2023 New York Laws › PEP - Personal Property › Article 9-A - Motor Vehicle Retail Leasing Act › 343 - Assessment of Excess Wear and Damage to the Vehicle.

§  343.  Assessment  of  excess wear and damage to the vehicle. 1. (a)
Upon the scheduled termination of a retail lease agreement,  the  holder
shall not charge, receive or collect a charge for excess wear and damage
to the vehicle which exceeds: (i) the actual cost of repairs, reduced by
all  discounts,  paid by the holder; or (ii) a true itemized estimate of
the cost of such repairs by an appraiser licensed  pursuant  to  section
three  hundred ninety-eight-d of the vehicle and traffic law selected by
the holder, of the cost of such repairs.
(b) Upon early termination of a retail  lease  agreement,  the  holder
shall not charge, receive or collect a charge for excess wear and damage
to the vehicle which exceeds the actual costs of repairs, reduced by all
discounts, paid by the holder.
2. In order for a holder to impose a charge for excess wear and damage
to  a  vehicle subject to a retail lease agreement, such agreement shall
contain a clause describing the excess wear and damage  to  the  vehicle
for  which  the  lessee  may be liable. Such holder shall, not more than
forty days nor less than twenty days prior to the scheduled  termination
date,  or,  not  more  than ten business days after the date of an early
termination of a lease agreement, mail or deliver to the lessee a notice
advising the lessee of the  following  rights  and  obligations  of  the
parties, herein granted and imposed:
(a)  Such  notice  shall include the following statement, as set forth
herein, at the beginning of the notice in at least ten-point bold type:
"YOUR LEASE AGREEMENT ALLOWS (HOLDER)  TO  ASSESS  A
CHARGE  FOR  EXCESS  WEAR AND DAMAGE TO THE VEHICLE.
YOU SHOULD OBTAIN YOUR OWN EVIDENCE OF  THE  CURRENT
CONDITION  OF  THE VEHICLE NOT MORE THAN TWENTY (20)
DAYS PRIOR TO  THE  SCHEDULED  TERMINATION  OF  YOUR
LEASE.  YOU  ALSO  WILL  HAVE  THE  RIGHT  TO SUBMIT
DISPUTES  TO  THE  ALTERNATE  ARBITRATION  MECHANISM
ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW
YORK STATE ATTORNEY GENERAL."
(b)  In  the case of a scheduled termination, of the lessee's right to
turn the vehicle in with a copy of an itemized appraisal of excess  wear
and  damage  to  the  vehicle  prepared  by  an appraiser licensed under
section three hundred ninety-eight-d of the  vehicle  and  traffic  law,
selected  by the lessee and conducted not more than twenty days prior to
the scheduled termination date;
(c) Of the right of the holder to, within thirty days after  the  date
on  which  the  vehicle comes into the actual physical possession of the
holder, obtain a written itemized appraisal of excessive wear and damage
to the vehicle prepared by an appraiser  licensed  under  section  three
hundred  ninety-eight-d  of  the vehicle and traffic law selected by the
holder;
(d) That if the lessee had not previously obtained  and  submitted  to
the  holder  a  written itemized appraisal on the lessee's own behalf in
accordance with paragraph (b) of this subdivision, the lessee will  have
the  greater  of  ten  business  days  after  the lessee has received or
fourteen  business  days  to  do  so  after  the  holder  has  sent,  in
conformance with subdivision three of this section, an itemized bill for
excess  wear and damage and a copy of the itemized appraisal prepared on
behalf of the holder, unless the lessee does  not  dispute  any  of  the
items  contained  therein. In the case where the holder bases the charge
for excess wear and damage on the actual cost  of  repairs,  the  notice
shall  also  inform  the lessee that should the lessee fail to obtain an
itemized written appraisal, he  or  she  is  entitled  to  dispute  only
whether any items claimed exist and/or are excess wear and damage to the
vehicle, but not the actual cost of making the repairs;
(e)  That  if  the  lessee  disputes that any of the items claimed for
excess wear and damage to the vehicle exist or are excessive in  nature,
the lessee may submit the dispute within sixty days of the date on which
the  vehicle  comes into the actual physical possession of the holder to
the holder's informal dispute settlement procedure, if any, or, upon the
payment  of  the  prescribed  filing  fee  which  is  refundable  if the
arbitrator finds in the lessee's favor, to  an  alternative  arbitration
mechanism  established  under  regulations  promulgated  by the attorney
general of the state of New York;
(f) That if there exists a discrepancy between the itemized appraisals
obtained by the holder and the lessee, if any, the holder  shall  submit
the  dispute  within  sixty  days of the date on which the vehicle comes
into the actual physical  possession  of  the  holder  to  the  holder's
informal  dispute  settlement  procedure,  if  any,  unless  the  lessee
exercises the option granted by paragraph (b)  of  subdivision  five  of
this  section;  provided,  however,  that  in  the  event the holder has
complied with the provisions of  this  subdivision,  a  lessee  who  has
failed  to obtain an itemized appraisal of the excessive wear and damage
to the vehicle in accordance with either paragraph (b) or  (c)  of  this
subdivision  may  dispute  only the existence of any item or whether the
wear is excessive in nature, but may not  dispute  the  actual  cost  of
repairs.
3.  (a)  Itemized  bill.  (i)  In  the event that the holder wishes to
impose a charge for excess wear and damage to the  vehicle,  the  holder
shall  send  by  registered  mail  or  hand-deliver to the lessee a bill
containing an itemized list of the estimated or actual cost of repairing
or replacing each item as to which an excess wear and damage  charge  is
claimed and specifying the address to which any response must be mailed.
The  bill  shall be mailed or hand-delivered to the lessee within thirty
days after  the  date  on  which  the  vehicle  comes  into  the  actual
possession of the holder.
(ii)  The itemized bill shall include the following statements printed
in at least ten-point type: "You  are  being  asked  to  pay  an  amount
claimed  for  excess  wear  and  damage  to  the vehicle. If you wish to
contest this amount, you must  obtain  an  itemized  appraisal  from  an
appraiser  licensed  by the New York State Department of Motor Vehicles,
and mail or deliver a copy of such appraisal to  (NAME  AND  ADDRESS  OF
HOLDER)  within  the  greater  of  fourteen business days after (NAME OF
HOLDER) has sent, or ten business days of receipt of this bill and (NAME
OF HOLDER'S) itemized appraisal. If you fail to do so, you will  forfeit
your right to contest in arbitration any actual repair costs incurred by
the  (HOLDER)  for  excess  wear and damage; however, you do not forfeit
your right to contest the existence of any item or whether the  wear  is
excessive in nature."
(iii)  The  itemized  bill shall also notify lessees of their material
rights and obligations for dispute resolution in arbitration.
(b) Itemized appraisal. (i) A holder who imposes a charge  for  excess
wear  and  damage  to  the  vehicle  shall  send  by  registered mail or
hand-deliver, within thirty days after the date  on  which  the  vehicle
comes  into actual physical possession of the holder, a written itemized
appraisal prepared by an appraiser licensed under section three  hundred
ninety-eight-d  of  the  vehicle and traffic law. The appraisal shall be
dated, signed by the holder or its agent, and identify by type each item
of excess wear and damage.
(ii) The following notice shall be included at the  beginning  of  the
itemized appraisal prepared on behalf of the holder and furnished to the
lessee,
"ALL   ITEMS  OF  DAMAGE  FOR  WHICH  A  CHARGE  FOR
EXCESSIVE WEAR OR DAMAGE  WILL  BE  CLAIMED  BY  THE
HOLDER  MUST  BE  NOTED  IN  THIS  APPRAISAL. IF YOU
DISPUTE THE EXISTENCE  OR  NATURE  OF  ANY  ITEM  OF
DAMAGE IDENTIFIED IN THIS NOTICE, YOU MAY SUBMIT THE
DISPUTE   TO  THE  ALTERNATE  ARBITRATION  MECHANISM
ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW
YORK STATE ATTORNEY GENERAL."
4. (a) The itemized bill and appraisal required by  subdivision  three
of   this   section  may  be  combined  into  a  single  document.  Mere
acknowledgement by the  lessee  of  receipt  of  an  itemized  bill,  an
appraisal, or a combination of the two shall not operate as an admission
of the existence, nature or amount of any of the items therein.
(b)  (i)  The holder shall grant the lessee access to the vehicle at a
reasonable time and place in order for the lessee to obtain an  itemized
appraisal  on the lessee's own behalf. The holder shall not be required,
however, to deliver the  vehicle  to,  or  produce  the  vehicle  at,  a
destination designated by the lessee for such purpose.
(ii)  A  holder  may  not  fail to provide, either intentionally or by
actions or omissions, reasonable access to the vehicle by  the  licensed
appraiser  chosen  by the lessee within the period during which a lessee
must obtain and submit an appraisal. If the holder fails to  so  provide
reasonable  access  to  the  vehicle, the holder shall be deemed to have
forfeited its contractual right to charge, receive or collect any charge
for excessive wear and damage to the vehicle from the lessee.
(c) A lessor or holder of a retail lease agreement shall not report an
unsatisfied claim for excess wear  and  damage  to  a  credit  reporting
agency  as a derogatory item of information until: (i) the expiration of
the time granted under article seventy-five of the  civil  practice  law
and  rules  for  the  filing  of  a  petition  to  vacate  or  modify an
arbitrator's award; (ii) the  issue  has  been  a  subject  of  a  final
judgment; or (iii) where the holder and the lessee execute a settlement,
thirty  days  after the date a payment is due under the settlement if no
payment has been made.
5. (a) Arbitration and enforcement. If a  holder  has  established  or
participates  in  an  informal  dispute  settlement  procedure  which is
consistent in all respects with the provisions  of  part  seven  hundred
three  of title sixteen of the code of federal regulations, any dispute,
disparity or conflict  between  any  appraisal  report  prepared  by  an
appraiser  licensed  by the state department of motor vehicles on behalf
of the holder and one prepared on behalf of the lessee shall be  decided
by   such  informal  dispute  settlement  procedure.  Holders  utilizing
informal dispute settlement  procedures  pursuant  to  this  subdivision
shall insure that the arbitrators participating in such informal dispute
settlement procedures are familiar with the provisions of this section.
(b) Upon the payment of a prescribed filing fee, a consumer shall have
the  option  of  submitting any dispute arising under this section to an
alternate arbitration mechanism established pursuant to  regulations  to
be  promulgated  hereunder  by the attorney general. Upon application of
the consumer and payment of the filing fee, the holder shall  submit  to
such   alternate   arbitration.  Such  alternate  arbitration  shall  be
conducted by a professional arbitrator or arbitration firm appointed  by
and   under  regulations  established  by  the  attorney  general.  Such
alternate arbitration mechanism shall ensure the personal objectivity of
its arbitrators and the right of each party to present its case,  to  be
in  attendance  during  any  presentation made by the other party and to
rebut or refute such presentation. In all other respects, such alternate
arbitration mechanism shall be governed by article seventy-five  of  the

civil  practice  law  and rules. Holder or lessee shall have thirty days
from the date of mailing of a copy of the arbitrator's decision to  such
holder or lessee to comply with the terms of such decision.
(c)  In  no event shall any person who has participated in an informal
dispute settlement procedure be precluded from  seeking  the  rights  or
remedies available to such person under applicable law.
(d)  Nothing  in  this  section  shall  be deemed to prohibit: (i) the
holder and the lessee from agreeing upon termination of the agreement to
the payment by the lessee, in satisfaction  of  his  or  her  obligation
under the provisions of the agreement, of an amount which the lessor and
the  lessee agree is a reasonable figure to compensate for damage to the
vehicle; (ii) the holder  from  retaining  any  portion  of  a  security
deposit  in  satisfaction  of  amounts  owed  to the holder that are not
attributable to excess wear and tear; or (iii) to restrict or  otherwise
regulate the assessment of charges for excess mileage.