2010 California Code
Civil Code
Chapter 2d. Vehicle Leasing Act

2985.7.  (a) "Motor vehicle" means any vehicle required to be
registered under the Vehicle Code. Motor vehicle does not include any
trailer which is sold in conjunction with a vessel.
   (b) "Lessor" includes "bailor" and is a person who is engaged in
the business of leasing, offering to lease or arranging the lease of
a motor vehicle under a lease contract.
   For the purpose of this subdivision, "person" means an individual,
partnership, corporation, limited liability company, estate, trust,
cooperative, association or any other legal entity.
   (c) "Lessee" includes "bailee" and is a natural person who leases,
offers to lease or is offered the lease of a motor vehicle under a
lease contract.
   (d) "Lease contract" means any contract for or in contemplation of
the lease or bailment for the use of a motor vehicle, and the
purchase of services incidental thereto, by a natural person for a
term exceeding four months, primarily for personal, family or
household purposes, whether or not it is agreed that the lessee bear
the risk of the motor vehicle's depreciation. Lease contract does not
include a lease for agricultural, business or commercial purposes,
or to a government or governmental agency or instrumentality.
   (e) "Regulation M" means any rule, regulation, or interpretation
promulgated by the Board of Governors of the Federal Reserve System
under the federal Consumer Leasing Act (15 U.S.C. Secs. 1667-1667e),
and any interpretation or approval issued by an official or employee
of the Federal Reserve System duly authorized by the board to issue
such interpretations or approvals.
   (f) "Constant yield method" means the following:
   (1) In the case of a periodic payment lease, the method of
determining the rent charge portion of each base payment in which the
rent charge for each computational period is earned in advance by
multiplying the constant rate implicit in the lease contract times
the balance subject to rent charge as it declines during the
scheduled lease term. At any time during the scheduled term of a
periodic payment lease, the balance subject to rent charge is the
difference between the adjusted capitalized cost and the sum of (A)
all depreciation and other amortized amounts accrued during the
preceding computational periods and (B) the first base periodic
payment.
   (2) In the case of a single payment lease, the method of
determining the periodic earning of rent charges in which the rent
charge for each computational period is earned in advance by
multiplying the constant rate implicit in the lease contract times
the balance subject to rent charge as it increases during the
scheduled lease term. At any time during the scheduled term of a
single payment lease, the balance subject to rent charge is
determined by subtracting from the residual value the total rent
charge scheduled to be earned over the term of the lease contract and
adding to the difference all rent charges accrued during the
preceding computational periods.
   (3) Periodic rent charge calculations are based on the assumption
that the lessor will receive the lease payments on their exact due
dates and that the lease does not end before its scheduled
termination date.



2985.71.  (a) Any solicitation to enter into a lease contract that
includes any of the following items shall contain the disclosures
described in subdivision (b):
   (1) The amount of any payment.
   (2) A statement of any capitalized cost reduction or other payment
required prior to or at consummation or by delivery, if delivery
occurs after consummation.
   (3) A statement that no capitalized cost reduction or other
payment is required prior to or at consummation or by delivery, if
delivery occurs after consummation.
   (b) A solicitation to enter into a lease contract that includes
any item listed in subdivision (a) shall also clearly and
conspicuously state all of the following items:
   (1) All of the disclosures prescribed by Regulation M set forth in
the manner required or permitted by Regulation M, whether or not
Regulation M applies to the transaction.
   (2) The mileage limit after which mileage charges may accrue and
the charge per mile for mileage in excess of the stated mileage
limit.
   (3) The statement "Plus tax and license" or a substantially
similar statement, if amounts due for use tax, license fees, and
registration fees are not included in the payments.
   (c) No solicitation to aid, promote, or assist directly or
indirectly any lease contract may state that a specific lease of any
motor vehicle at specific amounts or terms is available unless the
lessor usually and customarily leases or will lease that motor
vehicle at those amounts or terms.
   (d) A failure to comply with the provisions of this section shall
not affect the validity of the leasing contract. No owner or employee
of any entity, other than the lessor, that serves as a medium in
which a lease solicitation appears or through which a lease
solicitation is disseminated, shall be liable under this section.



2985.8.  (a) Every lease contract shall be in writing and the print
portion of the contract shall be printed in at least 8-point type and
shall contain in a single document all of the agreements of the
lessor and lessee with respect to the obligations of each party.
   (b) At the top of the lease contract, a title which contains the
words "LEASE CONTRACT" or "LEASE AGREEMENT" shall appear in at least
12-point boldface type.
   (c) Every lease contract shall disclose all of the following:
   (1) All of the information prescribed by Regulation M set forth in
the manner required or permitted by Regulation M, whether or not
Regulation M applies to the transaction.
   (2) A separate statement labeled "Itemization of Gross Capitalized
Cost" that shall appear immediately following or directly adjacent
to the disclosures required to be segregated by Regulation M. The
Itemization of Gross Capitalized Cost shall include all of the
following and shall be circumscribed by a line:
   (A) The agreed-upon value of the vehicle as equipped at the time
of signing the lease.
   (B) The agreed-upon value and a description of each accessory and
item of optional equipment the lessor agrees to add to the vehicle
after signing the lease.
   (C) The premium for each policy of insurance.
   (D) The amount charged for each service contract.
   (E) Any charge for an optional debt cancellation agreement.
   (F) Any outstanding prior credit or lease balance.
   (G) An itemization by type and agreed-upon value of each good or
service included in the gross capitalized cost other than those items
included in the disclosures required in subparagraphs (A) to (F),
inclusive.
   (3) The vehicle identification number of the leased vehicle.
   (4) A brief description of each vehicle or other property being
traded in and the agreed-upon value thereof if the amount due at the
time of signing the lease or upon delivery is paid in whole or in
part with a net trade-in allowance or the "Itemization of Gross
Capitalized Cost" includes any portion of the outstanding prior
credit or lease balance from the trade-in property.
   (5) The fee, if any, to be retained by the lessor for document
preparation, which fee may not exceed forty-five dollars ($45) and
may not be represented as a governmental fee.
   (6) The amount of any optional business partnership automation
program fee to register or transfer the vehicle, which shall be
labeled "Optional DMV Electronic Filing Fee."
   (d) Every lease contract shall contain, in at least 8-point
boldface type, above the space provided for the lessee's signature
and circumscribed by a line, the following notice: "(1) Do not sign
this lease before you read it or if it contains any blank spaces to
be filled in; (2) You are entitled to a completely filled in copy of
this lease; (3) Warning--Unless a charge is included in this lease
for public liability or property damage insurance, payment for that
coverage is not provided by this lease."
   (e) Every lease contract shall contain, in at least 8-point
boldface type, on the first page of the contract and circumscribed by
a line, the following notice:
                          "THERE IS NO COOLING OFF PERIOD
   California law does not provide for a "cooling off" or other
cancellation period for vehicle leases. Therefore, you cannot later
cancel this lease simply because you change your mind, decided the
vehicle costs too much, or wish you had acquired a different vehicle.
You may cancel this lease only with the agreement of the lessor or
for legal cause, such as fraud."

   (f) Every lease contract shall contain, in at least 8-point
boldface type, the following notice: "You have the right to return
the vehicle, and receive a refund of any payments made if the credit
application is not approved, unless nonapproval results from an
incomplete application or from incorrect information provided by you."

   (g) The lease contract shall be signed by the lessor and lessee,
or their authorized representatives, and an exact copy of the fully
executed lease contract shall be provided to the lessee at the time
of signing.
   (h) No motor vehicle shall be delivered under a lease contract
subject to this chapter until the lessor provides to the lessee a
fully executed copy of the lease contract.
   (i) The lessor may not obtain the signature of the lessee to a
contract when it contains blank spaces to be filled in after it has
been signed.
   (j) If the lease contract contains a provision that holds the
lessee liable for the difference between (1) the adjusted capitalized
cost disclosed in the lease contract reduced by the amounts
described in subparagraph (A) of paragraph (5) of subdivision (b) of
Section 2987 and (2) the settlement proceeds of the lessee's required
insurance and deductible in the event of theft or damage to the
vehicle that results in a total loss, the lease contract shall
contain the following notice in at least 8-point boldface type on the
first page of the contract:
                               "GAP LIABILITY NOTICE
   In the event of theft or damage to the vehicle that results in a
total loss, there may be a GAP between the amount due upon early
termination and the proceeds of your insurance settlement and
deductible. THIS LEASE PROVIDES THAT YOU ARE LIABLE FOR THE GAP
AMOUNT. Optional coverage for the GAP amount may be offered for an
additional price."



2985.9.  The following documents and agreements are not required to
be contained in a lease contract:
   (a) An "express warranty," as that term is defined in paragraph
(1) of subdivision (a) of Section 1791.2, whether it relates to the
sale or lease of a consumer good.
   (b) Titling and transfer documents utilized to register, title, or
transfer ownership of vehicles described in the lease contract with
government registration authorities.
   (c) Insurance policies, service contracts, and optional debt
cancellation agreements.
   (d) Documents that memorialize the sale or lease of goods or
services, relating to the leased vehicle, between the provider of
those goods or services and lessee that are included in the gross
capitalized cost of the lease and separately itemized in the
"Itemization of Gross Capitalized Cost."



2986.3.  No lease contract shall contain any provision by which:
   (a) A power of attorney is given to confess judgment in this
state, or an assignment of wages is given; provided that nothing
herein contained shall prohibit the giving of an assignment of wages
contained in a separate instrument pursuant to Section 300 of the
Labor Code.
   (b) The lessee waives any right of action against the lessor or
holder of the contract or other person acting on his or her behalf
for any illegal act committed in the collection of payments under the
contract or in the repossession of the motor vehicle.
   (c) The lessee relieves the lessor from liability for any legal
remedies which the lessee may have against the lessor under the
contract or any separate instruments executed in connection
therewith.
   (d) The lessor or holder of the contract is given the right to
commence action on a contract under the provisions of this chapter in
a county other than the county in which the contract was in fact
signed by the lessee, the county in which the lessee resides at the
commencement of the action, the county in which the lessee resided at
the time the contract was entered into or in the county in which the
motor vehicle leased pursuant to such contract is permanently
garaged.



2986.4.  Any acknowledgment by the lessee of delivery of a copy of a
lease contract or purchase order and any vehicle lease proposal and
any credit statement which the lessor has required or requested the
lessee to sign, and which the lessee has signed, during the contract
negotiations, shall be printed or written in size equal to at least
10-point bold type and, if contained in the contract, shall appear
directly above the space reserved for the lessee's signature. The
lessee's written acknowledgment, conforming to the requirements of
this section, of delivery of a completely filled in copy of the
contract, and a copy of such other documents shall be a rebuttable
presumption of delivery in any action or proceeding by or against a
third party without knowledge to the contrary when he or she acquired
his or her interest in the contract. If such third party furnishes
the lessee a copy of such documents, or a notice containing items set
forth in subdivision (c) of Section 2985.8, and stating that the
lessee shall notify such third party in writing within 30 days if he
or she was not furnished a copy of such documents, and no such
notification is given, it shall be conclusively presumed in favor of
such a third party that copies of the documents were furnished as
required by this chapter.



2986.5.  (a) No person shall lease a used motor vehicle for
operation on California highways if such vehicle does not meet all of
the equipment requirements of Division 12 (commencing with Section
24000) of the Vehicle Code. This subdivision does not apply to an
extension or a subsequent lease of the same motor vehicle to the same
lessee.
   (b) If a lessee of a vehicle pays to the lessor an amount for the
licensing or transfer of title of the vehicle which amount is in
excess of the actual fees due for such licensing or transfer, or
which amount is in excess of the amount which has been paid, prior to
the sale, by the lessor to the state in order to avoid penalties
that would have accrued because of late payment of such fees, the
lessor shall return such excess amount to the lessee, whether or not
such lessee requests the return of the excess amount.



2986.6.  No agreement in connection with a lease contract which
provides for the inclusion of title to or a lien upon any personal or
real property, other than the motor vehicle which is the subject
matter of the lease contract, or accessories therefor, or special and
auxiliary equipment used in connection therewith, as security for
the payment of the contract obligations, shall be enforceable. This
section does not apply to a security deposit, advance payment of rent
or other cash prepayment.



2986.10.  (a) An assignee of the lessor's rights is subject to all
equities and defenses of the lessee against the lessor,
notwithstanding an agreement to the contrary, but the assignee's
liability may not exceed the amount of the obligation owing to the
assignee at the time of the assignment.
   (b) The assignee shall have recourse against the lessor to the
extent of any liability incurred by the assignee pursuant to this
section regardless of whether the assignment was with or without
recourse.



2986.12.  It shall be unlawful for any lessor to induce or attempt
to induce any person to enter into a contract subject to this chapter
by offering a rebate, discount, commission or other consideration,
on the condition that the lessee gives information or assistance for
the purpose of enabling a lessor to either lease or sell a motor
vehicle to another.



2986.13.  (a) Any payment made by a lessee to a lessor pending the
execution of a lease contract shall be refunded to the lessee in the
event the lease contract is not executed.
   (b) In the event of breach by the lessor of a lease contract where
the lessee leaves his or her motor vehicle with the lessor as a
trade-in downpayment and the motor vehicle is not returned by the
lessor to the lessee for whatever reason, the lessee may recover from
the lessor either the fair market value of the motor vehicle left as
a downpayment or its value as stated in the lease contract,
whichever is greater. The recovery shall be tendered to the lessee
within five business days after the breach.
   (c) The remedies of the buyer provided for in subdivision (b) are
nonexclusive and cumulative and shall not preclude the lessee from
pursuing any other remedy which he or she may have under any other
provision of law.



2987.  (a) A lessee has the right to terminate a lease contract at
any time prior to the scheduled expiration date specified in the
lease contract. Except as provided in subdivision (f), all of the
following subdivisions of this section apply in the event of an early
termination.
   (b) The lessee's liability shall not exceed the sum of the
following:
   (1) All unpaid periodic lease payments that have accrued up to the
date of termination.
   (2) All other amounts due and unpaid by the lessee under the lease
contract, other than excess wear and mileage charges and unpaid
periodic lease payments.
   (3) Any charges, however denominated, that the lessor or holder of
the lease contract may assess in connection with termination not to
exceed in the aggregate the amount of a reasonable disposition fee,
if any, disclosed in the lease contract and assessed upon termination
of the lease contract.
   (4) In the event of the lessee's default, reasonable fees paid by
the lessor or holder for reconditioning of the leased vehicle and
reasonable and necessary fees paid by the lessor or holder, if any,
in connection with the repossession and storage of the leased
vehicle.
   (5) The difference, if any, between the adjusted capitalized cost
disclosed in the lease contract and the sum of (A) all depreciation
and other amortized amounts accrued through the date of early
termination, calculated in accordance with the constant yield or
other generally accepted actuarial method, and (B) the realized value
of the vehicle as provided in subdivision (c).
   (c) Subject to subdivision (d), the realized value of the vehicle
used to calculate the lessee's liability under paragraph (5) of
subdivision (b) shall be (1) if the lessee maintains insurance on the
leased vehicle as required in the lease contract and the vehicle is
a total loss as a result of theft or damage, the amount of any
applicable insurance deductible owed by the lessee and the proceeds
of the settlement of the insurance claim, unless a higher amount is
agreed to by the holder of the lease contract, (2) if the lessee
elects to have an appraisal conducted as provided in Regulation M,
the value determined on appraisal, (3) if the holder of the lease
contract or lessor elects to retain ownership of the vehicle for use
or to lease to a subsequent lessee, the wholesale value of the
vehicle as specified in the current edition of a recognized used
vehicle value guide customarily used by California motor vehicle
dealers to value vehicles in this state, including, but not limited
to, the Kelley Blue Book Auto Market Report and the N.A.D.A. Official
Used Car Guide, or (4) under all other circumstances, the higher of
(A) the price paid for the vehicle upon disposition, or (B) any other
amount established by the lessor or the lease contract.
   (d) (1) The lessor or holder of the lease contract shall act in
good faith and in a commercially reasonable manner in connection with
the disposition of the vehicle.
   (2) In addition to the requirements of paragraph (1), any
disposition of the vehicle shall be preceded by a notice complying
with both of the following:
   (A) The notice shall be in writing and given by the holder of the
contract to each lessee and guarantor at least 10 days in advance of
any disposition or the date by which the value of the vehicle will be
determined pursuant to paragraph (3) of subdivision (c). The notice
shall be personally served or shall be sent by certified mail, return
receipt requested, or first-class mail, postage prepaid, directed to
the last known address of each lessee and guarantor. One notice is
sufficient if those persons are married to each other and the most
recent records of the holder of the lease contract indicate that they
reside at the same address. The last known address of each lessee
and guarantor shall be presumed to be the address stated in the lease
contract or guaranty for each lessee and guarantor unless the lessee
or guarantor notifies the holder of the lease contract of a change
of address.
   (B) The notice shall set forth (i) the time and place of any
public sale, the time on or after which a private sale or other
intended disposition is to be made, or the date by which the value of
the vehicle will be determined pursuant to paragraph (3) of
subdivision (c), (ii) an itemization of all amounts claimed under
paragraphs (1) to (4), inclusive, of subdivision (b), (iii) the
amount of the difference between the adjusted capitalized cost and
the sum of all depreciation and other amortized amounts paid through
the date of early termination as provided in paragraph (5) of
subdivision (b), (iv) the total of these amounts identified as the
"Gross Early Termination Amount," and (v) one of the following
statements, whichever is applicable:
   ÝTo be inserted when the realized value will be determined
pursuant to paragraph (3) of subdivision (c)]
   "The amount you owe for early termination will be no more than the
difference between the Gross Early Termination Amount stated above
and (1) the appraised value of the vehicle or (2) if there is no
appraisal, the wholesale value specified in a recognized used vehicle
value guide.
   You have the right to get a professional appraisal to establish
the value of the vehicle for the purpose of figuring how much you owe
on the lease. If you want an appraisal, you will have to arrange for
it to be completed at least three days before the scheduled
valuation date. The appraiser has to be an independent person
acceptable to the holder of the lease. You will have to pay for the
appraiser. The appraised value will be considered final and binding
on you and the holder of the lease."
   ÝTo be inserted in all other circumstances]
   "The amount you owe for early termination will be no more than the
difference between the Gross Early Termination Amount stated above
and (1) the appraised value of the vehicle or (2) if there is no
appraisal, either the price received for the vehicle upon disposition
or a greater amount established by the lessor or the lease contract.
   You have the right to get a professional appraisal to establish
the value of the vehicle for the purpose of figuring how much you owe
on the lease. If you want an appraisal, you will have to arrange for
it to be completed at least three days before the scheduled sale
date of the vehicle. The appraiser has to be an independent person
acceptable to the holder of the lease. You will have to pay for the
appraiser. The appraised value will be considered final and binding
on you and the holder of the lease."
   (3) The lessee shall have no liability under subdivision (b) if
the lessor or holder of the lease contract does not comply with this
subdivision. This paragraph does not apply under all the following
conditions:
   (A) Noncompliance was the result of a bona fide error in stating
an amount required to be disclosed pursuant to clause (ii), (iii), or
(iv) of subparagraph (B) of paragraph (2).
   (B) The holder of the lease gives the lessee written notice of the
error within 30 days after discovering the error and before (i) an
action is filed to recover the amount claimed to be owed or (ii)
written notice of the error is received by the holder of the lease
from the lessee.
   (C) The lessee is liable for the lesser of the originally claimed
amount or the correct amount.
   (D) The holder of the lease refunds any amount collected in excess
of the amount described in subparagraph (C) within 10 days after
notice of the error is given. "Bona fide error," as used in this
paragraph, means an error that was not intentional and occurred
notwithstanding the maintenance of procedures reasonably adapted to
avoid that error. Examples of a bona fide error include clerical
errors, calculation errors, errors due to unintentionally improper
computer programming or data entry, and printing errors, but does not
include an error of legal judgment with respect to a lessor's or
lease contractholder's obligations under this section.
   (4) This subdivision does not apply when the lessee maintains
insurance on the leased vehicle as required in the lease contract and
the vehicle is declared a total loss by the insurer as a result of
theft or damage.
   (e) The lessor or holder of the lease contract shall credit any
security deposit or advance rental payment held by the lessor or
holder of the lease contract against the lessee's liability under the
lease contract as limited by this section. The portion of a security
deposit or advance rental payment, if any, remaining after the
lessee's liability under the lease contract as limited by this
section has been satisfied shall be returned to the lessee within 30
days of the satisfaction of the obligation.
   (f) Subdivisions (b) to (d), inclusive, do not apply if, prior to
the scheduled expiration date specified in the lease contract, the
lessee terminates the lease and purchases the vehicle or trades in
the vehicle in connection with the purchase or lease of another
vehicle. In such an event, the selling price of the leased vehicle,
exclusive of taxes and other charges incidental to the sale, shall
not exceed the sum of the following and shall relieve the lessee of
any further liability under the lease contract:
   (1) All unpaid periodic lease payments that have accrued up to the
date of termination.
   (2) All other amounts due and unpaid by the lessee under the lease
contract, other than excess wear and mileage charges and unpaid
periodic lease payments.
   (3) Any charges, however denominated, that the lessor or holder of
the lease contract may assess in connection with termination of the
lease contract and the acquisition of the vehicle, not to exceed in
the aggregate the amount of a reasonable purchase option fee, if any,
disclosed in the lease contract and assessed upon the scheduled
termination of the lease contract.
   (4) The adjusted capitalized cost disclosed in the lease contract
less all depreciation and other amortized amounts accrued through the
date of early termination, calculated in accordance with the
constant yield or other generally accepted actuarial method.
   (g) If the lessee terminates a lease contract, voluntarily returns
possession of the vehicle to the lessor, and timely pays all sums
required under the lease contract as limited by this section, the
lessor or holder shall not provide any adverse information concerning
the early termination to any consumer credit reporting agency.
   (h) The Rule of 78 shall not be used to calculate accrued rent
charges.
   (i) This section shall only apply to lease contracts entered into
on and after January 1, 1998.



2988.  (a) The Legislature finds that it is necessary to provide
some protection for consumers who enter into lease contracts in which
the lessee will bear the risk of the motor vehicle's depreciation.
This section is intended to provide relief to the consumer when an
ostensibly inexpensive lease contract establishes an excessively low
level of periodic payment which results, conversely, in an
excessively high liability being imposed on the lessee at the
expiration of the lease term because the lessor has failed to act in
good faith in either estimating a residual value of the motor vehicle
or establishing a level of periodic payment which bears no
reasonable relation to the motor vehicle's reasonably expected
depreciation during the lease term. Therefore, the lessor will have
the obligation to act in good faith and to come forward with
competent evidence showing that the estimated residual value was so
determined given the circumstances existing at the inception of the
lease contract.
   (b) Where the lessee is to bear the risk of the motor vehicle's
depreciation and the lessee's liability on expiration of a consumer
lease is based on the estimated residual value of the motor vehicle
such estimated residual value shall be a reasonable approximation of
the anticipated actual fair market value of the motor vehicle on
lease expiration. There shall be a rebuttable presumption that the
estimted 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. The presumption stated in the preceding sentence
shall not apply to the extent the excess of estimated over actual
residual value is due to physical damage to the motor vehicle 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.
   (c) For the purposes of this chapter, "fair market value" means
the value the motor vehicle would have when sold in a commercially
reasonable manner in the customary market for such motor vehicle.



2988.5.  (a) Except as otherwise provided by this section, any
lessor who fails to comply with any requirement imposed under Section
2985.8 or 2988 for which no specific relief is provided with respect
to any person shall be liable to such person in an amount equal to
the sum of:
   (1) Any actual damages sustained by such person as a result of the
failure.
   (2) In the case of an individual action, 25 percent of the total
amount of monthly payments under the lease except that liability
under this subparagraph shall not be less than one hundred dollars
($100) nor greater than one thousand dollars ($1,000); or in the case
of a class action, such amount as the court may allow, except that
as to each member of the class no minimum recovery shall be
applicable, and the total recovery in such action shall not be more
than the lesser of five hundred thousand dollars ($500,000) or 1
percent of the net worth of the lessor.
   (3) The costs of the action, together with a reasonable attorney's
fee as determined by the court.
   (b) In determining the amount of award in any class action, the
court shall consider, among other relevant factors, the amount of any
actual damages sustained, the frequency and persistence of failure
of compliance by the lessor, the resources of the lessor, the number
of persons adversely affected, and the extent to which the lessor's
failure of compliance was intentional.
   (c) A lessor shall not be liable under this section if within 15
days after discovery of an error, and prior to the institution of an
action under this section or the receipt of written notice of the
error, the lessor notifies the person concerned of the error and
makes whatever adjustments in the appropriate account are necessary
to insure that the person will not be required to pay any amount in
excess of the amount that should correctly have been disclosed.
   (d) A lessor may not be held liable in any action brought under
this section for a violation of this chapter if the lessor shows by a
preponderance of evidence that the violation was not intentional and
resulted from a bona fide error notwithstanding the maintenance of
procedures reasonably adopted to avoid any such error.
   (e) Except as otherwise specifically provided in this chapter, any
civil action for a violation of this chapter which may be brought
against the original lessor in any lease transaction may be
maintained against any subsequent assignee of the original lessor
where the violation from which the alleged liability arose is
apparent on the face of the instrument assigned unless the assignment
is involuntary.
   (f) A person may not take any action to offset any amount for
which a lessor is potentially liable to such person under paragraph
(2) of subdivision (a) against any amount owing to such lessor by
such person, unless the amount of the lessor's liability to such
person has been determined by judgment of a court of competent
jurisdiction in an action to which such person was a party.
   (g) No provision of this section imposing any liability shall
apply to any act done or omitted in good faith conformity with any
rule, regulation or interpretation of federal law, notwithstanding
that after such act or omission has occurred, such rule, regulation
or interpretation is amended, rescinded or determined by judicial or
other authority to be invalid for any reason.
   (h) The multiple failure to disclose any information required
under this chapter to be disclosed in connection with a single lease
transaction shall entitle the person to a single recovery under this
section, but continued failure to disclose after a recovery has been
granted shall give rise to rights to additional recoveries.
   (i) Actions alleging a failure to disclose or otherwise comply
with the requirements of this chapter shall be brought within one
year of the termination of the lease contract.



2988.7.  If the lessor fails to comply with Section 2985.8, as an
alternative to an action under Section 2988.5, the lessee may rescind
the contract if the failure to comply was willful, or if correction
will increase the amount of the contract balance, unless the lessor
waives the collection of the increased amount.


2988.9.  Reasonable attorney's fees and costs shall be awarded to
the prevailing party in any action on a lease contract subject to the
provisions of this chapter regardless of whether the action is
instituted by the lessor, assignee, or lessee. Where the defendant
alleges in his or her answer that he or she tendered to the plaintiff
the full amount to which he or she was entitled, and thereupon
deposits in court, for the plaintiff, the amount so tendered, and the
allegation is found to be true, then the defendant is deemed to be
the prevailing party within the meaning of this section.



2989.  No civil action shall be filed against a lessor under the
authority of this chapter if a federal civil action has previously
been filed based on facts that give rise to a similar cause of action
under this chapter.


2989.2.  Where the lessee is to bear the risk of the motor vehicle's
depreciation upon the scheduled expiration of the lease contract,
the following applies:
   (a) When disposing of a vehicle or obtaining cash bids for the
purpose of setting the fair market value of a vehicle, the lessor
shall act in a commercially reasonable manner in the customary market
for such vehicle.
   (b) Any provision in a lease contract to the contrary
notwithstanding, at least 10 days written notice of intent to sell
such motor vehicle shall be given by the holder of the contract to
each lessee and guarantor, unless the lessor and lessee have agreed
in writing to the amount of the lessee's liability under the lease
contract after the lessee returns the motor vehicle to the lessor, or
the lessee has satisfied the lease contract obligations by payment
to the lessor. The notice shall be personally served or shall be sent
by certified mail, return receipt requested, directed to the address
of the lessee shown on the contract, unless the lessee has notified
the holder in writing of a different address. The notice shall set
forth separately any charges or sums due and state that the lessee
will be liable for the difference between the amount of liability
imposed on the lessee at the expiration of the lease term and the
actual cash value of the motor vehicle when it is sold. The notice
shall also state that the lessee has the right to submit a cash bid
for the purchase of the vehicle.



2989.4.  (a) A lessor shall not:
   (1) Fail to register the leased vehicle pursuant to the lease
contract.
   (2) Advertise any specific vehicle in the inventory of the lessor
for lease without identifying such vehicle by either its vehicle
identification number or license number.
   (3) Refuse to lease a vehicle to any creditworthy person at the
advertised total price, exclusive of sales tax, vehicle registration
fees and finance charges.
   (b) Notwithstanding Section 2988.5, a lessor shall not suffer
civil liability for a violation of this section.



2989.5.  (a) Except as provided in subdivision (c), a lessor shall
make available to investigators of the Department of Motor Vehicles,
upon presentation of an affidavit that the department has a consumer
complaint within its jurisdiction, the records relevant to the
transaction complained of. If the affidavit states that the
department has reasonable cause to believe there is a pattern of
conduct or common scheme in similar transactions, the records
relevant to all such similar transactions shall be made available.
   (b) Except as provided in subdivision (c), on petition of the
department alleging the receipt of a consumer complaint within its
jurisdiction and alleging that the lessor refuses to make available
his records as required, the court shall order the lessor to make
available such records or show cause why such records should not be
produced. The department shall be awarded reasonable attorney's fees
and costs if it prevails in such action.
   (c) (1) In the case of a financial institution, or a subsidiary or
affiliated corporation of such institution, the Director of Motor
Vehicles shall report in writing an apparent violation, or failure to
comply with this chapter, evidenced by a consumer complaint, to the
agency or department of the state or federal government responsible
for supervising the leasing activities of such institution.
   (2) Within 20 days, such agency or department shall advise the
director of the action taken with respect to such report.
   (3) If such agency or department fails to so advise the director,
the director may commence an action to compel the agency or
department to cause the production of the records relevant to the
consumer complaint.



2989.6.  The Director of Motor Vehicles may adopt and enforce rules
and regulations as may be necessary to carry out or implement the
provisions of this chapter.
   Rules and regulations shall be adopted, amended or repealed in
accordance with Chapter 4.5 (commencing with Section 11370) of Part 1
of Division 3 of Title 2 of the Government Code.



2989.8.  Any person who shall knowingly and willfully violate any
provision of this chapter shall be guilty of a misdemeanor.



2990.  This chapter shall not apply to any transaction which is
regulated by Chapter 2b (commencing with Section 2981) of this title.



2991.  Any prospective assignee that provides a lessor under a lease
contract with any preprinted form for use as a lease contract shall,
upon the request of a lessor, provide the lessor with a Spanish
language translation of the preprinted form.



2992.  A prospective assignee that provides a lessor under a lease
contract with a preprinted form for use as a lease contract shall
design the form in such a manner so as to provide on its face
sufficient space for the lessor to include all disclosures and
itemizations required pursuant to Section 2985.8 and shall also
contain on its face a separate blank space no smaller than seven and
one-half square inches for the lessor and lessee to memorialize
trade-in, turn-in, and other individualized agreements.



2993.  A holder of a lease contract, or the agent of a holder, who
has received a notice pursuant to Section 7507.6 of the Business and
Professions Code, shall not make a subsequent assignment to skip
trace, locate, or repossess the vehicle without simultaneously, and
in the same manner by which the assignment is given, advising the
assignee of the assignment of the information contained in the
notice. As used in this section, "assignment" has the same meaning
set forth in Section 7500.1 of the Business and Professions Code.