2012 New York Consolidated Laws
PEP - Personal Property
Article 9-A - (330 - 353) MOTOR VEHICLE RETAIL LEASING ACT
337 - Requirements as to retail lease agreements.

 
    §  337.  Requirements as to retail lease agreements. 1. A retail lease
  agreement shall be in a writing and, except  as  otherwise  provided  in
  subdivision  two  of  section  three hundred forty-five of this article,
  signed contemporaneously  by  the  lessor  and  the  lessee.  Except  as
  provided  in  sections  three  hundred  thirty-five  and  three  hundred
  thirty-six of this article, a retail lease agreement shall contain in  a
  single document all the agreements of the parties.
    2.  The  printed portion of the agreement shall be printed in at least
  eight-point type  in  ink  that  contrasts  with  the  paper  used.  The
  agreement shall contain the following items printed or written in a size
  equal to at least ten-point bold type:
    (a)  Both  at  the  top  of the agreement and directly above the space
  reserved for the signature of the lessee, the words  "LEASE  AGREEMENT",
  "RETAIL LEASE AGREEMENT" or "MOTOR VEHICLE LEASE AGREEMENT";
    (b)  A  specific statement that physical damage or liability insurance
  coverage for bodily injury and property damage caused to others  is  not
  included, if that is the case; and
    (c)  Directly  above the acknowledgment permitted by subdivision three
  of this section to appear above the space reserved for the signature  of
  the  lessee,  a written notice informing the lessee that: (i) the lessee
  should not sign the agreement before  he  or  she  reads  it  or  if  it
  contains  any  blank  space;  and  (ii)  the  lessee  is  entitled  to a
  completely filled in copy of the agreement when he or she  signs  it.  A
  notice  substantially  similar to the following notice complies with the
  requirements of this paragraph: "NOTICE TO THE LESSEE: 1.  Do  not  sign
  this agreement before you read it or if it contains any blank space.
    2.  You  are entitled to a completely filled in copy of this agreement
  when you sign it."
    3. The lessor shall deliver to the lessee, or mail to him  or  her  at
  his  or  her  address  shown  on  the agreement, a copy of the agreement
  signed by the lessor. Until the lessor does so, a  lessee  who  has  not
  received delivery of the motor vehicle shall have an unconditional right
  to  cancel  the  agreement  and  to  receive  an immediate refund of all
  payments made and redelivery of all goods traded-in  to  the  lessor  on
  account  of  or in contemplation of the agreement. Any acknowledgment by
  the lessee of delivery of a copy of the agreement shall  be  printed  or
  written  in  a  size  equal  to  at  least eight-point bold type and, if
  contained in the agreement,  shall  appear  directly  above  the  legend
  required  by  paragraph (a) of subdivision two of this section to appear
  directly above the space reserved for the signature of the lessee.
    4. The agreement shall contain the names of the lessor and the lessee,
  the place of business of the lessor, the residence or place of  business
  of  the lessee as specified by the lessee and a description of the motor
  vehicle including its make, year model, model and identification  number
  or marks.
    5. The agreement shall contain:
    (a) All items required to be disclosed by the act of Congress entitled
  "Consumer  Leasing  Act of 1976" and the regulations thereunder, as such
  act and regulations may from time to time be amended; provided, however,
  that the disclosures required by the  "Consumer  Leasing  Act  of  1976"
  shall  be  made  in  all  leasing  transactions  covered by this article
  regardless of the exemption in the "Consumer Leasing Act  of  1976"  for
  lease  transactions  in  which  the total contractual obligation exceeds
  twenty-five thousand dollars;
    (b) The capitalized cost, using the  term  "capitalized  cost"  and  a
  descriptive  explanation  such  as  "the sum of the adjusted capitalized
  cost and any capitalized cost reduction. The capitalized  cost  and  the
  amount of the rental payment may be negotiable";

    (c)  The  adjusted  capitalized  cost  of  the vehicle, using the term
  "adjusted capitalized cost", a  descriptive  explanation  such  as  "the
  amount  which is capitalized in connection with the lease and is used in
  determining  the  amount  of  your  periodic  payment"  and  immediately
  thereafter one of the following additional explanatory statements:
    (i)  In  the  case  of  an agreement which provides for an "additional
  early  termination  charge"  and  whose  early  termination   provisions
  expressly  refer  to  the  "adjusted capitalized cost," a statement that
  "this amount plus the additional early termination charge will  be  used
  in determining your early termination liability";
    (ii)  In  the  case  of an agreement which provides for an "additional
  early termination charge" and whose early termination provisions do  not
  expressly  refer  to  the  "adjusted capitalized cost," a statement that
  "this amount plus the additional early termination charge will  be  used
  in determining the legal limit on your early termination liability";
    (iii)  In  the  case  of  an  agreement  which does not provide for an
  "additional  early  termination  charge"  and  whose  early  termination
  provisions  expressly  refer  to  the  "adjusted  capitalized  cost,"  a
  statement that "this amount will  be  used  in  determining  your  early
  termination liability"; or
    (iv)  In  the  case  of  an  agreement  which  does not provide for an
  "additional  early  termination  charge"  and  whose  early  termination
  provisions  do not expressly refer to the "adjusted capitalized cost," a
  statement that "this amount will be used in determining the legal  limit
  on your early termination liability";
    (d)  The  amount,  if  any, included for insurance and other benefits,
  specifying and describing the coverages and the amount included for each
  type of coverage;
    (e) In close proximity to the  adjusted  capitalized  cost  disclosure
  required  by  paragraph  (c) of this subdivision and only as applicable,
  any  additional  early  termination  charge  provided  for   under   the
  agreement, using the term "additional early termination charge", and one
  of the following descriptive explanations:
    (i)  In  the  case  of an agreement whose early termination provisions
  expressly refer to the "adjusted additional early termination charge," a
  descriptive explanation such as "an additional  amount  the  unamortized
  portion  of  which  will  be  used in determining your early termination
  liability"; or
    (ii) In the case of an agreement whose  provisions  do  not  expressly
  refer  to  the  "additional  early  termination  charge,"  a descriptive
  explanation such as "an additional amount  the  unamortized  portion  of
  which  will  be  used  in  determining  the  legal  limit  on your early
  termination  liability";   and   immediately   after   the   descriptive
  explanation   additional   explanatory   statements  that  "this  amount
  represents the total costs and damages,  in  addition  to  the  adjusted
  capitalized  cost,  which  we  would  incur if this agreement were to be
  terminated before you had made any rental payments."
    (f)  In  close  proximity  to  the  "adjusted  capitalized  cost"  and
  "additional early termination charge" disclosures required by paragraphs
  (c) and (e) of this subdivision, one of the following statements:
    (i)  In  the  case  of  an agreement which provides for an "additional
  early termination charge" and whose early termination provisions do  not
  expressly  refer  to  either  the  "adjusted  capitalized  cost"  or the
  "additional early termination charge," a statement that  "although  they
  are  not  referred to in the early termination provisions of this lease,
  the 'adjusted capitalized cost' and the  'additional  early  termination
  charge'  may  be  used  to  compare  the early termination provisions of
  competing lessors";

    (ii) In the case of an agreement which  provides  for  an  "additional
  early  termination charge" and whose early termination provisions do not
  expressly  refer  to  the  "additional  early  termination  charge,"   a
  statement  that  "although  the 'additional early termination charge' is
  not  referred  to in the early termination provisions of this lease, the
  'additional early termination  charge'  and  the  'adjusted  capitalized
  cost'  may  be  used  to  compare  the  early  termination provisions of
  competing lessors";
    (iii) In the case of an agreement which provides  for  an  "additional
  early  termination charge" and whose early termination provisions do not
  expressly refer to the "adjusted capitalized  cost,"  a  statement  that
  "although  the  'adjusted  capitalized  cost'  is not referred to in the
  early termination provisions of this lease,  the  'adjusted  capitalized
  cost'  and  the  'additional  early  termination  charge' may be used to
  compare the early termination provisions of competing lessors";
    (iv) In the case of an agreement which  provides  for  an  "additional
  early   termination  charge"  and  whose  early  termination  provisions
  expressly refer  to  both  the  "adjusted  capitalized  cost,"  and  the
  "additional  early  termination charge," a statement that "the 'adjusted
  capitalized cost' and the 'additional early termination charge'  may  be
  used to compare the early termination provisions of competing lessors";
    (v)  In  the  case  of  an  agreement  which  does not provide for any
  "additional  early  termination  charge"  and  whose  early  termination
  provisions  do not expressly refer to the "adjusted capitalized cost," a
  statement that "although the 'adjusted capitalized cost' is not referred
  to in the early termination provisions  of  this  lease,  the  'adjusted
  capitalized   cost'  may  be  used  to  compare  the  early  termination
  provisions of competing lessors"; or
    (vi) In the case of an  agreement  which  does  not  provide  for  any
  "additional  early  termination  charge"  and  whose  early  termination
  provisions  expressly  refer  to  the  "adjusted  capitalized  cost,"  a
  statement  that  "the 'adjusted capitalized cost' may be used to compare
  the early termination provisions of competing lessors."
    (g) A statement in at least eight-point bold type informing the lessee
  that he or she has the right to terminate the agreement  voluntarily  at
  any  time  after  the  first fifty percent of the total number of months
  constituting the full scheduled lease term, or earlier if the  agreement
  so  provides,  if  he or she is in full compliance with the terms of the
  agreement and satisfies his or her early termination obligation;
    (h) A statement in at least eight-point bold type to the  effect  that
  "early termination may require you to pay a substantial charge";
    (i)  A  provision permitting a lessee whose default consists solely of
  the failure to make timely rental payments to cure his  or  her  default
  and  reinstate  the  agreement,  without  losing  any  rights or options
  previously acquired under the agreement, by paying all past  due  rental
  and   delinquency   charges   and,  if  the  agreement  so  provides,  a
  reinstatement  fee  not  to  exceed  ten  dollars  and  the  actual  and
  reasonable  costs of repossession, storage, pickup and redelivery within
  twenty-five days after the lessee is sent written notice of his  or  her
  reinstatement  rights.  The reinstatement right granted pursuant to this
  paragraph may be restricted to a lessee  who  has  not  previously  been
  afforded  the  opportunity  to  reinstate the agreement. For purposes of
  this paragraph, a rental charge is past due if it is  not  paid  by  its
  scheduled  due  date  or  within  any  grace  period  specified  in  the
  agreement;
    (j) The estimated residual  value  of  the  vehicle,  using  the  term
  "estimated residual value";

    (k)  In  the  case  of an agreement which does not obligate the lessee
  upon a total loss of the vehicle occasioned by  its  theft  or  physical
  damage  for  any  of  the  items  specified in paragraphs (e) and (f) of
  subdivision one of section three hundred forty-one of  this  article,  a
  conspicuous notice that the lessee has no such obligation.
    Nothing  in  this  subdivision  prevents  a  holder from attempting to
  repossess a vehicle, accepting its voluntary  surrender  or  selling  it
  during  the  reinstatement  period,  but  such a repossession, voluntary
  surrender, or sale shall not  affect  the  reinstatement  right  of  the
  lessee. Upon reinstatement, the holder shall provide the lessee with the
  same  vehicle  leased  by  the lessee prior to reinstatement or, if that
  vehicle is not available, a  substitute  vehicle  of  comparable  worth,
  quality and condition.
    6.  (a)  (i)  The  amount, if any, included for liability insurance or
  insurance on the vehicle, shall not exceed the premiums charged  by  the
  insurance  company  for  such  insurance.  The  holder,  if  the cost of
  liability insurance or insurance on the motor vehicle is included  in  a
  retail  lease  agreement and the policy or policies are delivered to the
  holder, shall within thirty days after execution  of  the  retail  lease
  agreement,  send  or cause to be sent to the lessee a copy of the policy
  or policies of insurance, issued by an insurance company  authorized  to
  do  that kind of insurance business in this state, clearly setting forth
  the amount of the premium, the kind or kinds of insurance and the  scope
  of the coverage and all the terms, exceptions, limitations, restrictions
  and conditions of the contract or contracts of insurance.
    (ii)  The  lessee  of  a  motor vehicle under a retail lease agreement
  shall have the privilege of purchasing such insurance from an  agent  or
  broker of his or her own selection and of selecting an insurance company
  acceptable  to  the lessor; provided, however, that the inclusion of the
  insurance premium in the retail lease agreement when the lessee  selects
  the  agent,  broker or company, shall be optional with the lessor and in
  such case the lessor or assignee shall have no obligation  to  send,  or
  cause to be sent, to the lessee a copy of the policy of insurance.
    (b)  If  any  such  policy  of liability insurance or insurance on the
  motor vehicle  is  cancelled,  the  unearned  insurance  premium  refund
  received  or receivable by the holder of the agreement or, if the amount
  included therefor in the agreement exceeds the cost to the holder of the
  agreement for such insurance, the unearned  portion  of  the  amount  so
  included,  shall  be  either:  (i)  refunded  to  the  lessee within ten
  business days after it is received by  the  holder;  or  (ii)  credited,
  together  with  the  unearned  portion  of  the  lease charge applicable
  thereto, to the final maturing rental payments or, at the option of  the
  holder,  to the end of term obligations under the retail lease agreement
  except to the  extent  applied  toward  payment  for  similar  insurance
  protecting  the  interests of the lessee and the holder of the agreement
  or either of them, provided that no such credit or refund need  be  made
  if the amount thereof would be less than one dollar.
    (c)  The  amount,  if  any, included for group credit insurance or for
  insurance other than gap insurance, liability insurance or insurance  on
  the motor vehicle shall not exceed the premiums charged by the insurance
  company  for  such insurance. If such group credit or other insurance is
  cancelled  the  refund  for  unearned  insurance  premiums  received  or
  receivable  by  the holder of the agreement, or the excess of the amount
  included in the agreement for group credit or other insurance  over  the
  premiums  paid  or payable by the holder of the agreement therefor shall
  be either: (i) refunded to the lessee within ten business days after  it
  is  received  by  the holder; or (ii) credited, together with, in either
  case, the unearned portion of the lease charge  applicable  thereto,  to

  the  final  maturing rental payments or, at the option of the holder, to
  the end of term obligations under the retail lease  agreement,  provided
  that  no  such credit or refund need be made if the amount thereof would
  be less than one dollar.
    (d)  The  amount  of  any separate charge included for a waiver by the
  lessor of its contractual right to hold the lessee liable  for  the  gap
  amount  shall  not  exceed the cost of lessor gap insurance covering the
  retail lease transaction.
    7. (a) If the lessee is obligated in  connection  with  the  lease  to
  maintain  liability  insurance or insurance on the motor vehicle that is
  the subject of the agreement and if subsequent to the execution  of  the
  agreement  the  lessee  fails  to  maintain  the required insurance, the
  holder may make advances to procure the equivalent limits  of  insurance
  for either the interests of the lessee and the holder or the interest of
  either of them, and any amount so advanced may be the subject of a lease
  charge as though such amount was part of the initial lease value.
    (b)  If  under subdivision two of section three hundred thirty-five of
  this article, the lessor waives its contractual right to hold the lessee
  liable for the gap amount, and lessor gap insurance coverage  which  the
  lessor   or   holder   purchased  in  connection  with  the  transaction
  subsequently is terminated prior to the filing of a  claim  due  to  the
  insolvency  of  the insurance company, notwithstanding the provisions of
  paragraph three of subsection (b) of section one  thousand  one  hundred
  one  of  the  insurance  law  the  holder may make an advance to procure
  equivalent limits of lessor gap insurance covering the  transaction  and
  any  amount  so  advanced may be the subject of a lease charge as though
  such amount was part of the capitalized cost.
    (c) Each amount so advanced shall be subject to the default provisions
  of the lease agreement if so provided in the agreement and if the holder
  notifies the lessee in writing of the advance of such amount and of  his
  or her option to repay such amount in any one of the following ways:
    (i)  Full  payment  within ten days from the date of giving or mailing
  the notice;
    (ii) Full amortization  during  the  term  of  the  insurance  or  the
  remaining term of the agreement, at the option of the holder;
    (iii) If offered by the holder, as a final balloon payment payable one
  month  after  the  last  scheduled  payment under the agreement; (iv) If
  offered  by  the  holder,  full  amortization  after  the  term  of  the
  agreement,  to  be  made  in  periodic  payments which do not exceed the
  average periodic payment under the agreement; or
    (v) If offered by the holder, any other amortization plan.
    If the lessee neither pays in full the amount so advanced nor notifies
  the holder in writing of his or her choice  regarding  the  amortization
  options  before  the  expiration  of ten days from the date of giving or
  mailing the notice by the holder, the holder shall amortize  the  amount
  so  advanced  pursuant  to  subparagraph  (ii)  of paragraph (c) of this
  subdivision.
    8. (a) The holder of a retail lease agreement may, if the agreement so
  provides, collect a delinquency and collection  charge  on  each  rental
  payment  in default for a period not less than ten days in an amount not
  in excess of the amount or  amounts  agreed  to  in  the  agreement.  In
  addition  to  a  delinquency  and  collection  charge,  the retail lease
  agreement may provide for the payment of reasonable attorneys' fees  not
  exceeding  fifteen  percent  of  the  amount  due  and payable under the
  agreement where the agreement is referred to an attorney not a  salaried
  employee  of  the holder of the agreement for collection, plus the court
  costs.

    (b) The holder may not assess or collect a delinquency and  collection
  charge  under  paragraph  (a)  of  this subdivision on a rental payment,
  which payment is otherwise a full payment for the applicable period  and
  is  paid  within ten days after its scheduled or deferred due date, when
  the  only  delinquency  is  attributable  to  delinquency and collection
  charges assessed on an earlier rental payment or payments.
    9. No retail lease agreement shall be signed by any party thereto when
  it contains blank spaces to be filled in after it has been signed except
  that, if delivery of the motor vehicle is not made at the  time  of  the
  execution  of  the  agreement,  the  identifying numbers or marks of the
  motor vehicle or similar information and  the  due  date  of  the  first
  payment  may  be  inserted  in  the  agreement  after its execution. The
  lessee's written  acknowledgment,  conforming  to  the  requirements  of
  subdivision  three  of  this  section,  of  delivery  of  a  copy of the
  agreement shall be conclusive proof of such delivery and  of  compliance
  with  this  subdivision  in  any  action  or proceeding by or against an
  assignee of the agreement without knowledge to the contrary when  he  or
  she purchases the agreement.
    10. No retail lease agreement shall contain any provision by which the
  lessee  agrees  not  to  assert  against  a holder a claim or defense or
  require or entail the execution of any note or series  of  notes  which,
  when  separately  negotiated, will cut off as to third parties any right
  of action or defense which the lessee may have against the  lessor.  The
  holder  of  a  retail lease agreement shall be subject to all claims and
  defenses of the  lessee  against  the  lessor  arising  from  the  lease
  notwithstanding   any  agreement  to  the  contrary,  but  the  holder's
  liability under this subdivision shall not exceed the  amount  owing  to
  the  holder  at  the  time  the claim or defense is asserted against the
  holder. The holder shall have recourse against the lessor to the  extent
  of  any  liability  incurred  by the holder pursuant to this subdivision
  regardless of whether the  assignment  of  the  agreement  was  with  or
  without recourse.
    11.  Notwithstanding  any contrary provision of this chapter, the lien
  law, banking law or other law: (a) a person may purchase a retail  lease
  agreement  from a lessor on such terms and conditions and for such price
  as may be mutually agreed upon; and (b) no filing of the assignment,  no
  notice  to  the  lessee  of  the assignment, and no requirement that the
  lessor be deprived of dominion over payments upon the agreement or  over
  the  vehicle  if  repossessed  by  or  returned  to the lessor, shall be
  necessary to the validity of a written  assignment  of  a  retail  lease
  agreement   as   against  creditors,  subsequent  purchasers,  pledgees,
  mortgagees or encumbrancers of the lessor.
    12. Unless the lessee has notice of actual or intended assignment of a
  retail lease agreement, payment thereunder made by  the  lessee  to  the
  last known holder of such agreement shall be binding upon all subsequent
  holders  or assignees. A notification which does not reasonably identify
  the rights assigned is ineffective. If  requested  by  the  lessee,  the
  assignee  shall  furnish  reasonable  proof that the assignment has been
  made and unless he or she does  so  the  lessee  may  pay  the  original
  lessor.
    13.  (a)  Upon written request from the lessee, the holder of a retail
  lease agreement shall give or forward to the lessee a written  statement
  of  the  dates  and  amounts  of the rental payments that have been made
  under the agreement  and  the  total  amount  of  the  remaining  rental
  payments. A lessee shall be given a written receipt for any payment when
  made in cash.
    (b)  Upon  written  request  from  a  lessee  who  is then entitled to
  terminate the agreement early, the holder of a  retail  lease  agreement

  shall  give  or  forward to the lessee a written statement of his or her
  gross early termination liability under the agreement.
    14.  No  retail lease agreement shall contain any provision applicable
  to a natural person who leases a vehicle primarily for personal,  family
  or household use by which:
    (a)   in  the  absence  of  the  lessee's  default,  the  holder  may,
  arbitrarily and without reasonable cause, accelerate the maturity of any
  part or all of the amount owing thereon;
    (b) a power of attorney is given to confess judgment, or an assignment
  of wages is given;
    (c) the lessor or holder of the agreement or other  person  acting  on
  his or her behalf is given authority to enter upon the lessee's premises
  unlawfully,  or to commit any breach of the peace in the repossession of
  the motor vehicle;
    (d) the lessee waives any right of action against the lessor or holder
  of the agreement, or other person acting on his or her behalf,  for  any
  illegal  act committed in the collection of payments under the agreement
  or in the repossession of the motor vehicle;
    (e) the lessee executes a power of attorney appointing the  lessor  or
  holder of the agreement, or other person acting on his or her behalf, as
  the  lessee's  agent in collection of payments under the agreement or in
  the repossession of the motor  vehicle;  provided,  however,  that  this
  paragraph  shall  not prohibit the inclusion in a retail lease agreement
  of a limited power of attorney or other provision authorizing the holder
  to execute in the name of the lessee any proofs of insurance  claims  or
  losses  or to endorse the name of the lessee on any insurance settlement
  draft or check;
    (f) the lessor is relieved from liability for any legal  remedy  which
  the  lessee  may have had against the lessor under the agreement, or any
  separate instrument executed in connection therewith;
    (g) the maturity of any part or all of the  amount  owing  thereon  is
  accelerated  where, following a default consisting solely of the failure
  to make timely rental payments, a lessee who has the right to  reinstate
  the agreement makes timely tender of an amount which would be sufficient
  to  reinstate  the  agreement under paragraph (i) of subdivision five of
  this section;
    (h) the lessee waives any right to a trial by jury in  any  action  or
  proceeding arising out of the agreement; or
    (i) a lessee who is not in default of his or her obligations under the
  agreement would be prohibited from terminating the agreement at any time
  after  the  expiration of the first fifty percent of the total number of
  months of the lease term. The exercise of this right to terminate  early
  voluntarily  is  contingent upon the lessee discharging fully his or her
  liability under the early termination provisions of the agreement.
    15. Any  such  prohibited  provision  shall  be  void  but  shall  not
  otherwise affect the validity of the agreement.
    16.  Where  necessary  to ensure consistency with the pronoun usage in
  the underlying agreement, any language required by this  article  to  be
  used  in  connection with a required disclosure may be modified to refer
  to the lessee in the first person and the holder in the second person.