NY Pers Prop L § 501 (2021)
2021 New York Laws PEP - Personal Property Article 11 - Rental Purchase Agreements 501 - Form.

§  501.  Form. 1. A rental-purchase agreement must be written in plain English  and  in  any  other  language  used  by  the  merchant  in   an advertisement   related  to  the  rental-purchase  agreement.  Numerical amounts must be stated in figures.   2. Disclosures required by this section must be printed  or  typed  in each  rental-purchase  agreement  in  a size equal to at least ten-point bold-faced type.   3. A rental-purchase agreement may not contain a provision:  (a) requiring a confession of judgment;  (b) authorizing a merchant or an agent of the  merchant  to  commit  a breach of the peace in the repossession of merchandise;  (c)  waiving  a  defense, counterclaim, or right the consumer may have against the merchant or an agent of the merchant;  (d) requiring the purchase of insurance from the merchant to cover the merchandise;  (e) requiring the payment of a late charge or reinstatement fee unless a periodic payment is delinquent for more than three days for agreements that are renewed on week by week terms and  seven  days  for  agreements that are renewed on month by month terms, and the charge or fee is in an amount not more than the greater of ten percent of the delinquent amount or  three  dollars for agreements that are renewed on week by week terms and not more than the greater of ten percent of the delinquent amount or five dollars for agreements that are renewed on month by month terms. In the event that multiple items are leased to a consumer pursuant to  more than  one  rental-purchase  agreement,  any late fee imposed pursuant to this section shall not exceed ten percent of the total of  the  periodic payments that are delinquent.  (f)  requiring  a  payment in addition to regular periodic payments in order to acquire ownership of  the  merchandise  or  requiring  periodic payments  totalling more than the cost to acquire ownership, as provided in section five hundred three of this article.   4. Only one late charge or reinstatement fee may  be  assessed  for  a delinquent  periodic  payment  regardless  of the period during which it remains in default. No  merchant  shall  assess  a  late  charge  for  a periodic  payment  made in full on its due date or within three days for agreements that are renewed on week by week  terms  or  seven  days  for agreements  that  are  renewed  on  month  by  month terms when the only delinquency is attributable to late fees assessed  on  earlier  periodic payments.  With respect to payments accepted by mail or by store deposit box,  no  merchant  shall  assess  a  late  fee  for  payments which are post-marked  or  received  before  the  expiration  of  the   applicable delinquency periods.   5. A rental-purchase agreement must provide that:  (a)  a  charge  in  addition  to  periodic  payments,  if any, must be reasonably related to the cost of a service performed;  (b) a consumer who fails to make a timely  payment  may  reinstate  an agreement  without  losing  rights  or  options  previously acquired and without incurring any charges, other than rental charges for the time he possessed the  property,  except  for  those  charges  provided  for  in paragraph  (e)  of  subdivision  three  of  this  section  by making the required payment before the later of seven days or half  the  number  of days in a regular payment period after the due date of the payment;  (c)  if  the merchandise is returned or voluntarily surrendered by the consumer, other than through judicial  process,  during  the  applicable reinstatement period set forth in paragraph (b) of this subdivision, the consumer's  right  to  reinstate the agreement as set forth in paragraph (b) of this subdivision shall be extended for a period of not less  than one year after the date of the return of the merchandise.    6.  This  section  does  not  prevent  a  merchant  from attempting to repossess  merchandise  during  the  reinstatement  period  provided  in paragraph  (b) of subdivision five of this section. The consumer's right to  reinstate  an  agreement  does  not  expire  because   of   such   a repossession.  If  the  consumer  is  entitled  to  reinstatement  after repossession,  then,  within  fifteen  days  of  the  repossession,  the merchant  shall provide written notice to the consumer of the consumer's right  to  reinstate  the  agreement  pursuant  to  paragraph   (c)   of subdivision  five  of this section. On reinstatement, the merchant shall provide the consumer with the same merchandise or substitute merchandise of comparable  quality  and  condition.  If  substitute  merchandise  is provided,  the  merchant shall provide the consumer with the disclosures required in subdivision seven of this section.   7. (a) Every rental-purchase agreement shall be contained in a  single document which shall set forth all of the agreements of the merchant and the  consumer  with respect to the rights and obligations of each party. Every rental-purchase agreement shall clearly and conspicuously disclose all of the following:  (1) the names  of  the  merchant  and  the  consumer,  the  merchant's business  address and telephone number, the consumer's address, the date on which the agreement is executed, and a description of the merchandise sufficient to identify it;  (2) whether the merchandise subject to the  rental-purchase  agreement is  new  or  used, provided, however that it shall not be a violation of this section to indicate that the merchandise is used if it is  actually new;  (3)  the  minimum period for which the consumer is obligated under the rental-purchase agreement; the duration of the rental-purchase agreement if all regularly scheduled periodic payments are made, designated as the "rental period"; and the amount of each periodic payment;  (4) the total of payments and the total number  of  periodic  payments necessary  to  acquire  ownership of the merchandise if the renter makes all regularly scheduled periodic payments;  (5) the cash price of the merchandise subject to the  rental  purchase agreement;  (6) the cost of rental;  (7)  the amount and purpose of any other payment or fee in addition to those specified  pursuant  to  subparagraphs  three  and  four  of  this paragraph, including any late payment fee;  (8)  a  statement  that the total number and dollar amount of payments necessary to acquire ownership of the rental merchandise disclosed under subparagraph four of this paragraph does not include other fees, such as late payment fees, and that the consumer should read the rental-purchase agreement for an explanation of any applicable additional fees;  (9) whether  the  consumer  is  liable  for  loss  or  damage  to  the merchandise and, if so, the maximum amount for which the consumer may be liable,  which in the case of loss shall in no event be greater than the price the consumer would have paid to exercise an early purchase  option pursuant  to  this  article.  In  the case of damage to the merchandise, other than normal wear and tear the consumer shall  be  liable  for  the lesser  of  the  price the consumer would have paid to exercise an early purchase option pursuant to this article or the cost of  the  repair  as determined by the merchant;  (10)  that  the  consumer does not acquire ownership rights unless the consumer has complied with the ownership terms of the agreement;  (11) the following notice:                                   NOTICE    You are renting this merchandise. You will not own it until  you  make all  of  the  regularly scheduled payments or you use the early purchase option.   You  do  not have the right to keep the merchandise if you do not make required payments or do not use the early purchase option. If you miss a payment, the merchant can repossess the merchandise, but, you  may  have the right to the return of the same or similar merchandise.   See the contract for an explanation of your rights.  (12)  a  statement  of  the  consumer's  right  to  acquire ownership as provided in  section  five  hundred  four  of  this  article,  including substantially  the  following  statement:  "The attached chart shows the amount required to  exercise  your  early  purchase  option  after  each renewal  payment,  assuming you make each periodic payment on time." The rental-purchase agreement shall be accompanied by a  chart  showing  the amount  required  to exercise the consumer's early purchase option after each periodic payment if payments are made as scheduled;  (13) a description of the consumer's reinstatement rights as  provided in subdivision five of this section;  (14)  a  description of the consumer's right to lower periodic payment amounts as provided in section five hundred four-a of this article.  (15) if warranty coverage is transferable to a consumer  who  acquires ownership  of the merchandise, a statement that the unexpired portion of all warranties provided by the manufacturer, distributor, or  seller  of the  merchandise  that  is  the subject of the rental-purchase agreement will be transferred by the merchant to the  consumer  at  the  time  the consumer acquires ownership of the merchandise from the merchant; and  (16) a description of the merchant's obligation to maintain the rental merchandise  and  to  repair  or  replace rental merchandise that is not operating properly, as provided in section five hundred four-b  of  this article.  (b)  (1)  The disclosures required by subparagraphs three, four, five, and six of paragraph (a) of this subdivision  shall  be  printed  in  at least  ten-point boldfaced type or capital letters if typed and shall be grouped together in a box formed by a heavy line in the following form:  ________________________________________________________________________ TOTAL OF                 COST OF RENTAL           CASH PRICE PAYMENTS $                        $                        $ You must pay             Amount over              Merchandise available this amount to           cash                     at this own the                  price you will           price for cash from merchandise if           pay if                   the merchant. See you make all             you make all             about your the regular              regular                  early purchase payments.                payments.                option rights. You can buy the merchandise for less under the early purchase option.  ________________________________________________________________________                           AMOUNT OF                NUMBER      RENTAL                           EACH PAYMENT             OF          PERIOD                                                   PAYMENTS                           $                          per                          _______________                       insert period) ________________________________________________________________________  (2)  The  box  described  in  subparagraph one of this paragraph shall appear  immediately  above  the  space  reserved  for   the   consumer's signature.  (c)  The  disclosures required by subparagraphs three, four, five, and six of paragraph (a) of this subdivision shall be grouped together in  a box  formed  by  a heavy line in the form prescribed in paragraph (b) of this subdivision and shall be clearly and conspicuously placed on a  tag or  sticker affixed to the merchandise available for rental-purchase. If the merchandise available for rental-purchase is not  displayed  at  the merchant's  place  of  business  but  appears in a photograph or catalog shown to consumers, a tag or sticker shall be affixed to the  photograph of  the  merchandise  or catalog shown to consumers or shall be given to consumers. The disclosure required by subparagraph two of paragraph  (a) of  this  subdivision  also shall be clearly and conspicuously placed on the tag or sticker. The provisions of this paragraph shall not apply  to photographic  depictions  of merchandise that comply with the provisions of section five hundred five of this article.  (d) All disclosures required by this subdivision shall be  printed  or typed in a color or shade that clearly contrasts with the background.   8.  (a)  (1) Subject to federal law and regulation, no rental-purchase agreement  shall  contain  a  mandatory  arbitration   clause.   Nothing contained  herein  shall  be  construed  to  prohibit  a  merchant  from incorporating a provision within such contract that such merchant agrees that the decision of the arbitrator or panel  of  arbitrators  shall  be final  in  its  application  to  such  merchant and not subject to court review.  (2) The provisions of a mandatory arbitration clause shall be null and void but shall not constitute a violation of this article. The inclusion of such clause in a rental-purchase agreement shall not serve to  impair the enforceability of any other provision of such contract.  (b)  For  the  purposes  of this subdivision the following terms shall have the following meaning:  (1) "mandatory arbitration clause" shall  mean  a  term  or  provision contained  in a rental-purchase agreement which requires the consumer to submit any  controversy  thereafter  arising  under  such  agreement  to arbitration prior to the commencement of any legal action to enforce the provisions of such agreement and which also further provides language to the  effect  that the decision of the arbitrator or panel of arbitrators in its application to the consumer shall be final  and  not  subject  to court review.  (2)  The  term  "arbitration"  shall mean the use of a decision making forum conducted by an arbitrator or  panel  of  arbitrators  within  the meaning  and  subject  to  the provisions of article seventy-five of the civil practice law and rules.