§ 1351.01 Definitions.
Text of Statute
As used in this chapter:
(A) "Advertisement" means any written, visual, or oral communication made to a
lessee or prospective lessee by means of personal representation, newspaper,
magazine, circular, billboard, direct mailing, sign, radio, television,
telephone, or other means of communication, that aids, promotes, or assists,
directly or indirectly, a lease-purchase agreement.
(B) "Cash price" means the price at which a lessor in the ordinary course of
business would offer the property that is the subject of a lease-purchase
agreement to the lessee for cash on the date of the lease-purchase agreement. It
may include sales taxes.
(C) "Lessee" means an individual who leases personal property pursuant to a
lease-purchase agreement.
(D) "Lessor" means a person who, in the ordinary course of business, regularly
offers to lease or arranges for personal property to be leased pursuant to a
lease-purchase agreement.
(E) "Personal property" means any property that is not real property under the
laws of the state where it is located when it is offered or made available for a
lease-purchase agreement.
(F) "Lease-purchase 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 that is automatically renewable
with each lease payment after the initial period and that permits the lessee to
acquire ownership of the property. It does not include any of the following:
(1) A lease for agricultural, business, or commercial purposes;
(2) A lease made to an organization;
(3) A lease of money or intangible personal property;
(4) A lease of a motor vehicle as defined in section 4501.01 of the Revised
Code.
HISTORY: 142 v H 421. Eff 6-29-88.
The provisions of § 3 of HB 421 (142 v --) read as follows:
SECTION 3. Chapter 1351. of the Revised Code shall be known as "Lease-Purchase
Agreements."
§ 1351.02 Required disclosures in connection with
lease-purchase agreement
Text of Statute
(A) A lessor shall disclose all of the following in a clear and conspicuous
manner:
(1) A brief description of the leased property, sufficient to identify the
property to the lessee and lessor and a statement as to whether the property is
new, used, or previously leased. If a lease is for multiple items of property, a
description of each item may be provided in a separate statement incorporated by
reference in the lease-purchase agreement or 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 lease payments;
(4) The amount of all other charges, individually itemized, payable by the
lessee to the lessor, that are not included in the lease payments;
(5) The party who is liable for loss, damage in excess of normal wear and tear,
or destruction of the leased property;
(6) The right of the lessee to reinstate as set forth in section 1351.05 of the
Revised Code and the amount or method of determining the amount of the
delinquency charges, reinstatement fee, or delivery charge for reinstatement;
(7) The party responsible for maintaining or servicing the leased property and a
brief description of the responsibility;
(8) The conditions upon which the lessee or lessor may terminate the lease prior
to the expiration of the lease term;
(9) The total of all initial payments, all lease payments, and all other charges
necessary to acquire ownership of the leased property;
(10) That the lessee has the option to purchase the leased property during the
lease term and at what price, or by what formula or method the purchase price
will be determined;
(11) The cash price of the personal property that is the subject of the
lease-purchase agreement;
(12) That if any part of a manufacturer's warranty exists on the leased property
when a lessee acquires ownership of the property, the warranty will be
transferred to the lessee;
(13) That the lessee is not required to purchase insurance for the property that
is the subject of the lease from the lessor or from any insurer owned or
controlled by the lessor;
(14) A notice in a prominent place in at least twelve-point type or in legible
print with letters at least one-eighth inch in size, in substantially the
following form:
"NOTICE: THIS LEASE-PURCHASE AGREEMENT IS REGULATED BY STATE LAW AND MAY BE
ENFORCED BY THE ATTORNEY GENERAL OR BY PRIVATE LEGAL ACTION."
(B) Every lease-purchase agreement shall be in writing. The information required
by this section shall be disclosed by the lessor prior to the signing of the
lease-purchase agreement by the lessee and shall be disclosed either in the
lease-purchase agreement or on a dated, separate piece of paper that identifies
the lease-purchase agreement and the parties to it.
(C) The disclosures required by this section shall be printed or typed in at
least ten-point boldface type, and numerical amounts and percentages shall be
stated in figures. All information required by this 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.
(D) A lessor may disclose information that is not required by this section if
the additional information is not stated, used, or placed in a manner that will
contradict, obscure, or distract attention from the required information.
(E) With respect to matters specifically governed by the "Consumer Credit
Protection Act," 15 U.S.C. 1667, 90 Stat. 257, as amended, compliance with such
act satisfies the requirements of this section.
HISTORY: 142 v H 421. Eff 6-29-88.
§ 1351.03 Prohibited provisions of agreement.
Text of Statute
(A) A lease-purchase agreement shall not contain a provision that requires a
lessee to do any of the following:
(1) Execute a warrant of attorney to confess judgment;
(2) Authorize the lessor or an agent of the lessor to commit a breach of the
peace in the repossession of property that is the subject of the lease-purchase
agreement;
(3) Waive a defense, counterclaim, or any right the lessee has against the
lessor or an agent of the lessor.
(B) No lease-purchase agreement shall provide that mere failure to return
property constitutes probable cause for a criminal action.
HISTORY: 142 v H 421. Eff 6-29-88.
§ 1351.04 Terms lessor may not require.
Text of Statute
A lessor shall not require any of the following from a lessee:
(A) The purchase of insurance from the lessor for property that is the subject
of a lease-purchase agreement;
(B) Any payment in addition to the number of lease payments specified in the
lease-purchase agreement other than the payment described in division (B) of
section 1351.06 of the Revised Code, that is required in order for the lessee to
acquire ownership of the leased property;
(C) Lease payments that in the aggregate exceed the maximum permissible amount
set forth in section 1351.06 of the Revised Code;
(D) A penalty for early termination of a lease-purchase agreement or for the
return of any leased property at any time;
(E) A fee for in-home collection of a lease payment unless the amount of the fee
is disclosed and the lessee expressly has agreed to pay the fee.
HISTORY: 142 v H 421. Eff 6-29-88.
§ 1351.05 Lessee's right to reinstate agreement after
default; grace period.
Text of Statute
(A) A lessee who fails to make timely lease payments has the right to reinstate
the original lease-purchase agreement without losing any rights or options
previously acquired under the lease-purchase agreement within three lease terms
after the expiration of the last lease term for which the lessee made a timely
payment if the lessee surrenders the leased property to the lessor when the
lessor or its agent requests him to surrender the leased property.
(B) Before reinstating a lease-purchase agreement, a lessor may require a lessee
to pay any unpaid lease payments, delinquency charges, a reasonable
reinstatement fee of not more than five dollars, and a delivery charge if
redelivery of the leased property is necessary.
(C) If reinstatement occurs pursuant to this section, the lessor shall provide
the lessee with either the same property leased by the lessee prior to
reinstatement or substitute property that is of comparable quality and
condition. If substitute property is provided, the lessor shall provide the
lessee with all of the disclosures required by section 1351.02 of the Revised
Code.
(D) A lessee who fails to make a timely lease payment shall, before such lessee
is determined to be in default, be allowed a grace period of not less than two
days if payments are made in weekly installments and not less than five days if
payments are made in monthly installments; however, no lessee shall be entitled
to more than three such monthly grace periods per year.
HISTORY: 142 v H 421. Eff 6-29-88.
§ 1351.06 Lessee's right to acquire ownership when 50%
of payments equals cash price.
Text of Statute
(A) No lessor shall offer a lease-purchase agreement in which fifty per cent of
all lease payments necessary to acquire ownership of the leased property exceed
the cash price of the leased property. When fifty per cent of all lease payments
made by a lessee equals the cash price of the property disclosed to the lessee
pursuant to division (A)(11) of section 1351.02 of the Revised Code, the lessee
shall acquire ownership of the leased property and the lease-purchase agreement
shall terminate.
(B) At any time after tendering an initial lease payment, a lessee may acquire
ownership of the property that is the subject of the lease-purchase agreement by
tendering an amount equal to the amount by which the cash price of the leased
property exceeds fifty per cent of all lease payments made by the lessee.
HISTORY: 142 v H 421. Eff 6-29-88.
§ 1351.07 Advertising; information to be stamped on or
affixed to property.
Text of Statute
(A) No advertisement for a lease-purchase agreement shall state that a lease of
any specific property is available at specific amounts or on specific terms
unless the lessor will lease the property at those amounts or on those terms.
(B) No advertisement shall state that a payment or a lease payment is due upon
origination of a lease without disclosing all of the following:
(1) The payment due upon origination of the lease;
(2) The lease payment;
(3) The total number of lease payments necessary to obtain ownership of the
property that is the subject of the lease-purchase agreement.
(C) All property displayed or offered under a lease-purchase agreement shall
have stamped upon or affixed to the property and clearly and conspicuously
indicated in arabic numerals that are readable and understandable by visual
inspection, all of the following:
(1) The cash price of the property;
(2) The amount of the lease payment;
(3) The total number of lease payments necessary to acquire ownership of the
property that is the subject of the lease-purchase agreement.
(D) With respect to matters specifically governed by the "Consumer Credit
Protection Act," 15 U.S.C. 1667, 90 Stat. 257, as amended, compliance with such
act satisfies the requirements of this section.
HISTORY: 142 v H 421. Eff 6-29-88.
§ 1351.08 Lessor's liability for noncompliance.
Text of Statute
(A) A lessor who fails to comply with the requirements of this chapter with
respect to a lease-purchase agreement is liable to the lessee in an amount equal
to the sum of the following:
(1) The costs of the action and reasonable attorney's fees as determined by the
court;
(2) The greater of the following:
(a) The actual damages sustained by the lessee as a result of the failure of the
lessor;
(b)(i) In the case of an individual action, twenty-five per cent of the total
amount necessary to acquire ownership of the property that is the subject of the
lease-purchase agreement, but not less than two hundred dollars or more than one
thousand dollars;
(ii) In the case of a class action, an amount the court determines to be
appropriate except that as to each member of the class no minimum recovery is
applicable. The total recovery under division (A)(2)(b)(ii) of this section in
any class action or series of class actions arising out of the same failure to
comply cannot be more than the lesser of five hundred thousand dollars or an
amount equal to one per cent of the net worth of the lessor.
(B) If a particular lease-purchase agreement has more than one lessee, only one
recovery of damages is allowed under division (A)(2) of this section for a
violation of this chapter. Multiple violations in connection with a single
lease-purchase agreement entitle the lessee or multiple lessees to only one
recovery under this section.
(C) No action under this section may be brought more than two years after the
occurrence of the violation that is the subject of the suit, or more than two
years after the lessee made his last lease payment, whichever is later. This
division does not bar a lessee from asserting a violation of this chapter as a
matter of defense by recoupment or set-off in an action brought by a lessor more
than two years after the date of the occurrence of the violation on an
obligation arising from the lease-purchase agreement.
(D) A lessee may not take any action to offset any amount for which a lessor is
potentially liable under division (A)(2) of this section against any amount owed
by the lessee, unless the amount of the liability of the lessor has been
determined by a judgment of a court of competent jurisdiction in an action in
which the lessor was a party. This division does not bar a lessee in default on
an obligation arising from the lease-purchase agreement from asserting a
violation of this chapter in an original action, or as a defense or counterclaim
to an action brought by the lessor to collect amounts owed by the lessee
pursuant to the lease-purchase agreement.
HISTORY: 142 v H 421. Eff 6-29-88.
§ 1351.09 Limitations on lessor's liability.
Text of Statute
(A) A lessor is not liable under section 1351.08 of the Revised Code for any
violation of the requirements of this chapter if, within sixty days after
discovering an error, and before an action for damages is filed against him
pursuant to section 1351.08 of the Revised Code or written notice of the error
is received from the lessee, the lessor notifies the lessee of the error and
makes adjustments to the account of the lessee that are necessary to assure that
the lessee is not required to pay an amount in excess of the amounts actually
disclosed. This division applies whether the error was discovered through the
lessor's own procedures or by any other means.
(B) A lessor is not liable under section 1351.08 of the Revised Code for damages
in excess of the actual damage sustained by the lessee if the lessor shows by a
preponderance of the evidence that the violation of this chapter resulted from a
bona fide error notwithstanding the maintenance by the lessor of procedures
reasonably adopted to avoid the error. As used in this division, "bona fide
error" includes, but is not limited to, clerical, calculation, computer
malfunction and programming, and printing errors.
HISTORY: 142 v H 421. Eff 6-29-88. |
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