2023 New York Laws › PEP - Personal Property › Article 9-A - Motor Vehicle Retail Leasing Act › 334 - Payment or Trade-in Pending Execution of Lease Agreement; Refund or Return Upon Non-Execution.

§  334.  Payment  or  trade-in  pending  execution of lease agreement;
refund or return upon non-execution. 1. Any payment made by cash,  check
or  similar  means  to  a lessor pending the execution of a retail lease
agreement shall be refunded  to  the  lessee  in  the  event  the  lease
agreement is not executed. Any refund required by this subdivision shall
be  made  by  the  lessor  within  fifteen business days after the lease
application is rejected by the lessor or the prospective assignee.
2. If a lessee is required to make a payment  to  a  lessor  by  cash,
check  or  similar  means  pending  the  execution  of  a  retail  lease
agreement, the lessor shall notify the lessee in writing that the lessee
has the right, if the lease application is not  approved,  to  have  any
traded-in  vehicle  returned promptly and receive a prompt refund of any
payments made.
3. If a lessee leaves his motor vehicle with the lessor in lieu of  or
in addition to a payment by cash, check or similar means, and the lessor
and  lessee  agree  that  the  parties  shall  enter into a retail lease
agreement, the lessor shall not sell or transfer the  vehicle  traded-in
until the lessee and the lessor execute a retail lease agreement. In the
event  a  lease  agreement  is  not  executed, the lessor shall promptly
return to the lessee the vehicle traded-in.
4. The provisions of this section shall not apply to any fee  charged,
received  or  collected by a holder in connection with the assumption of
an existing retail lease agreement.
5. The provisions of this section shall not apply to  the  sale  of  a
motor  vehicle  by  a prospective lessee to a prospective lessor under a
separate contract of sale for the price specified  in  the  contract  if
such  contract  is executed before the parties have consummated a retail
lease agreement, is in writing, is dated as of the date of the sale  and
is  signed  by  the  parties.  To be exempt under the provisions of this
subdivision, such agreement shall also:
(a) clearly and conspicuously disclose to the  seller  that  the  sale
price  for the vehicle establishes its value for purposes of determining
the amount the lessor will credit  as  a  "capitalized  cost  reduction"
under any retail lease agreement subsequently consummated by the parties
or  as  the  amount  due  to the lessee for the vehicle in the event the
parties fail to consummate a retail lease agreement;
(b) contain a conspicuous clause that is initialled separately by  the
prospective lessee whereby such lessee agrees to leave the amount of the
purchase  price  on  deposit  with  the  prospective  lessor pending the
consummation of a retail lease agreement for a currently produced  model
year  vehicle  that  is to be ordered specially from the manufacturer or
for a model year vehicle that is not yet in production as of the date of
the sale of the lessee's vehicle; and
(c) stipulate that seventy-five days after the date of the  sale,  the
prospective  lessee shall be entitled on demand to payment of the agreed
upon price for the vehicle unless within  that  time  the  parties  have
consummated  a  separate  retail  lease  agreement  or have agreed to an
earlier payment of the price to the lessee.