10-1-680.

This article shall be known and may be cited as the "Lease-purchase Agreement Act."

10-1-681.  As used in this article, the term:

(1) "Lease-purchase agreement" means an agreement for the use of personal property by a lessee primarily 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.

Lease-purchase agreements shall not include any of the following:

(A) A lease or agreement which constitutes a credit sale as
defined in 12 C.F.R. 226.2(a)(16) and Section 1602(g) of the
Truth-in-Lending Act, 15 U.S.C. Section 1601, et seq.;

(B) A lease which constitutes a consumer lease as defined in 12
C.F.R. 213.2(a)(6);

(C) Any lease for agricultural, business, or commercial
purposes;

(D) Any lease made to an organization; or

(E) A lease or agreement which constitutes a retail installment
transaction as defined in paragraph (10) of subsection (a) of
Code Section 10-1-2.

(2) "Lessee" means a person who leases property pursuant to a
lease-purchase agreement.

(3) "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 lease-purchase agreement.

(4) "Period" means a day, week, month, or other subdivision of a
year.

10-1-682.
   
  (a) A lease-purchase agreement shall be in the form of a written
  statement which shall include all of the following:
   
    (1) A brief description of the leased property, sufficient to
    identify the property to the lessee and lessor including whether
    the property is new or previously rented or, if a lease 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) 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 lease-purchase
    agreement;
   
    (3) The amount and timing of payments;
   
    (4) The amount of all other charges, individually itemized,
    payable by the lessee to the lessor which are not included in the
    periodic payments;
   
    (5) A statement of the party liable for loss, damage in excess of
    normal wear and tear, or destruction to the leased property;
   
    (6) The lessee's right to reinstate and the amount, or method of
    determining the amount, of any penalty or other charge for
    reinstatement as established in Code Section 10-1-686;
   
    (7) The party responsible for maintaining or servicing the leased
    property together with a brief description of this responsibility;
   
    (8) A statement of the conditions under which the lessee or lessor
    may terminate the lease;
   
    (9) A statement of the total cost of the lease expressed as the
    product of the number of payments necessary to acquire ownership
    of the leased property times the amount of each payment, using the
    term "cost of lease";
   
    (10) A statement that the lessee has the option to purchase the
    leased property during the term of the lease-purchase agreement
    and, at what price, formula, or by what method the price is
    determined;
   
    (11) A statement that if any part of a manufacturer's warranty
    continues to cover the leased property at the time the lessee
    assumes ownership of the property, if allowed by the terms of the
    warranty, it will be passed on to the lessee;
   
    (12) The fair market value of the leased property at the time it
    is initially leased to the lessee, using the term "estimated fair
    market value of the leased property," provided that in the case of
    property that has been previously leased the lessor may establish
    a standard value that may be used in lieu of a specific valuation
    for an individual item; and
   
    (13) The difference between the amount disclosed under paragraph
    (9) of this subsection and the amount disclosed under paragraph
    (12) of this subsection, using the term "cost of lease services."
   
  (b) All information required by this Code section shall be stated in
  a clear and coherent manner, using words and phrases of common
  meaning.  The information shall be appropriately divided and
  captioned by its sections. All numerical amounts and percentages
  shall be stated in figures.  The information shall also be disclosed
  by the lessor prior to the signing of the lease by the lessee.  All
  of the information required by this Code section shall be provided
  directly on the lease contract or instrument or on a separate form.
  The disclosures described in paragraphs (1), (2), (3), (4), (9),
  (12), and (13) of subsection (a) of this Code section shall be made
  clearly, conspicuously, and together in sequence and shall be
  prominently located on the same page of the contract or other
  instrument evidencing the lease.
   
  (c) At the lessor's option, information in addition to that required
  by this Code 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.
 

10-1-683.
   
  (a) An advertisement for any lease-purchase agreement shall not
  state that a specific lease of any property at specific amounts or
  terms is available unless the lessor usually and customarily leases
  or will lease the property at those amounts or terms.
   
  (b) An advertisement for any lease-purchase agreement shall not
  state that a payment or a periodic payment is due at the start of a
  lease of a specific item without disclosing both the payment due at
  the start of the lease, the periodic payment, the cost of lease
  services, and the total of all periodic payments necessary to obtain
  ownership.
 

10-1-684.
   
  A lease-purchase agreement shall not contain a provision:
   
    (1) Requiring a garnishment of wages or a power of attorney to
    confess a judgment;
   
    (2) Granting 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 the repossession of goods;
   
    (3) Requiring 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 lessee's agent on the lessor's behalf or
    as the lessee's agent) in collection of payments under the lease
    or in the repossession of goods;
   
    (4) Requiring the lessee to agree not to assert against a lessor
    or against an assignee a claim or defense arising out of the
    lease;
   
    (5) Requiring any collection or repossession charges in excess of
    those allowable under Code Section 10-1-7 and applicable court
    rules; or
   
    (6) Providing that the lessee cannot return the leased property to
    the lessor at the end of any term.
 

10-1-685.
   
  (a) A lessor shall not require the purchase of insurance by the
  lessee from the lessor of a leased item.
   
  (b) A lessor shall not impose a penalty for early termination of a
  lease-purchase agreement or for the return of an item at any point.
   
  (c) A lessor shall not impose a fee for in-home collection of a
  payment unless the lessee has expressly agreed to the fee and the
  amount of the fee is disclosed.
   
  (d) A lessor shall not impose a fee for picking up rental property
  should the lessee choose to terminate the lease.
   
  (e) A lessor shall not impose a fee for making a late payment except
  the charge for reinstatement as established in Code Section
  10-1-686.
 

10-1-686.
   
  (a) A lessee who fails to make timely periodic payments shall have
  the right to reinstate the original lease-purchase agreement without
  losing any rights or options previously acquired under the
  lease-purchase agreement if both of the following apply:
   
    (1) The lessee has not missed more than three periodic payments;
    and
   
    (2) One periodic payment has been missed and the lessee has
    surrendered the item to the lessor, if requested by the lessor,
    during the time in which payments were missed.
   
  (b) A lessee shall not be charged more than one reinstatement fee
  per missed periodic payment.  A reinstatement fee shall equal the
  outstanding balance of any missed payments plus a charge which shall
  not exceed $5.00 per missed payment.  A delivery fee not to exceed
  the original delivery fee may be charged if redelivery of an item is
  necessary.
   
  (c) If reinstatement occurs pursuant to this Code section, the
  lessor shall provide the lessee with either the same item leased by
  the lessee prior to reinstatement or a substitute item of comparable
  quality and condition.  If a substitute item is provided, the lessor
  shall provide the lessee with all of the information required in
  Code Section 10-1-682.
 

10-1-687.
   
  (a) Any person who shall willfully and intentionally violate any
  provision of this article shall be guilty of a misdemeanor and, upon
  conviction thereof, shall be punished by a fine not to exceed
  $500.00 for the first offense and as for a misdemeanor for each
  subsequent offense.
   
  (b) In case of a violation of any provision of this article, with
  respect to any transaction, the lessee in such transaction 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 $300.00 or 25 percent of the cost of the lease
  to acquire ownership, whichever is greater, attorneys' fees, and
  court costs.  However, the lessor shall not be liable for any error
  in estimating the fair market value required in paragraph (12) of
  subsection (a) of Code Section 10-1-682 unless said estimate shall
  be proved to have been made in bad faith.
   
  (c) Notwithstanding this Code section, any failure to comply with
  any provisions in this article may be corrected within ten days
  after the date of execution of the lease-purchase agreement by the
  lessee, and, if so corrected, neither the lessor nor any holder is
  subject to any penalty under this Code section.
 

10-1-688.
    
  No action shall be brought under this article more than four years
  after the person bringing this action knew or should have known of
  the occurrence of the alleged violation.

10-1-689.
   
  The following form is an example of the form which may be used to
  satisfy the disclosure requirements of subsection (b) of Code
  Section 10-1-682, requiring that the disclosures described in
  paragraphs (1), (2), (3), (4), (9), (12), and (13) of subsection (a)
  of Code Section 10-1-682 be made clearly, conspicuously,
  prominently, and together in sequence:
   
                      LEASE-PURCHASE DISCLOSURES
   
    1. Description of leased property:
       Item  Quantity  Serial #  Mfg. Model  Condition
       ____  ________  ________  __________  _________
       ____  ________  ________  __________  _________
   
    2. Total payment due at beginning of contract:
       Lease payment:    ____
       Delivery charge:  ____
       Sales tax:        ____
       Other:            ____
       Total:            ____
   
    3. Lease payments:
       1. You may renew the lease weekly or monthly as you choose.
       2. The weekly rental is $____.
       3. The monthly rental is $____.
   
    4. Other charges:
       1. Reinstatement fee $_____
       2. (Specify all others)
   
    5. Cost of lease:
       If you renew this lease each week/month for ____ weeks/months,
       you will pay a total of $_____ to own this property.  This
       total includes all costs included in the first lease payment.
   
    6. Estimated fair market value of the leased property:
       The estimated fair market value of the property you are leasing
       is $_____.
   
    7. Cost of lease services:
       The difference between the amount in item 5 and item 6 above is
       $_____.  This is the cost of services to you under this lease
       if you elect to renew this lease for the number of terms
       necessary to acquire ownership of the leased property.
   
  I have read the above statement before signing this agreement.
   
  Date:_____________________  Lessee:______________________
  Date:_____________________  Lessee:______________________