US Laws, Codes, Statutes & Cases

From the U.S. Code Online via GPO Access
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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 15USC1667b]

 
                      TITLE 15--COMMERCE AND TRADE
 
                 CHAPTER 41--CONSUMER CREDIT PROTECTION
 
              SUBCHAPTER I--CONSUMER CREDIT COST DISCLOSURE
 
                         Part E--Consumer Leases
 
Sec. 1667b. Lessee's liability on expiration or termination of 
        lease
        

(a) Estimated residual value of property as basis; presumptions; action 
        by lessor for excess liability; mutually agreeable final 
        adjustment

    Where the lessee's liability on expiration of a consumer lease is 
based on the estimated residual value of the property such estimated 
residual value shall be a reasonable approximation of the anticipated 
actual fair market value of the property on lease expiration. There 
shall be a rebuttable presumption that the estimated residual value is 
unreasonable to the extent that the estimated residual value exceeds the 
actual residual value by more than three times the average payment 
allocable to a monthly period under the lease. In addition, where the 
lessee has such liability on expiration of a consumer lease there shall 
be a rebuttable presumption that the lessor's estimated residual value 
is not in good faith to the extent that the estimated residual value 
exceeds the actual residual value by more than three times the average 
payment allocable to a monthly period under the lease and such lessor 
shall not collect from the lessee the amount of such excess liability on 
expiration of a consumer lease unless the lessor brings a successful 
action with respect to such excess liability. In all actions, the lessor 
shall pay the lessee's reasonable attorney's fees. The presumptions 
stated in this section shall not apply to the extent the excess of 
estimated over actual residual value is due to physical damage to the 
property beyond reasonable wear and use, or to excessive use, and the 
lease may set standards for such wear and use if such standards are not 
unreasonable. Nothing in this subsection shall preclude the right of a 
willing lessee to make any mutually agreeable final adjustment with 
respect to such excess residual liability, provided such an agreement is 
reached after termination of the lease.

(b) Penalties and charges for delinquency, default, or early termination

    Penalties or other charges for delinquency, default, or early 
termination may be specified in the lease but only at an amount which is 
reasonable in the light of the anticipated or actual harm caused by the 
delinquency, default, or early termination, the difficulties of proof of 
loss, and the inconvenience or nonfeasibility of otherwise obtaining an 
adequate remedy.

(c) Independent professional appraisal of residual value of property at 
        termination of lease; finality

    If a lease has a residual value provision at the termination of the 
lease, the lessee may obtain at his expense, a professional appraisal of 
the leased property by an independent third party agreed to by both 
parties. Such appraisal shall be final and binding on the parties.

(Pub. L. 90-321, title I, Sec. 183, as added Pub. L. 94-240, Sec. 3, 
Mar. 23, 1976, 90 Stat. 259.)

                  Section Referred to in Other Sections

    This section is referred to in section 1667d of this title.