N.Y. PEP Law § 337 — New York Code / Act PEP / Article 9-A / Section 337
Requirements as to retail lease agreements
Status: in_force

§ 337. Requirements as to retail lease agreements. 1. A retail lease\nagreement shall be in a writing and, except as otherwise provided in\nsubdivision two of section three hundred forty-five of this article,\nsigned contemporaneously by the lessor and the lessee. Except as\nprovided in sections three hundred thirty-five and three hundred\nthirty-six of this article, a retail lease agreement shall contain in a\nsingle document all the agreements of the parties.\n  2. The printed portion of the agreement shall be printed in at least\neight-point type in ink that contrasts with the paper used. The\nagreement shall contain the following items printed or written in a size\nequal to at least ten-point bold type:\n  (a) Both at the top of the agreement and directly above the space\nreserved for the signature of the lessee, the words "LEASE AGREEMENT",\n"RETAIL LEASE AGREEMENT" or "MOTOR VEHICLE LEASE AGREEMENT";\n  (b) A specific statement that physical damage or liability insurance\ncoverage for bodily injury and property damage caused to others is not\nincluded, if that is the case; and\n  (c) Directly above the acknowledgment permitted by subdivision three\nof this section to appear above the space reserved for the signature of\nthe lessee, a written notice informing the lessee that: (i) the lessee\nshould not sign the agreement before he or she reads it or if it\ncontains any blank space; and (ii) the lessee is entitled to a\ncompletely filled in copy of the agreement when he or she signs it. A\nnotice substantially similar to the following notice complies with the\nrequirements of this paragraph: "NOTICE TO THE LESSEE: 1. Do not sign\nthis agreement before you read it or if it contains any blank space.  2.\nYou are entitled to a completely filled in copy of this agreement when\nyou sign it."\n  3. The lessor shall deliver to the lessee, or mail to him or her at\nhis or her address shown on the agreement, a copy of the agreement\nsigned by the lessor. Until the lessor does so, a lessee who has not\nreceived delivery of the motor vehicle shall have an unconditional right\nto cancel the agreement and to receive an immediate refund of all\npayments made and redelivery of all goods traded-in to the lessor on\naccount of or in contemplation of the agreement. Any acknowledgment by\nthe lessee of delivery of a copy of the agreement shall be printed or\nwritten in a size equal to at least eight-point bold type and, if\ncontained in the agreement, shall appear directly above the legend\nrequired by paragraph (a) of subdivision two of this section to appear\ndirectly above the space reserved for the signature of the lessee.\n  4. The agreement shall contain the names of the lessor and the lessee,\nthe place of business of the lessor, the residence or place of business\nof the lessee as specified by the lessee and a description of the motor\nvehicle including its make, year model, model and identification number\nor marks.\n  5. The agreement shall contain:\n  (a) All items required to be disclosed by the act of Congress entitled\n"Consumer Leasing Act of 1976" and the regulations thereunder, as such\nact and regulations may from time to time be amended; provided, however,\nthat the disclosures required by the "Consumer Leasing Act of 1976"\nshall be made in all leasing transactions covered by this article\nregardless of the exemption in the "Consumer Leasing Act of 1976" for\nlease transactions in which the total contractual obligation exceeds\ntwenty-five thousand dollars;\n  (b) The capitalized cost, using the term "capitalized cost" and a\ndescriptive explanation such as "the sum of the adjusted capitalized\ncost and any capitalized cost reduction. The capitalized cost and the\namount of the rental payment may be negotiable";\n  (c) The adjusted capitalized cost of the vehicle, using the term\n"adjusted capitalized cost", a descriptive explanation such as "the\namount which is capitalized in connection with the lease and is used in\ndetermining the amount of your periodic payment" and immediately\nthereafter one of the following additional explanatory statements:\n  (i) In the case of an agreement which provides for an "additional\nearly termination charge" and whose early termination provisions\nexpressly refer to the "adjusted capitalized cost," a statement that\n"this amount plus the additional early termination charge will be used\nin determining your early termination liability";\n  (ii) In the case of an agreement which provides for an "additional\nearly termination charge" and whose early termination provisions do not\nexpressly refer to the "adjusted capitalized cost," a statement that\n"this amount plus the additional early termination charge will be used\nin determining the legal limit on your early termination liability";\n  (iii) In the case of an agreement which does not provide for an\n"additional early termination charge" and whose early termination\nprovisions expressly refer to the "adjusted capitalized cost," a\nstatement that "this amount will be used in determining your early\ntermination liability"; or\n  (iv) In the case of an agreement which does not provide for an\n"additional early termination charge" and whose early termination\nprovisions do not expressly refer to the "adjusted capitalized cost," a\nstatement that "this amount will be used in determining the legal limit\non your early termination liability";\n  (d) The amount, if any, included for insurance and other benefits,\nspecifying and describing the coverages and the amount included for each\ntype of coverage;\n  (e) In close proximity to the adjusted capitalized cost disclosure\nrequired by paragraph (c) of this subdivision and only as applicable,\nany additional early termination charge provided for under the\nagreement, using the term "additional early termination charge", and one\nof the following descriptive explanations:\n  (i) In the case of an agreement whose early termination provisions\nexpressly refer to the "adjusted additional early termination charge," a\ndescriptive explanation such as "an additional amount the unamortized\nportion of which will be used in determining your early termination\nliability"; or\n  (ii) In the case of an agreement whose provisions do not expressly\nrefer to the "additional early termination charge," a descriptive\nexplanation such as "an additional amount the unamortized portion of\nwhich will be used in determining the legal limit on your early\ntermination liability"; and immediately after the descriptive\nexplanation additional explanatory statements that "this amount\nrepresents the total costs and damages, in addition to the adjusted\ncapitalized cost, which we would incur if this agreement were to be\nterminated before you had made any rental payments."\n  (f) In close proximity to the "adjusted capitalized cost" and\n"additional early termination charge" disclosures required by paragraphs\n(c) and (e) of this subdivision, one of the following statements:\n  (i) In the case of an agreement which provides for an "additional\nearly termination charge" and whose early termination provisions do not\nexpressly refer to either the "adjusted capitalized cost" or the\n"additional early termination charge," a statement that "although they\nare not referred to in the early termination provisions of this lease,\nthe 'adjusted capitalized cost' and the 'additional early termination\ncharge' may be used to compare the early termination provisions of\ncompeting lessors";\n  (ii) In the case of an agreement which provides for an "additional\nearly termination charge" and whose early termination provisions do not\nexpressly refer to the "additional early termination charge," a\nstatement that "although the 'additional early termination charge' is\nnot referred to in the early termination provisions of this lease, the\n'additional early termination charge' and the 'adjusted capitalized\ncost' may be used to compare the early termination provisions of\ncompeting lessors";\n  (iii) In the case of an agreement which provides for an "additional\nearly termination charge" and whose early termination provisions do not\nexpressly refer to the "adjusted capitalized cost," a statement that\n"although the 'adjusted capitalized cost' is not referred to in the\nearly termination provisions of this lease, the 'adjusted capitalized\ncost' and the 'additional early termination charge' may be used to\ncompare the early termination provisions of competing lessors";\n  (iv) In the case of an agreement which provides for an "additional\nearly termination charge" and whose early termination provisions\nexpressly refer to both the "adjusted capitalized cost," and the\n"additional early termination charge," a statement that "the 'adjusted\ncapitalized cost' and the 'additional early termination charge' may be\nused to compare the early termination provisions of competing lessors";\n  (v) In the case of an agreement which does not provide for any\n"additional early termination charge" and whose early termination\nprovisions do not expressly refer to the "adjusted capitalized cost," a\nstatement that "although the 'adjusted capitalized cost' is not referred\nto in the early termination provisions of this lease, the 'adjusted\ncapitalized cost' may be used to compare the early termination\nprovisions of competing lessors"; or\n  (vi) In the case of an agreement which does not provide for any\n"additional early termination charge" and whose early termination\nprovisions expressly refer to the "adjusted capitalized cost," a\nstatement that "the 'adjusted capitalized cost' may be used to compare\nthe early termination provisions of competing lessors."\n  (g) A statement in at least eight-point bold type informing the lessee\nthat he or she has the right to terminate the agreement voluntarily at\nany time after the first fifty percent of the total number of months\nconstituting the full scheduled lease term, or earlier if the agreement\nso provides, if he or she is in full compliance with the terms of the\nagreement and satisfies his or her early termination obligation;\n  (h) A statement in at least eight-point bold type to the effect that\n"early termination may require you to pay a substantial charge";\n  (i) A statement in at least eight-point bold type stating that the\nlessee shall not be liable for an early termination fee if he or she has\ndeceased before the end of the lease;\n  (j) A provision permitting a lessee whose default consists solely of\nthe failure to make timely rental payments to cure his or her default\nand reinstate the agreement, without losing any rights or options\npreviously acquired under the agreement, by paying all past due rental\nand delinquency charges and, if the agreement so provides, a\nreinstatement fee not to exceed ten dollars and the actual and\nreasonable costs of repossession, storage, pickup and redelivery within\ntwenty-five days after the lessee is sent written notice of his or her\nreinstatement rights. The reinstatement right granted pursuant to this\nparagraph may be restricted to a lessee who has not previously been\nafforded the opportunity to reinstate the agreement. For purposes of\nthis paragraph, a rental charge is past due if it is not paid by its\nscheduled due date or within any grace period specified in the\nagreement;\n  (k) The estimated residual value of the vehicle, using the term\n"estimated residual value";\n  * (l) In the case of an agreement which does not obligate the lessee\nupon a total loss of the vehicle occasioned by its theft or physical\ndamage for any of the items specified in paragraphs (e) and (f) of\nsubdivision one of section three hundred forty-one of this article, a\nconspicuous notice that the lessee has no such obligation.\n  * NB There are 2 par (l)'s\n  * (l) The liability of the lessee in the case of a total loss of the\nvehicle or the vehicle is rendered inoperable. Disclosure of liability\npursuant to this paragraph shall include the financial liability of the\nlessee and the lessor's rules, policies and procedures in the event the\ncar is declared a total loss or rendered inoperable during the term of\nthe lease.\n  * NB There are 2 par (l)'s\n  Nothing in this subdivision prevents a holder from attempting to\nrepossess a vehicle, accepting its voluntary surrender or selling it\nduring the reinstatement period, but such a repossession, voluntary\nsurrender, or sale shall not affect the reinstatement right of the\nlessee. Upon reinstatement, the holder shall provide the lessee with the\nsame vehicle leased by the lessee prior to reinstatement or, if that\nvehicle is not available, a substitute vehicle of comparable worth,\nquality and condition.\n  6. (a) (i) The amount, if any, included for liability insurance or\ninsurance on the vehicle, shall not exceed the premiums charged by the\ninsurance company for such insurance. The holder, if the cost of\nliability insurance or insurance on the motor vehicle is included in a\nretail lease agreement and the policy or policies are delivered to the\nholder, shall within thirty days after execution of the retail lease\nagreement, send or cause to be sent to the lessee a copy of the policy\nor policies of insurance, issued by an insurance company authorized to\ndo that kind of insurance business in this state, clearly setting forth\nthe amount of the premium, the kind or kinds of insurance and the scope\nof the coverage and all the terms, exceptions, limitations, restrictions\nand conditions of the contract or contracts of insurance.\n  (ii) The lessee of a motor vehicle under a retail lease agreement\nshall have the privilege of purchasing such insurance from an agent or\nbroker of his or her own selection and of selecting an insurance company\nacceptable to the lessor; provided, however, that the inclusion of the\ninsurance premium in the retail lease agreement when the lessee selects\nthe agent, broker or company, shall be optional with the lessor and in\nsuch case the lessor or assignee shall have no obligation to send, or\ncause to be sent, to the lessee a copy of the policy of insurance.\n  (b) If any such policy of liability insurance or insurance on the\nmotor vehicle is cancelled, the unearned insurance premium refund\nreceived or receivable by the holder of the agreement or, if the amount\nincluded therefor in the agreement exceeds the cost to the holder of the\nagreement for such insurance, the unearned portion of the amount so\nincluded, shall be either: (i) refunded to the lessee within ten\nbusiness days after it is received by the holder; or (ii) credited,\ntogether with the unearned portion of the lease charge applicable\nthereto, to the final maturing rental payments or, at the option of the\nholder, to the end of term obligations under the retail lease agreement\nexcept to the extent applied toward payment for similar insurance\nprotecting the interests of the lessee and the holder of the agreement\nor either of them, provided that no such credit or refund need be made\nif the amount thereof would be less than one dollar.\n  (c) The amount, if any, included for group credit insurance or for\ninsurance other than gap insurance, liability insurance or insurance on\nthe motor vehicle shall not exceed the premiums charged by the insurance\ncompany for such insurance. If such group credit or other insurance is\ncancelled the refund for unearned insurance premiums received or\nreceivable by the holder of the agreement, or the excess of the amount\nincluded in the agreement for group credit or other insurance over the\npremiums paid or payable by the holder of the agreement therefor shall\nbe either: (i) refunded to the lessee within ten business days after it\nis received by the holder; or (ii) credited, together with, in either\ncase, the unearned portion of the lease charge applicable thereto, to\nthe final maturing rental payments or, at the option of the holder, to\nthe end of term obligations under the retail lease agreement, provided\nthat no such credit or refund need be made if the amount thereof would\nbe less than one dollar.\n  (d) The amount of any separate charge included for a waiver by the\nlessor of its contractual right to hold the lessee liable for the gap\namount shall not exceed the cost of lessor gap insurance covering the\nretail lease transaction.\n  7. (a) If the lessee is obligated in connection with the lease to\nmaintain liability insurance or insurance on the motor vehicle that is\nthe subject of the agreement and if subsequent to the execution of the\nagreement the lessee fails to maintain the required insurance, the\nholder may make advances to procure the equivalent limits of insurance\nfor either the interests of the lessee and the holder or the interest of\neither of them, and any amount so advanced may be the subject of a lease\ncharge as though such amount was part of the initial lease value.\n  (b) If under subdivision two of section three hundred thirty-five of\nthis article, the lessor waives its contractual right to hold the lessee\nliable for the gap amount, and lessor gap insurance coverage which the\nlessor or holder purchased in connection with the transaction\nsubsequently is terminated prior to the filing of a claim due to the\ninsolvency of the insurance company, notwithstanding the provisions of\nparagraph three of subsection (b) of section one thousand one hundred\none of the insurance law the holder may make an advance to procure\nequivalent limits of lessor gap insurance covering the transaction and\nany amount so advanced may be the subject of a lease charge as though\nsuch amount was part of the capitalized cost.\n  (c) Each amount so advanced shall be subject to the default provisions\nof the lease agreement if so provided in the agreement and if the holder\nnotifies the lessee in writing of the advance of such amount and of his\nor her option to repay such amount in any one of the following ways:\n  (i) Full payment within ten days from the date of giving or mailing\nthe notice;\n  (ii) Full amortization during the term of the insurance or the\nremaining term of the agreement, at the option of the holder;\n  (iii) If offered by the holder, as a final balloon payment payable one\nmonth after the last scheduled payment under the agreement;\n  (iv) If offered by the holder, full amortization after the term of the\nagreement, to be made in periodic payments which do not exceed the\naverage periodic payment under the agreement; or\n  (v) If offered by the holder, any other amortization plan.\n  If the lessee neither pays in full the amount so advanced nor notifies\nthe holder in writing of his or her choice regarding the amortization\noptions before the expiration of ten days from the date of giving or\nmailing the notice by the holder, the holder shall amortize the amount\nso advanced pursuant to subparagraph (ii) of paragraph (c) of this\nsubdivision.\n  8. (a) The holder of a retail lease agreement may, if the agreement so\nprovides, collect a delinquency and collection charge on each rental\npayment in default for a period not less than ten days in an amount not\nin excess of the amount or amounts agreed to in the agreement. In\naddition to a delinquency and collection charge, the retail lease\nagreement may provide for the payment of reasonable attorneys' fees not\nexceeding fifteen percent of the amount due and payable under the\nagreement where the agreement is referred to an attorney not a salaried\nemployee of the holder of the agreement for collection, plus the court\ncosts.\n  (b) The holder may not assess or collect a delinquency and collection\ncharge under paragraph (a) of this subdivision on a rental payment,\nwhich payment is otherwise a full payment for the applicable period and\nis paid within ten days after its scheduled or deferred due date, when\nthe only delinquency is attributable to delinquency and collection\ncharges assessed on an earlier rental payment or payments.\n  9. No retail lease agreement shall be signed by any party thereto when\nit contains blank spaces to be filled in after it has been signed except\nthat, if delivery of the motor vehicle is not made at the time of the\nexecution of the agreement, the identifying numbers or marks of the\nmotor vehicle or similar information and the due date of the first\npayment may be inserted in the agreement after its execution. The\nlessee's written acknowledgment, conforming to the requirements of\nsubdivision three of this section, of delivery of a copy of the\nagreement shall be conclusive proof of such delivery and of compliance\nwith this subdivision in any action or proceeding by or against an\nassignee of the agreement without knowledge to the contrary when he or\nshe purchases the agreement.\n  10. No retail lease agreement shall contain any provision by which the\nlessee agrees not to assert against a holder a claim or defense or\nrequire or entail the execution of any note or series of notes which,\nwhen separately negotiated, will cut off as to third parties any right\nof action or defense which the lessee may have against the lessor. The\nholder of a retail lease agreement shall be subject to all claims and\ndefenses of the lessee against the lessor arising from the lease\nnotwithstanding any agreement to the contrary, but the holder's\nliability under this subdivision shall not exceed the amount owing to\nthe holder at the time the claim or defense is asserted against the\nholder. The holder shall have recourse against the lessor to the extent\nof any liability incurred by the holder pursuant to this subdivision\nregardless of whether the assignment of the agreement was with or\nwithout recourse.\n  11. Notwithstanding any contrary provision of this chapter, the lien\nlaw, banking law or other law: (a) a person may purchase a retail lease\nagreement from a lessor on such terms and conditions and for such price\nas may be mutually agreed upon; and (b) no filing of the assignment, no\nnotice to the lessee of the assignment, and no requirement that the\nlessor be deprived of dominion over payments upon the agreement or over\nthe vehicle if repossessed by or returned to the lessor, shall be\nnecessary to the validity of a written assignment of a retail lease\nagreement as against creditors, subsequent purchasers, pledgees,\nmortgagees or encumbrancers of the lessor.\n  12. Unless the lessee has notice of actual or intended assignment of a\nretail lease agreement, payment thereunder made by the lessee to the\nlast known holder of such agreement shall be binding upon all subsequent\nholders or assignees. A notification which does not reasonably identify\nthe rights assigned is ineffective. If requested by the lessee, the\nassignee shall furnish reasonable proof that the assignment has been\nmade and unless he or she does so the lessee may pay the original\nlessor.\n  13. (a) Upon written request from the lessee, the holder of a retail\nlease agreement shall give or forward to the lessee a written statement\nof the dates and amounts of the rental payments that have been made\nunder the agreement and the total amount of the remaining rental\npayments. A lessee shall be given a written receipt for any payment when\nmade in cash.\n  (b) Upon written request from a lessee who is then entitled to\nterminate the agreement early, the holder of a retail lease agreement\nshall give or forward to the lessee a written statement of his or her\ngross early termination liability under the agreement.\n  14. No retail lease agreement shall contain any provision applicable\nto a natural person who leases a vehicle primarily for personal, family\nor household use by which:\n  (a) in the absence of the lessee's default, the holder may,\narbitrarily and without reasonable cause, accelerate the maturity of any\npart or all of the amount owing thereon;\n  (b) a power of attorney is given to confess judgment, or an assignment\nof wages is given;\n  (c) the lessor or holder of the agreement or other person acting on\nhis or her behalf is given authority to enter upon the lessee's premises\nunlawfully, or to commit any breach of the peace in the repossession of\nthe motor vehicle;\n  (d) the lessee waives any right of action against the lessor or holder\nof the agreement, or other person acting on his or her behalf, for any\nillegal act committed in the collection of payments under the agreement\nor in the repossession of the motor vehicle;\n  (e) the lessee executes a power of attorney appointing the lessor or\nholder of the agreement, or other person acting on his or her behalf, as\nthe lessee's agent in collection of payments under the agreement or in\nthe repossession of the motor vehicle; provided, however, that this\nparagraph shall not prohibit the inclusion in a retail lease agreement\nof a limited power of attorney or other provision authorizing the holder\nto execute in the name of the lessee any proofs of insurance claims or\nlosses or to endorse the name of the lessee on any insurance settlement\ndraft or check;\n  (f) the lessor is relieved from liability for any legal remedy which\nthe lessee may have had against the lessor under the agreement, or any\nseparate instrument executed in connection therewith;\n  (g) the maturity of any part or all of the amount owing thereon is\naccelerated where, following a default consisting solely of the failure\nto make timely rental payments, a lessee who has the right to reinstate\nthe agreement makes timely tender of an amount which would be sufficient\nto reinstate the agreement under paragraph (i) of subdivision five of\nthis section;\n  (h) the lessee waives any right to a trial by jury in any action or\nproceeding arising out of the agreement;\n  (i) a lessee who is not in default of his or her obligations under the\nagreement would be prohibited from terminating the agreement at any time\nafter the expiration of the first fifty percent of the total number of\nmonths of the lease term. The exercise of this right to terminate early\nvoluntarily is contingent upon the lessee discharging fully his or her\nliability under the early termination provisions of the agreement; or\n  (j) the lessee would be charged a turn-in fee at the expiration of the\nterm which constitutes solely an additional fee for administrative,\nhandling or clerical charges.\n  15. Any such prohibited provision shall be void but shall not\notherwise affect the validity of the agreement.\n  16. Where necessary to ensure consistency with the pronoun usage in\nthe underlying agreement, any language required by this article to be\nused in connection with a required disclosure may be modified to refer\nto the lessee in the first person and the holder in the second person.\n