New York Personal Property Law
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 consumers 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 consumers 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 consumers 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 merchants business address and telephone number, the consumers 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;
(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 consumers 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 consumers early purchase option after each periodic payment if payments are made as scheduled;
(13) a description of the consumers reinstatement rights as provided in subdivision five of this section;
(14) a description of the consumers 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 merchants 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 consumers 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 merchants 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.