merchandise;
(c) waiving a defense, counterclaim, or right the consumer may have against
the merchant or an agent of the merchant;
(d) requiring the purchase of insurance from the
merchant to cover the
merchandise;
(e) requiring the payment of a late charge or reinstatement
fee unless a
periodic payment is delinquent for more than three days for agreements that
are renewed on week by week terms and seven days for
agreements that are
renewed on month by month terms, and the charge or fee is in an amount not
more than the greater of ten percent of the
delinquent amount or three
dollars for agreements that are renewed on week by week terms and not more
than the greater of ten percent of the delinquent amount or
five dollars
for agreements that are renewed on month by month terms. In the event that
multiple items are leased to a consumer
pursuant to more than one
rental-purchase agreement, any late fee imposed pursuant to this
section
shall not exceed ten percent of the total of the periodic payments that are
delinquent.
(f) requiring a payment in addition to regular periodic payments in
order
to acquire ownership of the merchandise or requiring
periodic payments
totalling more than the cost to acquire ownership, as provided in
section
five hundred three of this article.
4. Only one late charge or reinstatement
fee may be assessed for a
delinquent periodic payment regardless of the period
during which it
remains in default. No merchant shall assess a late charge for a
periodic
payment made in full on its due date or within three days for
agreements
that are renewed on week by week terms or seven days for
agreements that
are renewed on month by month terms
when the only delinquency is
attributable to late fees assessed on earlier periodic
payments. With
respect to payments accepted by mail or by store deposit box, no
merchant
shall assess a late fee for payments which are
post-marked or received
before the expiration of the applicable delinquency periods.
5. A rental-purchase agreement must provide that:
(a) a charge in addition to periodic payments, if any, must be
reasonably
related to the cost of a service performed;
(b) a consumer who fails to make a
timely payment may reinstate an
agreement without losing rights or options previously acquired and without
incurring any charges, other than rental charges for the time he possessed
the property, except for those charges provided for in paragraph
(e) of
subdivision three of section five hundred one of this article by making the
required payment before the later of seven days or half the number of days
in a regular payment period after the due date of the payment; and
(c) if the merchandise is returned or
voluntarily surrendered by the
consumer, other than through judicial process,
during the applicable
reinstatement period set forth in paragraph (b) of this
subdivision, the
consumer`s right to reinstate the agreement as set forth in paragraph
(b)
of this subdivision shall be extended for a period of not less than thirty
days after the date of the return of the merchandise. If a
consumer has
paid one-half the total of payments necessary to acquire
ownership, the
right to reinstate the agreement shall be extended for a period of not less
than sixty days after the date of the return
of the merchandise. If a
consumer has paid three-quarters of the total of payments
necessary to
acquire ownership, the consumer`s rights to reinstate the agreement
shall
be extended for a period of not less than one hundred eighty days after the
return of the merchandise.
6. This section does not prevent a merchant from attempting to
repossess
merchandise during the reinstatement period, provided in paragraph (b)
of
subdivision five of this section. The consumer`s
right to reinstate an
agreement does not expire because of such a repossession. On reinstatement,
the merchant shall provide the consumer with
the same merchandise or
substitute merchandise of comparable quality and condition. If
substitute
merchandise is provided, the merchant shall provide the consumer
with the
disclosures required in subdivision seven of this section.
7. A rental-purchase agreement must disclose
in a conspicuous and
informative fashion:
(a) a description of the merchandise provided;
(b) whether the merchandise is new or used, provided however, that it shall
not be a violation of this section to indicate that the merchandise is used
if it is actually new;
(c) the amount and timing of rental-purchase payments;
(d) the total number of payments and the total amount that must be paid to
acquire ownership of the merchandise, which amount shall
be explicitly
labelled "total cost";
(e) the amount and purpose of any payment, charge, or fee, in
addition to
the regular periodic payments;
(f) whether the consumer is liable for loss or damage to the
merchandise
and, if so, the maximum amount for which the consumer may be liable, which
in the case of loss shall in no
event be greater than the price the
consumer would have paid to exercise an early purchase option pursuant
to
this article. In the case of damage to the merchandise, other than
normal
wear and tear the consumer shall be liable for the lesser of the price the
consumer would have paid to exercise an early purchase option
pursuant to
this article or the cost of the repair as determined by the merchant;
(g) that the consumer does not acquire ownership rights unless the consumer
has complied with the ownership terms of the agreement;
(h) the cash price of the merchandise; and
(i) a statement of the conditions under which a consumer may
exercise an
early purchase option and under which the
merchant or consumer may
otherwise terminate the lease.
S 502. Availability. Every rental purchase agreement
shall indicate that a
consumer at his or her written request shall be permitted
to review a
completed rental-purchase agreement for up to twenty-four
hours prior to
signing.
S 503. Total cost. No
merchant shall offer a rental-purchase agreement
requiring periodic payments totalling more than an amount, fifty percent of
which equals the cash price of merchandise. When periodic payments made by
a consumer total an amount, fifty percent of which equals the cash price of
the merchandise, the consumer shall acquire ownership of the
merchandise
and the rental-purchase agreement shall terminate.
S 504. Early purchase option. At any time,
after the initial payment, the
consumer may acquire ownership of the property by tendering an amount equal
to the cash price of the merchandise minus fifty percent of
all previous
rental-purchase payments made.
S 505. Advertisement. 1. An advertisement for a
rental-purchase agreement
that refers to or states the amount of a payment or the right to
acquire
ownership of any one particular item under the agreement shall clearly and
conspicuously state:
(a) that the transaction advertised is a rental-purchase agreement;
(b) the total number of payments and the total amount to be paid to acquire
ownership, which amount shall be explicitly labeled "total cost"; and
(c) the circumstances under which the
consumer can acquire ownership
rights.
2. An advertisement for personal property available through rental-purchase
agreements that refers to more than one appliance or particular item
and
includes information on periodic
payment amounts shall include a
representative item available at that amount and shall conspicuously state:
(a) that the merchandise offered may be new or used;
(b) that transaction advertised is a rental-purchase agreement; and
(c) that the consumer does not acquire ownership rights unless the consumer
complies with the ownership terms of the agreement.
3. Every item displayed or offered under a rental-purchase agreement shall
have clearly and conspicuously indicated in arabic numerals, so as
to be
readable and understandable by visual inspection, each
of the following
affixed to the item:
(a) the cash price of the merchandise;
(b) the amount of the periodic payment and the total
number of periodic
payments required for ownership; and
(c) the total amount that must be paid to acquire ownership of merchandise,
which amount shall be explicitly labeled total cost.
S 506. Exempted transactions. This article does not
apply to:
1. Agreements for the rental of merchandise in which the person who
rents
the merchandise has no legal right to become the owner of the property
at
the end of the rental period;
2. A lease of a safe deposit box; and
3. Retail installment sales agreements, contracts, or obligations.
S 507. Enforcement. 1. A
consumer who has suffered a loss due to a
violation of this article by a merchant is entitled to recover
from the
merchant actual damages, reasonable attorney`s fees and court costs.
2. Whenever a court finds that a
consumer has been injured because a
merchant acted in bad faith in its performance under this
article, the
merchant shall be subject to a penalty of not less than one hundred dollars
nor more than one thousand dollars as determined by the court.
3. A violation of this article is a deceptive trade practice under section
three hundred forty-nine of the general business law.
4. Whenever there shall be a violation of this article an
application may
be made by the attorney general in the name of the people of the state
of
New York to a court or justice having jurisdiction to issue an injunction,
and upon notice to the defendant of not less than five days, to enjoin and
restrain the continuance of such violations; and if it shall appear to the
satisfaction of the court or justice, that the defendant has,
in fact,
violated this section an injunction may be issued by such court or justice
enjoining and restraining any further violation, without requiring
proof
that any person has, in fact, been injured or damaged thereby. In any such
proceeding, the court may make allowances to the
attorney general as
provided in paragraph six of subdivision (a)
of section eighty-three
hundred three of the civil practice law and rules, and direct restitution.
Whenever the court shall determine that a violation of
this article has
occurred, the court may impose a civil penalty of not
more than five
hundred dollars for each violation. In connection with any
such proposed
application the attorney general is authorized to take proof and
make a
determination of the relevant facts and to issue subpoenas in
accordance
with the civil practice law and rules.
5. Nothing in this article shall be construed so as to nullify
or impair
any right or rights which a consumer may have against a merchant at common
law, by statute, or otherwise.
6. A merchant or assignee may not be held liable in an action brought under
this article for a violation of this article that was
unintentional and
resulted from a bona fide or clerical error notwithstanding the maintenance
of procedures reasonably adopted to avoid any such error.
7. An action shall not be brought under this article more than four
years
after the occurrence of the act, method or practice which is the subject of
the action or more than one year after the last payment in a
transaction
involving the method, act or practice which is the subject of the
action,
whichever is later.
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