1812.620. This title shall be known and may be cited as the
Karnette Rental-Purchase Act.
1812.621. The Legislature hereby finds and declares that consumers
enter into rental-purchase contracts that do not adequately disclose
the actual terms and cost of the transaction or the consumer's
liability for certain breaches of the contract, and that contain
unfair provisions, including unfair terms related to fees and
charges, the exercise or the termination of purchase option rights,
property loss and damage, and the repair or replacement of improperly
functioning rental property.
It is, therefore, the intent of the Legislature in enacting this
title to ensure that consumers are protected from misrepresentations
and unfair dealings by ensuring that consumers are adequately
informed of all relevant terms, including the cash price, periodic
payments, total purchase price, and other applicable charges or fees,
before they enter into rental-purchase contracts.
It is further the intent of the Legislature to (a) prohibit unfair
or unconscionable conduct toward consumers in connection with
rental-purchase transactions, (b) prohibit unfair contract terms,
including unreasonable charges, (c) prevent the forfeiture of
contract rights by consumers, (d) provide a right of reinstatement
and a reasonable formula for the exercise of purchase option rights
under a rental-purchase contract, (e) provide reasonable requirements
for the servicing, repair, and replacement of improperly functioning
rental property, and (f) cover rental-purchase transactions under
existing laws, including laws governing debt collection, cosigners,
home solicitation contracts, and warranties. This title shall be
liberally construed to achieve its remedial objectives.
1812.622. As used in this title:
(a) "Advertisement" means a commercial message in any medium that
directly or indirectly solicits or promotes one or more specific
rental-purchase transactions, excluding instore merchandising aids.
This definition does not limit or alter the application of other
laws, including Chapter 5 (commencing with Section 17200) of Part 2
and Chapter 1 (commencing with Section 17500) of Part 3, of Division
7 of the Business and Professions Code, to rental-purchase
transactions.
(b) "Consumer" means a natural person or persons who rent or lease
personal property from a lessor pursuant to a rental-purchase
agreement or to whom a lessor offers personal property for use
pursuant to a rental-purchase agreement.
(c) "Lessor" means any person or entity that provides or offers to
provide personal property for use by consumers pursuant to a
rental-purchase agreement.
(d) "Rental-purchase agreement," except as otherwise provided in
this subdivision, means an agreement between a lessor and a consumer
pursuant to which the lessor rents or leases, for valuable
consideration, personal property for use by a consumer for personal,
family, or household purposes for an initial term not exceeding four
months that may be renewed or otherwise extended, if under the terms
of the agreement the consumer acquires an option or other legally
enforceable right to become owner of the property. A rental-purchase
agreement is a lease subject to Title 1.5 (commencing with Section
1750) and Title 1.7 (commencing with Section 1790).
"Rental-purchase agreement" shall not be construed to be, nor be
governed by, and shall not apply to, any of the following:
(1) A retail installment sale, as defined in Section 1802.5.
(2) A retail installment contract, as defined in Section 1802.6.
(3) A retail installment account, as defined in Section 1802.7.
(4) A lease or agreement that constitutes a security interest, as
defined in Section 1201 of the Commercial Code.
(5) A consumer credit contract, as defined in Section 1799.90.
(e) "Cash price" means the price of the personal property
described in the rental-purchase agreement that the consumer may pay
in cash to the lessor at the inception of the rental-purchase
agreement to acquire ownership of that personal property.
(f) "Cost of rental" means the difference between the total of all
periodic payments necessary to acquire ownership under the
rental-purchase agreement and the cash price of the rental property
that is subject to the rental-purchase agreement.
(g) "Fee" means any payment, charge, fee, cost, or expense,
however denominated, other than a rental payment.
(h) "Appliance" means and includes any refrigerator, freezer,
range including any cooktop or oven, microwave oven, washer, dryer,
dishwasher, or room air conditioner or air purifier.
(i) "Electronic set" means and includes any television, radio,
camera, video game, or any type of device for the recording, storage,
copying, printing, transmission, display, or playback of any sound
or image, but does not include any item that is part of a computer
system.
(j) "Computer system" means a computer processor and a video
monitor, printer, and peripheral items primarily designed for use
with a computer. Audio and video devices, which are commonly used for
entertainment and into which data may be downloaded from a computer,
are not part of a computer system.
(k) "Lessor's cost" means the documented actual cost, including
actual freight charges, of the rental property to the lessor from a
wholesaler, distributor, supplier, or manufacturer and net of any
discounts, rebates, and incentives.
(l) "Total of payments" means the total amount of periodic
payments necessary to acquire ownership of the property that is the
subject of the rental-purchase agreement if the consumer makes all
regularly scheduled payments.
1812.623. (a) Every rental-purchase agreement shall be contained in
a single document which shall set forth all of the agreements of the
lessor and the consumer with respect to the rights and obligations
of each party. Every rental-purchase agreement shall be written in at
least 10-point type in the same language as principally used in any
oral sales presentation or negotiations leading to the execution of
the agreement, and shall clearly and conspicuously disclose all of
the following:
(1) The names of the lessor and the consumer, the lessor's
business address and telephone number, the consumer's address, the
date on which the agreement is executed, and a description of the
property sufficient to identify it.
(2) Whether the property subject to the rental-purchase agreement
is new or used. If the property is new, the lessor shall disclose the
model year or, if the model year is not known by the lessor, the
date of the lessor's acquisition of the property. If the property is
used, the age or the model year shall be disclosed if known by the
lessor.
(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 property if the renter
makes all regularly scheduled periodic payments.
(5) The cash price of the property subject to the rental purchase
agreement.
(6) The cost of rental.
(7) The amount and purpose of any other payment or fee permitted
by this title in addition to those specified pursuant to paragraphs
(3) and (4), including any late payment fee.
(8) A statement that the total number and dollar amount of
payments necessary to acquire ownership of the rental property
disclosed under paragraph (4) does not include other fees permitted
by this title, 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
rental property and, if so, the maximum amount for which the consumer
may be liable as provided in subdivision (a) of Section 1812.627.
(10) The following notice:
NOTICE
You are renting this property. 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 property if you do not make
required payments or do not use the early purchase option. If you
miss a payment, the lessor can repossess the property, but, you may
have the right to the return of the same or similar property.
See the contract for an explanation of your rights.
(11) A description of the consumer's right to acquire ownership of
the property before the end of the rental period as provided in
subdivisions (a) and (b) of Section 1812.632.
(12) A description of the consumer's reinstatement rights as
provided in Section 1812.631.
(13) If warranty coverage is transferable to a consumer who
acquires ownership of the property, a statement that the unexpired
portion of all warranties provided by the manufacturer, distributor,
or seller of the property that is the subject of the rental-purchase
agreement will be transferred by the lessor to the consumer at the
time the consumer acquires ownership of the property from the lessor.
(14) A description of the lessor's obligation to maintain the
rental property and to repair or replace rental property that is not
operating properly, as provided in Section 1812.633.
(b) (1) The disclosures required by paragraphs (3), (4), (5), and
(6) of subdivision (a) shall be printed in at least 10-point boldface
type or capital letters if typed and shall be grouped together in a
box formed by a heavy line in the following form:
COST OF RENTAL CASH PRICE
$ $
Amount over Property available
cash at
price you will this
TOTAL OF pay price for cash
PAYMENTS if from
$ you make all the lessor. See
You must pay regular about your
this amount payments. early purchase
to option rights.
own the
property if
you make
all
the regular
payments.
You can
buy
the
property
for
less
under
the AMOUNT
early OF
purchase EACH PAYMENT
option. $ NUMBER
per OF RENTAL
PAYMENTS PERIOD
________________
(insert period)
(2) The box described in paragraph (1) shall appear immediately
above the space reserved for the buyer's signature.
(c) The disclosures required by paragraphs (3), (4), (5), and (6)
of subdivision (a) shall be grouped together in a box formed by a
heavy line in the form prescribed in subdivision (b) and shall be
clearly and conspicuously placed on a tag or sticker affixed to the
property available for rental-purchase. If the property available for
rental-purchase is not displayed at the lessor'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 property or catalog
shown to consumers or shall be given to consumers. The disclosure
required by paragraph (2) of subdivision (a) also shall be clearly
and conspicuously placed on the tag or sticker.
(d) All disclosures required by this section shall be printed or
typed in a color or shade that clearly contrasts with the background.
1812.624. (a) No rental-purchase agreement or any document that the
lessor requests the consumer to sign shall contain any provision by
which:
(1) A power of attorney is given to confess judgment in this state
or to appoint the lessor, its agents, or its successors in interest
as the consumer's agent in the collection of payments or the
repossession of the rental property.
(2) The consumer authorizes the lessor or its agent to commit any
breach of the peace in repossessing the rental property or to enter
the consumer's dwelling or other premises without obtaining the
consumer's consent at the time of entry.
(3) The consumer agrees to purchase from the lessor insurance or a
liability waiver against loss or damage to the rental property.
(4) The consumer waives or agrees to waive any defense,
counterclaim, or right the consumer may have against the lessor, its
agent, or its successor in interest.
(5) The consumer is required to pay any fee in connection with
reinstatement except as provided in Section 1812.631.
(6) The consumer is required to pay a fee in connection with the
pickup of the property or the termination or rescission of the
rental-purchase agreement.
(7) The consumer is required to pay any fee permitted by the
rental-purchase agreement and this title that is not reasonable and
actually incurred by the lessor. The lessor has the burden of proof
to establish that a fee was reasonable and was an actual cost
incurred by the lessor.
(8) The consumer is required to pay a downpayment, more than one
advance periodic rental payment, or any other payment except a
security deposit permitted under Section 1812.625.
(9) Except to the extent permitted by subdivision (b) of Section
1812.627, the consumer waives any rights under Sections 1928 or 1929.
(10) The consumer grants a security interest in any property.
(11) The consumer's liability for loss or damage to the property
which is the subject of the rental-purchase agreement may exceed the
maximum described in subdivision (a) of Section 1812.627.
(12) Except under the circumstances authorized by subdivision (a)
or (b) of Section 1812.632, the consumer is obligated to make any
balloon payment. A "balloon payment" is any payment for the purchase
or use of the rental property which is more than the regularly
scheduled periodic payment amount.
(13) The consumer is required to pay a late payment fee that is
not permitted under Section 1812.626.
(14) The consumer is required to pay both a late payment fee and a
fee for the lessor's collection of a past due payment at the
consumer's home or other location.
(15) The consumer waives or offers to waive any right or remedy
against the lessor, its agents, or its successors in interest for any
violation of this title or any other illegal act. This subdivision
does not apply to a document executed in connection with the bona
fide settlement, compromise, or release of a specific disputed claim.
(16) The lessor, its agents, or its successors in interest may
commence any judicial action against the consumer in a county other
than the county in which (A) the rental-purchase agreement was signed
or (B) the consumer resides at the time the action is commenced.
(17) The amount stated as the cash price for any item of personal
property exceeds the cash price permitted under Section 1812.644.
(18) The total of payments exceeds the amount permitted under
Section 1812.644.
(b) Any provision in a rental-purchase agreement that is
prohibited by this title shall be void and unenforceable and a
violation of this title. A rental-purchase agreement which contains
any provision that is prohibited by this title is voidable by the
consumer.
1812.625. (a) The lessor may require the consumer to pay a security
deposit, however denominated, in an amount not to exceed the
equivalent of one month's rental only for the purpose of satisfying
any lawful claim by the lessor, up to the maximum described in
subdivision (a) of Section 1812.627, for those amounts reasonably
necessary to pay for the loss of the property or the repair of
damage, exclusive of reasonable wear and tear.
(b) Within two weeks after the lessor has taken possession of the
property from the consumer, the lessor shall deliver to the consumer
the amount of the security deposit less the amount, if any, deducted
for loss or repair as permitted by this title. If any amount is
deducted, the lessor shall also deliver to the consumer at that time
a copy of an itemized statement indicating the amount of the security
deposit, the amount deducted for loss or repair, and a detailed
statement of the basis for the deduction. Delivery may be made by
personal delivery or by first-class mail, postage prepaid.
1812.626. (a) The lessor may assess a late payment fee if the late
payment fee is specified in the rental-purchase agreement and is
permitted by this section.
(b) No fee shall be assessed for a payment which is less than
three days late if the rental-purchase agreement specifies weekly
periodic payments.
(c) No fee shall be assessed for a payment which is less than 7
days late if the rental-purchase agreement specifies longer than
weekly periodic payments.
(d) The lessor may assess more than one late fee for a particular
late payment if the total of all fees assessed for that late payment
does not exceed the maximum provided in subdivision (e). If the
maximum total late payment fee has been imposed for a particular
payment, no additional late payment fee may be imposed for that
payment.
(e) The total of all fees for a late payment shall not exceed the
lesser of 5 percent of the payment or five dollars ($5), except that
a minimum total fee of two dollars ($2) may be required.
1812.627. (a) The consumer's liability for loss or damage to the
property which is the subject of the rental-purchase agreement shall
in no event exceed the lesser of (1) the fair market value at the
time of the loss or damage or (2) the amount that would be necessary
for the renter to exercise the purchase option provided in
subdivision (a) of Section 1812.632.
(b) A lessor and a consumer may agree that the consumer may be
liable for loss only up to the maximum amount described in
subdivision (a) and only for one of the following:
(1) Loss caused by the consumer's negligent, reckless, or
intentional acts.
(2) Loss caused by the theft of the property subject to the
rental-purchase agreement unless one of the following is applicable:
(A) There is evidence of a burglary of the premises in which the
property is located, such as physical evidence or an official report
filed by the consumer with the police or other law enforcement
agency.
(B) The consumer establishes by the preponderance of the evidence
that the consumer has not committed or aided or abetted in the
commission of the theft of the property.
1812.628. (a) In addition to the circumstances described in
subdivision (a) of Section 1689.5, a rental-purchase agreement
regardless of the amount involved shall be deemed a home solicitation
contract or offer if the rental-purchase agreement has an initial
term that exceeds one week and was made at other than appropriate
trade premises, as defined in subdivision (b) of Section 1689.5.
(b) In addition to any other right of cancellation, a consumer has
the right to cancel a rental-purchase agreement, without penalty or
obligation if the consumer has not taken possession of the property.
1812.629. (a) Upon the request of the consumer, the lessor shall
provide the information as required by subdivision (b) of Section
1812.623 in an exemplar of the rental-purchase agreement covering the
property specified by the consumer and shall provide the consumer
with a copy of the proposed rental-purchase agreement prior to its
execution. The consumer may take this copy from the lessor's
premises.
(b) The lessor shall not obtain the consumer's signature to a
rental-purchase agreement if it contains blank spaces to be filled in
after it has been signed.
(c) A copy of the fully completed rental-purchase agreement and
all other documents which the lessor requests the consumer to sign
shall be given to the consumer at the time they are signed. The
rental-purchase agreement shall not be enforceable against the
consumer until the consumer has received a signed copy.
(d) The lessor shall deliver to the consumer a written receipt for
each payment made by the consumer.
1812.630. (a) (1) Any advertisement of a rental-purchase agreement
that states the amount of any payment shall clearly and conspicuously
disclose all of the following in the same language used in the
advertisement:
(A) That the agreement advertised is a rental-purchase agreement.
(B) That the property is used if that is the case.
(C) That ownership is not acquired until all of the payments
necessary to acquire ownership have been made.
(D) The total amount and number of periodic payments necessary to
acquire ownership.
(2) If more than one item is advertised in one print
advertisement, the lessor may comply with paragraph (1) by clearly
and conspicuously including in the advertisement a table or schedule
sufficient in detail to permit determination of the total amount and
number of periodic payments necessary to acquire ownership of the
items advertised having the highest and lowest total amount of
periodic payments necessary to acquire ownership.
(b) A lessor who advertises "no credit check" or otherwise states
or implies that no inquiry will be made of a consumer's credit
history or creditworthiness shall not (1) make any inquiry or request
a consumer to complete any document concerning the consumer's assets
or credit history, (2) obtain a consumer credit report as defined in
subdivision (c) of Section 1785.3, or (3) obtain an investigative
consumer report as defined in subdivision (c) of Section 1786.2.
1812.631. (a) A consumer may be deemed in default under the
rental-purchase agreement if either of the following applies:
(1) The rental-purchase agreement requires weekly periodic rental
payments and the consumer has not made a payment by the end of the
seventh day after its due date.
(2) The rental-purchase agreement requires rental payments in
periodic intervals longer than one week and the consumer has not made
a payment by the end of the 10th day after its due date.
(b) A consumer who is in default under a rental-purchase agreement
requiring weekly periodic rental payments may reinstate the
rental-purchase agreement, without losing any rights or options under
that agreement, by paying all past due payments, including late
payment fees, by the end of the seventh day after the due date of the
payment in default if the consumer retains possession of the
property and within one year after the due date of the payment in
default if the consumer returns or tenders the property to the
lessor, unless the lessor permits the consumer to retain the property
during this period.
(c) A consumer who is in default under a rental-purchase agreement
requiring rental payments in periodic intervals longer than one week
may reinstate the rental-purchase agreement, without losing any
rights or options under that agreement, by paying all past due
payments, including late payment fees, by the end of the 10th day
after the due date of the payment in default if the consumer retains
possession of the property and within one year after the due date of
the payment in default if the consumer returns or tenders the
property to the lessor, unless the lessor permits the consumer to
retain the property during this period.
(d) Upon reinstatement, the lessor shall provide the consumer with
the same rental property, if available, or substitute property of
the same brand, if available, and comparable quality, age, condition,
and warranty coverage. If substitute property is provided, the
lessor shall provide the lessee with the disclosures required in
paragraph (2) of subdivision (a) of Section 1812.623.
(e) (1) Except as provided in paragraph (2), a lessor shall not
deny a consumer the right of reinstatement provided in this section.
(2) This section does not apply to a consumer who has (A) stolen
or unlawfully disposed of the property, (B) damaged the property as
the result of the consumer's intentional, willful, wanton, or
reckless conduct, or (C) defaulted in making payments as described in
subdivision (a) on three consecutive occasions.
(3) If the lessor denies a consumer the right to reinstate
pursuant to paragraph (2), the lessor has the burden of proof to
establish that the denial was in good faith and was permitted under
paragraph (2).
(f) Nothing in this subdivision prohibits the lessor from
contacting the consumer provided that the lessor does not violate
Section 1812.638.
1812.632. (a) (1) The consumer has the right to acquire ownership
of the property within three months of the date on which the consumer
executed the rental-purchase agreement by tendering to the lessor an
amount equal to the cash price and any past due fees less all
periodic payments that the consumer has paid.
(2) Within 10 days after the consumer executes the rental purchase
agreement, the lessor shall personally deliver or send by
first-class mail to the consumer a notice informing the consumer of
the right described in paragraph (1), including the amount the
consumer must pay to acquire ownership and the date by which payment
must be made. The statement shall not be accompanied by any other
written information including solicitations for other rental-purchase
agreements.
(b) After the expiration of the three-month period following the
execution of the rental-purchase agreement, the consumer has the
right to acquire ownership of the property at any time by tendering
to the lessor all past due payments and fees and an amount equal to
the cash price stated in the rental-purchase agreement multiplied by
a fraction that has as its numerator the number of periodic payments
remaining under the agreement and that has as its denominator the
total number of periodic payments.
(c) (1) The lessor shall, in connection with a consumer's rights
under subdivision (b), provide the consumer with a written statement
in the manner set forth in paragraph (2) below that clearly states
(A) the total amount the consumer would have to pay to acquire
ownership of the rental property if the consumer makes all regularly
scheduled payments remaining under the rental-purchase agreement and
(B) the total amount the consumer would have to pay to acquire
ownership of that property pursuant to subdivision (a).
(2) The statement required by paragraph (1) shall be personally
delivered or sent by first-class mail to the consumer within seven
days after (A) the date the consumer requests information about the
amount required to purchase the rental property and (B) the date the
consumer has made one-half of the total number of periodic payments
required to acquire ownership of the rental property. The statement
shall not be accompanied by any other written information including
solicitations for other rental-purchase agreements.
(d) (1) Subject to paragraph (2), if any consumer who has signed
the rental-purchase agreement has experienced an interruption or
reduction of 25 percent or more of income due to involuntary job
loss, involuntary reduced employment, illness, pregnancy, or
disability after one-half or more of the total amount of the periodic
payments necessary to acquire ownership under the agreement has been
paid, the lessor shall reduce the amount of each periodic rental
payment by (A) the percentage of the reduction in the consumer's
income or (B) 50 percent, whichever is less, for the period during
which the consumer's income is interrupted or reduced. If payments
are reduced, the total dollar amount of payments necessary to acquire
ownership shall not be increased, and the rights and duties of the
lessor and the consumer shall not otherwise be affected. When the
consumer's income is restored, the lessor may increase the amount of
rental payments, but in no event shall rental payments exceed the
originally scheduled amount of rental payments.
(2) Paragraph (1) applies only after the consumer provides to the
lessor some evidence of the amount and cause of the interruption or
reduction of income.
1812.633. (a) The lessor shall maintain the property subject to the
rental-purchase agreement in good working order while the agreement
is in effect without charging any fee to the consumer in addition to
the regularly scheduled rental payments set forth in the
rental-purchase agreement.
(b) By the end of the second business day following the day on
which the lessor received notice from the consumer that the property
is not operating properly, the lessor shall repair or replace the
property without any fee to the consumer in addition to the regularly
scheduled rental payments set forth in the rental-purchase
agreement.
(c) If a repair or replacement cannot be immediately effected, the
lessor shall temporarily substitute property of comparable quality
and condition while repairs are being effected. If repairs cannot be
completed to the reasonable satisfaction of the consumer within 30
days after the lessor receives notice from the consumer or within a
longer period voluntarily agreed to by the consumer, the lessor shall
permanently replace the property.
(d) All replacement property shall be the same brand, if
available, and comparable in quality, age, condition, and warranty
coverage to the replaced property. If the same brand is not
available, the brand of the replacement property shall be agreeable
to the consumer.
(e) All of the consumer's and lessor's rights and obligations
under the rental-purchase agreement and this title that applied to
the property originally subject to the rental-purchase agreement
shall apply to any replacement property.
(f) The consumer shall not be charged, or held liable for, any
rental fee for any period of time during which the property that is
the subject of the rental-purchase agreement or any property
substituted for it pursuant to this section is not in good working
order.
(g) This section does not apply to the repair of damage resulting
from the consumer's intentional, willful, wanton, reckless, or
negligent conduct. If the lessor does not comply with this section
because of this subdivision, the lessor has the burden of proof to
establish that noncompliance was justified and in good faith.
(h) A lessor shall not deliver to a consumer any property which
the lessor knows or has reason to know is defective.
1812.634. When the lessor transfers ownership of the rental
property, the lessor shall also transfer to the consumer the
unexpired portion of any transferable warranties provided by the
manufacturer, distributor, or seller of the rental property, and
these warranties shall apply as if the consumer were the original
purchaser of the goods.
1812.635. (a) A lessor shall not sell, or offer for sale, a service
contract for the rental property if that service contract provides
any coverage while the rental-purchase agreement is in effect.
(b) A lessor may sell, or offer for sale, a service contract
providing coverage for the rental property after the consumer
acquires ownership of that property, if both of the following
conditions are satisfied:
(1) The lessor does not sell, or offer to sell, the service
contract before (A) the consumer pays at least one-half of the total
number of periodic payments necessary to acquire ownership of the
property or (B) the consumer acquires ownership of the property, as
provided in Section 1812.632, whichever occurs first.
(2) The lessor clearly and conspicuously indicates to the consumer
in writing before the consumer's purchase of the service contract
that the purchase is optional.
(c) If the consumer chooses to purchase a service contract before
the expiration of the rental-purchase agreement and defaults or
otherwise does not make all payments necessary to acquire ownership
within the rental period specified in the agreement, the lessor shall
refund all consideration paid for the service contract to the
consumer within two weeks after the lessor has received the consumer'
s last rental payment. This subdivision does not limit or alter any
of the consumer's cancellation or refund rights under the service
contract or under other provisions of law.
(d) "Service contract" has the meaning set forth in subdivision
(o) of Section 1791.
1812.636. (a) A consumer damaged by a violation of this title by a
lessor is entitled to recover all of the following:
(1) Actual damages.
(2) Twenty-five percent of an amount equal to the total amount of
payments required to obtain ownership if all payments were made under
the rental-purchase agreement, but not less than one hundred dollars
($100) nor more than one thousand dollars ($1,000).
(3) The consumer's reasonable attorney's fees and court costs.
(4) Exemplary damages, in the amount the court deems proper, for
intentional or willful violations of this title.
(5) Equitable relief as the court deems proper.
(b) Where more than one consumer is a party to a rental-purchase
agreement, the limitations of subdivision (a) shall apply to all
those consumers in the aggregate, and no more than one recovery shall
be permitted for each violation.
1812.637. (a) A lessor is not liable for a violation of this title
if, before the 30th calendar day after the date the lessor discovers
a bona fide error and before an action under this title is filed or
written notice of the error is received by the lessor from the
consumer, the lessor gives the consumer written notice of the error.
"Bona fide error," as used in this section, means a violation that
was not intentional and resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adapted to
avoid that error. Examples of a bona fide error include clerical
errors, calculation errors, errors due to unintentionally improper
computer programming or data entry, and printing errors, but does not
include an error of legal judgment with respect to a lessor's
obligations under this title.
(b) Notwithstanding subdivision (a), if the lessor notifies the
consumer of a bona fide error the correction of which would increase
the amount of any payment, the lessor may not collect the amount of
the increase, and the consumer may enforce the rental-purchase
agreement as initially written.
(c) Notwithstanding subdivision (a), if the lessor notifies the
consumer of a bona fide error the correction of which would lower the
amount of any payment, the lessor shall immediately refund to the
consumer the difference between what the consumer paid and what the
consumer should have paid if the agreement were correct at the
inception of the transaction.
1812.638. (a) A lessor shall not engage in any unfair, unlawful, or
deceptive conduct, or make any untrue or misleading statement in
connection with the collection of any payment owed by a consumer or
the repossession of any property or attempt to collect or collect any
payment in a manner that would be unlawful to collect a debt
pursuant to Title 1.6C (commencing with Section 1788).
(b) All of the following apply to any communication by a lessor
with any person other than the consumer for the purpose of acquiring
information about the location of a consumer or of any rental
property:
(1) The lessor shall identify itself and state that the lessor is
confirming or correcting location information concerning the
consumer.
(2) The lessor shall not communicate with any person more than
once unless requested to do so by the person or unless the lessor
reasonably believes that the earlier response is erroneous or
incomplete and that the person now has correct or complete location
information.
(3) The lessor shall not communicate by postcard.
(4) The lessor shall not use any language or symbol on any
envelope or in the contents of any communication that indicates that
the communication relates to the collection of any payment or the
recovery or repossession of rental property.
(5) The lessor shall not communicate with any person other than
the consumer's attorney, after the lessor knows the consumer is
represented by an attorney with regard to the rental-purchase
agreement and has knowledge of, or can readily ascertain, the
attorney's name and address, unless the attorney fails to respond
within a reasonable period of time to communication from the lessor
or unless the attorney consents to direct communication with the
consumer.
(c) Without the prior consent of the consumer given directly to
the lessor or the express permission of a court of competent
jurisdiction, a lessor shall not communicate with a consumer in
connection with the collection of any payment or the recovery or
repossession of rental property at any of the following:
(1) The consumer's place of employment.
(2) Any unusual time or place or a time or place known or that
should be known to be inconvenient to the consumer. In the absence of
knowledge of circumstances to the contrary, a lessor shall assume
that the convenient time for communicating with a consumer is after 8
a.m. and before 9 p.m., local time at the consumer's location.
(d) A lessor shall not communicate, in connection with the
rental-purchase agreement, with any person other than the consumer,
the consumer's attorney, or the lessor's attorney, except to the
extent the communication is any of the following:
(1) Reasonably necessary to acquire location information
concerning the consumer or the rental property, as provided in
subdivision (b).
(2) Upon the prior consent of the consumer given directly to the
lessor.
(3) Upon the express permission of a court of competent
jurisdiction.
(4) Reasonably necessary to effectuate a postjudgment judicial
remedy.
(e) If a consumer notifies the lessor in writing that the consumer
wishes the lessor to cease further communication with the consumer,
the lessor shall not communicate further with the consumer with
respect to the rental-purchase agreement, except for any of the
following:
(1) To advise the consumer that the lessor's further efforts are
being terminated.
(2) To notify the consumer that the lessor may invoke specified
remedies allowable by law which are ordinarily invoked by the lessor.
(3) Where necessary to effectuate any postjudgment remedy.
(f) A lessor shall not harass, oppress, or abuse any person in
connection with a rental-purchase agreement, including engaging in
any of the following conduct:
(1) Using or threatening the use of violence or any criminal means
to harm the physical person, reputation, or property of any person.
(2) Using obscene, profane, or abusive language.
(3) Causing a telephone to ring, or engaging any person in
telephone conversation repeatedly or continuously with intent to
annoy, abuse, or harass any person.
(4) Placing telephone calls without disclosure of the caller's
identity.
1812.639. A lessor shall not engage in any unfair, unlawful, or
deceptive conduct or make any untrue or misleading statement in
connection with a rental-purchase agreement, including any violation
of this title.
1812.640. A lessor shall not report any late payment, default, or
repossession to a consumer credit reporting agency, as defined in
subdivision (d) of Section 1785.3, or to an investigative consumer
reporting agency, as defined in subdivision (d) of Section 1786.2 if
the lessor (a) advertises "no credit check" or otherwise states or
implies that no inquiry will be made of a consumer's credit history
or creditworthiness or (b) does not obtain a consumer credit report
or investigative consumer report on a consumer before entering into a
rental-purchase agreement with that consumer.
1812.641. (a) A lessor shall not send any solicitation or other
promotional material to a person identified by the consumer as a
reference to verify the consumer's income, assets, credit history, or
residence unless all of the following occur:
(1) The lessor clearly discloses in the rental-purchase agreement
or application that (A) the lessor may send solicitations or other
promotional material to references provided by the consumer unless
the consumer objects and (B) the consumer has the right to object
without incurring any additional rental charge or fee or any loss of
contractual rights.
(2) A space on the rental-purchase agreement or application
adjacent to the disclosure described in paragraph (1) is provided for
the consumer to indicate the consumer's approval or disapproval of
the lessor's sending solicitations or other promotional material.
(3) The consumer affirmatively indicates approval.
(4) The lessor does not vary any term required to be disclosed
pursuant to Section 1812.623 depending on whether the consumer
approves or disapproves of the lessor's sending of solicitations or
other promotional material to references.
(b) The first solicitation or other promotional material directed
to a person whom the consumer has identified as a reference shall
clearly offer the reference the opportunity, without cost, to
instruct the lessor to refrain from sending further solicitations or
other promotional material to the reference. If so instructed, the
lessor shall not send any further solicitations or other promotional
material to the reference and shall remove the reference's name and
address from the lessor's mailing list.
(c) This section shall not apply to solicitations or other
promotional material sent generally to people solely on the basis of
demographic, geographic, or postal zip code criteria and without
regard to whether the people have been identified as references by
consumers.
1812.642. A lessor shall not discriminate against a prospective
consumer on any ground that would be a prohibited basis for a
creditor to discriminate against an applicant for credit as provided
in the Equal Credit Opportunity Act (15 U.S.C. Sec. 1691 et seq.) and
Regulation B (12 C.F.R. Part 202) as if they applied to a
rental-purchase agreement. Nothing in this section shall be construed
in any manner to mean that a rental-purchase agreement is a credit
transaction.
1812.643. (a) Except as provided in subdivision (b), a lessor who
obtains the signature of more than one person on a rental-purchase
agreement shall deliver the notice set forth in subdivision (c) to
each person before that person signs the agreement.
(b) This section does not apply if the persons signing the
agreement are married to each other or in fact receive possession of
the property described in the agreement.
(c) The notice required by this section is as follows:
"NOTICE TO COSIGNER
If you sign this contract, you will have the same responsibility
for the property and the same obligation to make payments that every
renter has.
If any renter does not pay, you may have to pay the full amount
owed, including late fees, and you may have to pay for certain loss
or damage to the property.
The lessor may collect from you without first trying to collect
from any other renter. The lessor can use the same collection methods
against you that can be used against any renter, such as suing you
or garnishing your wages.
This notice is not the contract that makes you responsible.
Before you sign, be sure you can afford to pay if you have to, and
that you want to accept this responsibility."
(d) The notice required by subdivision (c) shall be printed in at
least 10-point boldface type in English and Spanish. If the
rental-purchase agreement is required to be written in a language
other than English or Spanish, the notice shall be written in English
and, in addition or in lieu of Spanish, in that other language.
(e) If the notice set forth in subdivision (c) is included with
the text of the rental-purchase agreement, the notice shall appear
immediately above or adjacent to the disclosures required by
subdivision (b) of Section 1812.623. If the notice is not included
with the text of the agreement, the notice shall be on a separate
sheet which shall not contain any other text except as is necessary
to identify the lessor and agreement to which the notice refers and
to provide for the date and the person's acknowledgment of receipt.
(f) The lessor shall give each person entitled to notice under
this section a copy of the completed rental-purchase agreement before
obtaining that person's signature.
(g) If a person entitled to receive notice and a copy of the
rental-purchase agreement under this section does not receive the
notice or agreement in the manner required, that person has no
liability in connection with the rental-purchase transaction.
1812.644. (a) A lessor shall maintain records that establish the
lessor's cost, as defined in subdivision (k) of Section 1812.622, for
each item of personal property that is the subject of the
rental-purchase agreement. A copy of each rental-purchase agreement
and of the records required by this subdivision shall be maintained
for two years following the termination of the agreement.
(b) The maximum cash price for the lessor's first rental of the
property that is the subject of the rental-purchase agreement may not
exceed 1.65 times the lessor's cost for computer systems and
appliances, 1.7 times the lessor's cost for electronic sets, 1.9
times the lessor's cost for automotive accessories, furniture,
jewelry, and musical instruments, and 1.65 times the lessor's cost
for all other items.
(c) The maximum total of payments may not exceed 2.25 times the
maximum cash price that could have been charged for the first rental
of the property under subdivision (b).
(d) The maximum total of payments for the lessor's second and
subsequent rental of the property that is the subject of the
rental-purchase agreement may not exceed the maximum total of
payments permitted under subdivision (c) for the first rental of that
property less (1) for appliances and electronic sets, one-third the
amount of all rental payments paid to the lessor by consumers who
previously rented that property or (2) for furniture, computer
systems, and all other items, one-half the amount of all rental
payments paid to the lessor by consumers who previously rented that
property.
(e) The maximum cash price for property on its second or
subsequent rental may not exceed the maximum total of payments for
that property as permitted under subdivision (d) divided by 2.25.
(f) Upon the written request of the Attorney General, any district
attorney or city attorney, or the Director of the Department of
Consumer Affairs, a lessor shall provide copies of the records
described in this section.
(g) If a lessor willfully discloses a cash price or a total of
payments that exceeds the amount permitted by this section, the
rental-purchase agreement is void, the consumer shall retain the
property without any obligation, and the lessor shall refund to the
consumer all amounts paid.
1812.645. An action on a rental-purchase agreement shall be tried
in the county in which the rental-purchase agreement was signed or
the consumer resides at the time the action is commenced.
1812.646. Any waiver or modification of the provisions of this
title by the consumer or lessor shall be void and unenforceable as
contrary to public policy.
1812.647. Any person who willfully violates any provision of this
title is guilty of a misdemeanor.
1812.648. The rights, remedies, and penalties established by this
title are cumulative to the rights, remedies, or penalties
established under other laws.
1812.649. If any provision of this title or the application thereof
to any person or circumstances is held invalid, that invalidity
shall not affect other provisions or applications of the title that
can be given effect without the invalid provision or application, and
to this end the provisions of this title are severable.
1812.620. This title shall be known and may be cited as the
Karnette Rental-Purchase Act.
1812.621. The Legislature hereby finds and declares that consumers
enter into rental-purchase contracts that do not adequately disclose
the actual terms and cost of the transaction or the consumer's
liability for certain breaches of the contract, and that contain
unfair provisions, including unfair terms related to fees and
charges, the exercise or the termination of purchase option rights,
property loss and damage, and the repair or replacement of improperly
functioning rental property.
It is, therefore, the intent of the Legislature in enacting this
title to ensure that consumers are protected from misrepresentations
and unfair dealings by ensuring that consumers are adequately
informed of all relevant terms, including the cash price, periodic
payments, total purchase price, and other applicable charges or fees,
before they enter into rental-purchase contracts.
It is further the intent of the Legislature to (a) prohibit unfair
or unconscionable conduct toward consumers in connection with
rental-purchase transactions, (b) prohibit unfair contract terms,
including unreasonable charges, (c) prevent the forfeiture of
contract rights by consumers, (d) provide a right of reinstatement
and a reasonable formula for the exercise of purchase option rights
under a rental-purchase contract, (e) provide reasonable requirements
for the servicing, repair, and replacement of improperly functioning
rental property, and (f) cover rental-purchase transactions under
existing laws, including laws governing debt collection, cosigners,
home solicitation contracts, and warranties. This title shall be
liberally construed to achieve its remedial objectives.
1812.622. As used in this title:
(a) "Advertisement" means a commercial message in any medium that
directly or indirectly solicits or promotes one or more specific
rental-purchase transactions, excluding instore merchandising aids.
This definition does not limit or alter the application of other
laws, including Chapter 5 (commencing with Section 17200) of Part 2
and Chapter 1 (commencing with Section 17500) of Part 3, of Division
7 of the Business and Professions Code, to rental-purchase
transactions.
(b) "Consumer" means a natural person or persons who rent or lease
personal property from a lessor pursuant to a rental-purchase
agreement or to whom a lessor offers personal property for use
pursuant to a rental-purchase agreement.
(c) "Lessor" means any person or entity that provides or offers to
provide personal property for use by consumers pursuant to a
rental-purchase agreement.
(d) "Rental-purchase agreement," except as otherwise provided in
this subdivision, means an agreement between a lessor and a consumer
pursuant to which the lessor rents or leases, for valuable
consideration, personal property for use by a consumer for personal,
family, or household purposes for an initial term not exceeding four
months that may be renewed or otherwise extended, if under the terms
of the agreement the consumer acquires an option or other legally
enforceable right to become owner of the property. A rental-purchase
agreement is a lease subject to Title 1.5 (commencing with Section
1750) and Title 1.7 (commencing with Section 1790).
"Rental-purchase agreement" shall not be construed to be, nor be
governed by, and shall not apply to, any of the following:
(1) A retail installment sale, as defined in Section 1802.5.
(2) A retail installment contract, as defined in Section 1802.6.
(3) A retail installment account, as defined in Section 1802.7.
(4) A lease or agreement that constitutes a security interest, as
defined in Section 1201 of the Commercial Code.
(5) A consumer credit contract, as defined in Section 1799.90.
(e) "Cash price" means the price of the personal property
described in the rental-purchase agreement that the consumer may pay
in cash to the lessor at the inception of the rental-purchase
agreement to acquire ownership of that personal property.
(f) "Cost of rental" means the difference between the total of all
periodic payments necessary to acquire ownership under the
rental-purchase agreement and the cash price of the rental property
that is subject to the rental-purchase agreement.
(g) "Fee" means any payment, charge, fee, cost, or expense,
however denominated, other than a rental payment.
(h) "Appliance" means and includes any refrigerator, freezer,
range including any cooktop or oven, microwave oven, washer, dryer,
dishwasher, or room air conditioner or air purifier.
(i) "Electronic set" means and includes any television, radio,
camera, video game, or any type of device for the recording, storage,
copying, printing, transmission, display, or playback of any sound
or image, but does not include any item that is part of a computer
system.
(j) "Computer system" means a computer processor and a video
monitor, printer, and peripheral items primarily designed for use
with a computer. Audio and video devices, which are commonly used for
entertainment and into which data may be downloaded from a computer,
are not part of a computer system.
(k) "Lessor's cost" means the documented actual cost, including
actual freight charges, of the rental property to the lessor from a
wholesaler, distributor, supplier, or manufacturer and net of any
discounts, rebates, and incentives.
(l) "Total of payments" means the total amount of periodic
payments necessary to acquire ownership of the property that is the
subject of the rental-purchase agreement if the consumer makes all
regularly scheduled payments.
1812.623. (a) Every rental-purchase agreement shall be contained in
a single document which shall set forth all of the agreements of the
lessor and the consumer with respect to the rights and obligations
of each party. Every rental-purchase agreement shall be written in at
least 10-point type in the same language as principally used in any
oral sales presentation or negotiations leading to the execution of
the agreement, and shall clearly and conspicuously disclose all of
the following:
(1) The names of the lessor and the consumer, the lessor's
business address and telephone number, the consumer's address, the
date on which the agreement is executed, and a description of the
property sufficient to identify it.
(2) Whether the property subject to the rental-purchase agreement
is new or used. If the property is new, the lessor shall disclose the
model year or, if the model year is not known by the lessor, the
date of the lessor's acquisition of the property. If the property is
used, the age or the model year shall be disclosed if known by the
lessor.
(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 property if the renter
makes all regularly scheduled periodic payments.
(5) The cash price of the property subject to the rental purchase
agreement.
(6) The cost of rental.
(7) The amount and purpose of any other payment or fee permitted
by this title in addition to those specified pursuant to paragraphs
(3) and (4), including any late payment fee.
(8) A statement that the total number and dollar amount of
payments necessary to acquire ownership of the rental property
disclosed under paragraph (4) does not include other fees permitted
by this title, 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
rental property and, if so, the maximum amount for which the consumer
may be liable as provided in subdivision (a) of Section 1812.627.
(10) The following notice:
NOTICE
You are renting this property. 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 property if you do not make
required payments or do not use the early purchase option. If you
miss a payment, the lessor can repossess the property, but, you may
have the right to the return of the same or similar property.
See the contract for an explanation of your rights.
(11) A description of the consumer's right to acquire ownership of
the property before the end of the rental period as provided in
subdivisions (a) and (b) of Section 1812.632.
(12) A description of the consumer's reinstatement rights as
provided in Section 1812.631.
(13) If warranty coverage is transferable to a consumer who
acquires ownership of the property, a statement that the unexpired
portion of all warranties provided by the manufacturer, distributor,
or seller of the property that is the subject of the rental-purchase
agreement will be transferred by the lessor to the consumer at the
time the consumer acquires ownership of the property from the lessor.
(14) A description of the lessor's obligation to maintain the
rental property and to repair or replace rental property that is not
operating properly, as provided in Section 1812.633.
(b) (1) The disclosures required by paragraphs (3), (4), (5), and
(6) of subdivision (a) shall be printed in at least 10-point boldface
type or capital letters if typed and shall be grouped together in a
box formed by a heavy line in the following form:
COST OF RENTAL CASH PRICE
$ $
Amount over Property available
cash at
price you will this
TOTAL OF pay price for cash
PAYMENTS if from
$ you make all the lessor. See
You must pay regular about your
this amount payments. early purchase
to option rights.
own the
property if
you make
all
the regular
payments.
You can
buy
the
property
for
less
under
the AMOUNT
early OF
purchase EACH PAYMENT
option. $ NUMBER
per OF RENTAL
PAYMENTS PERIOD
________________
(insert period)
(2) The box described in paragraph (1) shall appear immediately
above the space reserved for the buyer's signature.
(c) The disclosures required by paragraphs (3), (4), (5), and (6)
of subdivision (a) shall be grouped together in a box formed by a
heavy line in the form prescribed in subdivision (b) and shall be
clearly and conspicuously placed on a tag or sticker affixed to the
property available for rental-purchase. If the property available for
rental-purchase is not displayed at the lessor'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 property or catalog
shown to consumers or shall be given to consumers. The disclosure
required by paragraph (2) of subdivision (a) also shall be clearly
and conspicuously placed on the tag or sticker.
(d) All disclosures required by this section shall be printed or
typed in a color or shade that clearly contrasts with the background.
1812.624. (a) No rental-purchase agreement or any document that the
lessor requests the consumer to sign shall contain any provision by
which:
(1) A power of attorney is given to confess judgment in this state
or to appoint the lessor, its agents, or its successors in interest
as the consumer's agent in the collection of payments or the
repossession of the rental property.
(2) The consumer authorizes the lessor or its agent to commit any
breach of the peace in repossessing the rental property or to enter
the consumer's dwelling or other premises without obtaining the
consumer's consent at the time of entry.
(3) The consumer agrees to purchase from the lessor insurance or a
liability waiver against loss or damage to the rental property.
(4) The consumer waives or agrees to waive any defense,
counterclaim, or right the consumer may have against the lessor, its
agent, or its successor in interest.
(5) The consumer is required to pay any fee in connection with
reinstatement except as provided in Section 1812.631.
(6) The consumer is required to pay a fee in connection with the
pickup of the property or the termination or rescission of the
rental-purchase agreement.
(7) The consumer is required to pay any fee permitted by the
rental-purchase agreement and this title that is not reasonable and
actually incurred by the lessor. The lessor has the burden of proof
to establish that a fee was reasonable and was an actual cost
incurred by the lessor.
(8) The consumer is required to pay a downpayment, more than one
advance periodic rental payment, or any other payment except a
security deposit permitted under Section 1812.625.
(9) Except to the extent permitted by subdivision (b) of Section
1812.627, the consumer waives any rights under Sections 1928 or 1929.
(10) The consumer grants a security interest in any property.
(11) The consumer's liability for loss or damage to the property
which is the subject of the rental-purchase agreement may exceed the
maximum described in subdivision (a) of Section 1812.627.
(12) Except under the circumstances authorized by subdivision (a)
or (b) of Section 1812.632, the consumer is obligated to make any
balloon payment. A "balloon payment" is any payment for the purchase
or use of the rental property which is more than the regularly
scheduled periodic payment amount.
(13) The consumer is required to pay a late payment fee that is
not permitted under Section 1812.626.
(14) The consumer is required to pay both a late payment fee and a
fee for the lessor's collection of a past due payment at the
consumer's home or other location.
(15) The consumer waives or offers to waive any right or remedy
against the lessor, its agents, or its successors in interest for any
violation of this title or any other illegal act. This subdivision
does not apply to a document executed in connection with the bona
fide settlement, compromise, or release of a specific disputed claim.
(16) The lessor, its agents, or its successors in interest may
commence any judicial action against the consumer in a county other
than the county in which (A) the rental-purchase agreement was signed
or (B) the consumer resides at the time the action is commenced.
(17) The amount stated as the cash price for any item of personal
property exceeds the cash price permitted under Section 1812.644.
(18) The total of payments exceeds the amount permitted under
Section 1812.644.
(b) Any provision in a rental-purchase agreement that is
prohibited by this title shall be void and unenforceable and a
violation of this title. A rental-purchase agreement which contains
any provision that is prohibited by this title is voidable by the
consumer.
1812.625. (a) The lessor may require the consumer to pay a security
deposit, however denominated, in an amount not to exceed the
equivalent of one month's rental only for the purpose of satisfying
any lawful claim by the lessor, up to the maximum described in
subdivision (a) of Section 1812.627, for those amounts reasonably
necessary to pay for the loss of the property or the repair of
damage, exclusive of reasonable wear and tear.
(b) Within two weeks after the lessor has taken possession of the
property from the consumer, the lessor shall deliver to the consumer
the amount of the security deposit less the amount, if any, deducted
for loss or repair as permitted by this title. If any amount is
deducted, the lessor shall also deliver to the consumer at that time
a copy of an itemized statement indicating the amount of the security
deposit, the amount deducted for loss or repair, and a detailed
statement of the basis for the deduction. Delivery may be made by
personal delivery or by first-class mail, postage prepaid.
1812.626. (a) The lessor may assess a late payment fee if the late
payment fee is specified in the rental-purchase agreement and is
permitted by this section.
(b) No fee shall be assessed for a payment which is less than
three days late if the rental-purchase agreement specifies weekly
periodic payments.
(c) No fee shall be assessed for a payment which is less than 7
days late if the rental-purchase agreement specifies longer than
weekly periodic payments.
(d) The lessor may assess more than one late fee for a particular
late payment if the total of all fees assessed for that late payment
does not exceed the maximum provided in subdivision (e). If the
maximum total late payment fee has been imposed for a particular
payment, no additional late payment fee may be imposed for that
payment.
(e) The total of all fees for a late payment shall not exceed the
lesser of 5 percent of the payment or five dollars ($5), except that
a minimum total fee of two dollars ($2) may be required.
1812.627. (a) The consumer's liability for loss or damage to the
property which is the subject of the rental-purchase agreement shall
in no event exceed the lesser of (1) the fair market value at the
time of the loss or damage or (2) the amount that would be necessary
for the renter to exercise the purchase option provided in
subdivision (a) of Section 1812.632.
(b) A lessor and a consumer may agree that the consumer may be
liable for loss only up to the maximum amount described in
subdivision (a) and only for one of the following:
(1) Loss caused by the consumer's negligent, reckless, or
intentional acts.
(2) Loss caused by the theft of the property subject to the
rental-purchase agreement unless one of the following is applicable:
(A) There is evidence of a burglary of the premises in which the
property is located, such as physical evidence or an official report
filed by the consumer with the police or other law enforcement
agency.
(B) The consumer establishes by the preponderance of the evidence
that the consumer has not committed or aided or abetted in the
commission of the theft of the property.
1812.628. (a) In addition to the circumstances described in
subdivision (a) of Section 1689.5, a rental-purchase agreement
regardless of the amount involved shall be deemed a home solicitation
contract or offer if the rental-purchase agreement has an initial
term that exceeds one week and was made at other than appropriate
trade premises, as defined in subdivision (b) of Section 1689.5.
(b) In addition to any other right of cancellation, a consumer has
the right to cancel a rental-purchase agreement, without penalty or
obligation if the consumer has not taken possession of the property.
1812.629. (a) Upon the request of the consumer, the lessor shall
provide the information as required by subdivision (b) of Section
1812.623 in an exemplar of the rental-purchase agreement covering the
property specified by the consumer and shall provide the consumer
with a copy of the proposed rental-purchase agreement prior to its
execution. The consumer may take this copy from the lessor's
premises.
(b) The lessor shall not obtain the consumer's signature to a
rental-purchase agreement if it contains blank spaces to be filled in
after it has been signed.
(c) A copy of the fully completed rental-purchase agreement and
all other documents which the lessor requests the consumer to sign
shall be given to the consumer at the time they are signed. The
rental-purchase agreement shall not be enforceable against the
consumer until the consumer has received a signed copy.
(d) The lessor shall deliver to the consumer a written receipt for
each payment made by the consumer.
1812.630. (a) (1) Any advertisement of a rental-purchase agreement
that states the amount of any payment shall clearly and conspicuously
disclose all of the following in the same language used in the
advertisement:
(A) That the agreement advertised is a rental-purchase agreement.
(B) That the property is used if that is the case.
(C) That ownership is not acquired until all of the payments
necessary to acquire ownership have been made.
(D) The total amount and number of periodic payments necessary to
acquire ownership.
(2) If more than one item is advertised in one print
advertisement, the lessor may comply with paragraph (1) by clearly
and conspicuously including in the advertisement a table or schedule
sufficient in detail to permit determination of the total amount and
number of periodic payments necessary to acquire ownership of the
items advertised having the highest and lowest total amount of
periodic payments necessary to acquire ownership.
(b) A lessor who advertises "no credit check" or otherwise states
or implies that no inquiry will be made of a consumer's credit
history or creditworthiness shall not (1) make any inquiry or request
a consumer to complete any document concerning the consumer's assets
or credit history, (2) obtain a consumer credit report as defined in
subdivision (c) of Section 1785.3, or (3) obtain an investigative
consumer report as defined in subdivision (c) of Section 1786.2.
1812.631. (a) A consumer may be deemed in default under the
rental-purchase agreement if either of the following applies:
(1) The rental-purchase agreement requires weekly periodic rental
payments and the consumer has not made a payment by the end of the
seventh day after its due date.
(2) The rental-purchase agreement requires rental payments in
periodic intervals longer than one week and the consumer has not made
a payment by the end of the 10th day after its due date.
(b) A consumer who is in default under a rental-purchase agreement
requiring weekly periodic rental payments may reinstate the
rental-purchase agreement, without losing any rights or options under
that agreement, by paying all past due payments, including late
payment fees, by the end of the seventh day after the due date of the
payment in default if the consumer retains possession of the
property and within one year after the due date of the payment in
default if the consumer returns or tenders the property to the
lessor, unless the lessor permits the consumer to retain the property
during this period.
(c) A consumer who is in default under a rental-purchase agreement
requiring rental payments in periodic intervals longer than one week
may reinstate the rental-purchase agreement, without losing any
rights or options under that agreement, by paying all past due
payments, including late payment fees, by the end of the 10th day
after the due date of the payment in default if the consumer retains
possession of the property and within one year after the due date of
the payment in default if the consumer returns or tenders the
property to the lessor, unless the lessor permits the consumer to
retain the property during this period.
(d) Upon reinstatement, the lessor shall provide the consumer with
the same rental property, if available, or substitute property of
the same brand, if available, and comparable quality, age, condition,
and warranty coverage. If substitute property is provided, the
lessor shall provide the lessee with the disclosures required in
paragraph (2) of subdivision (a) of Section 1812.623.
(e) (1) Except as provided in paragraph (2), a lessor shall not
deny a consumer the right of reinstatement provided in this section.
(2) This section does not apply to a consumer who has (A) stolen
or unlawfully disposed of the property, (B) damaged the property as
the result of the consumer's intentional, willful, wanton, or
reckless conduct, or (C) defaulted in making payments as described in
subdivision (a) on three consecutive occasions.
(3) If the lessor denies a consumer the right to reinstate
pursuant to paragraph (2), the lessor has the burden of proof to
establish that the denial was in good faith and was permitted under
paragraph (2).
(f) Nothing in this subdivision prohibits the lessor from
contacting the consumer provided that the lessor does not violate
Section 1812.638.
1812.632. (a) (1) The consumer has the right to acquire ownership
of the property within three months of the date on which the consumer
executed the rental-purchase agreement by tendering to the lessor an
amount equal to the cash price and any past due fees less all
periodic payments that the consumer has paid.
(2) Within 10 days after the consumer executes the rental purchase
agreement, the lessor shall personally deliver or send by
first-class mail to the consumer a notice informing the consumer of
the right described in paragraph (1), including the amount the
consumer must pay to acquire ownership and the date by which payment
must be made. The statement shall not be accompanied by any other
written information including solicitations for other rental-purchase
agreements.
(b) After the expiration of the three-month period following the
execution of the rental-purchase agreement, the consumer has the
right to acquire ownership of the property at any time by tendering
to the lessor all past due payments and fees and an amount equal to
the cash price stated in the rental-purchase agreement multiplied by
a fraction that has as its numerator the number of periodic payments
remaining under the agreement and that has as its denominator the
total number of periodic payments.
(c) (1) The lessor shall, in connection with a consumer's rights
under subdivision (b), provide the consumer with a written statement
in the manner set forth in paragraph (2) below that clearly states
(A) the total amount the consumer would have to pay to acquire
ownership of the rental property if the consumer makes all regularly
scheduled payments remaining under the rental-purchase agreement and
(B) the total amount the consumer would have to pay to acquire
ownership of that property pursuant to subdivision (a).
(2) The statement required by paragraph (1) shall be personally
delivered or sent by first-class mail to the consumer within seven
days after (A) the date the consumer requests information about the
amount required to purchase the rental property and (B) the date the
consumer has made one-half of the total number of periodic payments
required to acquire ownership of the rental property. The statement
shall not be accompanied by any other written information including
solicitations for other rental-purchase agreements.
(d) (1) Subject to paragraph (2), if any consumer who has signed
the rental-purchase agreement has experienced an interruption or
reduction of 25 percent or more of income due to involuntary job
loss, involuntary reduced employment, illness, pregnancy, or
disability after one-half or more of the total amount of the periodic
payments necessary to acquire ownership under the agreement has been
paid, the lessor shall reduce the amount of each periodic rental
payment by (A) the percentage of the reduction in the consumer's
income or (B) 50 percent, whichever is less, for the period during
which the consumer's income is interrupted or reduced. If payments
are reduced, the total dollar amount of payments necessary to acquire
ownership shall not be increased, and the rights and duties of the
lessor and the consumer shall not otherwise be affected. When the
consumer's income is restored, the lessor may increase the amount of
rental payments, but in no event shall rental payments exceed the
originally scheduled amount of rental payments.
(2) Paragraph (1) applies only after the consumer provides to the
lessor some evidence of the amount and cause of the interruption or
reduction of income.
1812.633. (a) The lessor shall maintain the property subject to the
rental-purchase agreement in good working order while the agreement
is in effect without charging any fee to the consumer in addition to
the regularly scheduled rental payments set forth in the
rental-purchase agreement.
(b) By the end of the second business day following the day on
which the lessor received notice from the consumer that the property
is not operating properly, the lessor shall repair or replace the
property without any fee to the consumer in addition to the regularly
scheduled rental payments set forth in the rental-purchase
agreement.
(c) If a repair or replacement cannot be immediately effected, the
lessor shall temporarily substitute property of comparable quality
and condition while repairs are being effected. If repairs cannot be
completed to the reasonable satisfaction of the consumer within 30
days after the lessor receives notice from the consumer or within a
longer period voluntarily agreed to by the consumer, the lessor shall
permanently replace the property.
(d) All replacement property shall be the same brand, if
available, and comparable in quality, age, condition, and warranty
coverage to the replaced property. If the same brand is not
available, the brand of the replacement property shall be agreeable
to the consumer.
(e) All of the consumer's and lessor's rights and obligations
under the rental-purchase agreement and this title that applied to
the property originally subject to the rental-purchase agreement
shall apply to any replacement property.
(f) The consumer shall not be charged, or held liable for, any
rental fee for any period of time during which the property that is
the subject of the rental-purchase agreement or any property
substituted for it pursuant to this section is not in good working
order.
(g) This section does not apply to the repair of damage resulting
from the consumer's intentional, willful, wanton, reckless, or
negligent conduct. If the lessor does not comply with this section
because of this subdivision, the lessor has the burden of proof to
establish that noncompliance was justified and in good faith.
(h) A lessor shall not deliver to a consumer any property which
the lessor knows or has reason to know is defective.
1812.634. When the lessor transfers ownership of the rental
property, the lessor shall also transfer to the consumer the
unexpired portion of any transferable warranties provided by the
manufacturer, distributor, or seller of the rental property, and
these warranties shall apply as if the consumer were the original
purchaser of the goods.
1812.635. (a) A lessor shall not sell, or offer for sale, a service
contract for the rental property if that service contract provides
any coverage while the rental-purchase agreement is in effect.
(b) A lessor may sell, or offer for sale, a service contract
providing coverage for the rental property after the consumer
acquires ownership of that property, if both of the following
conditions are satisfied:
(1) The lessor does not sell, or offer to sell, the service
contract before (A) the consumer pays at least one-half of the total
number of periodic payments necessary to acquire ownership of the
property or (B) the consumer acquires ownership of the property, as
provided in Section 1812.632, whichever occurs first.
(2) The lessor clearly and conspicuously indicates to the consumer
in writing before the consumer's purchase of the service contract
that the purchase is optional.
(c) If the consumer chooses to purchase a service contract before
the expiration of the rental-purchase agreement and defaults or
otherwise does not make all payments necessary to acquire ownership
within the rental period specified in the agreement, the lessor shall
refund all consideration paid for the service contract to the
consumer within two weeks after the lessor has received the consumer'
s last rental payment. This subdivision does not limit or alter any
of the consumer's cancellation or refund rights under the service
contract or under other provisions of law.
(d) "Service contract" has the meaning set forth in subdivision
(o) of Section 1791.
1812.636. (a) A consumer damaged by a violation of this title by a
lessor is entitled to recover all of the following:
(1) Actual damages.
(2) Twenty-five percent of an amount equal to the total amount of
payments required to obtain ownership if all payments were made under
the rental-purchase agreement, but not less than one hundred dollars
($100) nor more than one thousand dollars ($1,000).
(3) The consumer's reasonable attorney's fees and court costs.
(4) Exemplary damages, in the amount the court deems proper, for
intentional or willful violations of this title.
(5) Equitable relief as the court deems proper.
(b) Where more than one consumer is a party to a rental-purchase
agreement, the limitations of subdivision (a) shall apply to all
those consumers in the aggregate, and no more than one recovery shall
be permitted for each violation.
1812.637. (a) A lessor is not liable for a violation of this title
if, before the 30th calendar day after the date the lessor discovers
a bona fide error and before an action under this title is filed or
written notice of the error is received by the lessor from the
consumer, the lessor gives the consumer written notice of the error.
"Bona fide error," as used in this section, means a violation that
was not intentional and resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adapted to
avoid that error. Examples of a bona fide error include clerical
errors, calculation errors, errors due to unintentionally improper
computer programming or data entry, and printing errors, but does not
include an error of legal judgment with respect to a lessor's
obligations under this title.
(b) Notwithstanding subdivision (a), if the lessor notifies the
consumer of a bona fide error the correction of which would increase
the amount of any payment, the lessor may not collect the amount of
the increase, and the consumer may enforce the rental-purchase
agreement as initially written.
(c) Notwithstanding subdivision (a), if the lessor notifies the
consumer of a bona fide error the correction of which would lower the
amount of any payment, the lessor shall immediately refund to the
consumer the difference between what the consumer paid and what the
consumer should have paid if the agreement were correct at the
inception of the transaction.
1812.638. (a) A lessor shall not engage in any unfair, unlawful, or
deceptive conduct, or make any untrue or misleading statement in
connection with the collection of any payment owed by a consumer or
the repossession of any property or attempt to collect or collect any
payment in a manner that would be unlawful to collect a debt
pursuant to Title 1.6C (commencing with Section 1788).
(b) All of the following apply to any communication by a lessor
with any person other than the consumer for the purpose of acquiring
information about the location of a consumer or of any rental
property:
(1) The lessor shall identify itself and state that the lessor is
confirming or correcting location information concerning the
consumer.
(2) The lessor shall not communicate with any person more than
once unless requested to do so by the person or unless the lessor
reasonably believes that the earlier response is erroneous or
incomplete and that the person now has correct or complete location
information.
(3) The lessor shall not communicate by postcard.
(4) The lessor shall not use any language or symbol on any
envelope or in the contents of any communication that indicates that
the communication relates to the collection of any payment or the
recovery or repossession of rental property.
(5) The lessor shall not communicate with any person other than
the consumer's attorney, after the lessor knows the consumer is
represented by an attorney with regard to the rental-purchase
agreement and has knowledge of, or can readily ascertain, the
attorney's name and address, unless the attorney fails to respond
within a reasonable period of time to communication from the lessor
or unless the attorney consents to direct communication with the
consumer.
(c) Without the prior consent of the consumer given directly to
the lessor or the express permission of a court of competent
jurisdiction, a lessor shall not communicate with a consumer in
connection with the collection of any payment or the recovery or
repossession of rental property at any of the following:
(1) The consumer's place of employment.
(2) Any unusual time or place or a time or place known or that
should be known to be inconvenient to the consumer. In the absence of
knowledge of circumstances to the contrary, a lessor shall assume
that the convenient time for communicating with a consumer is after 8
a.m. and before 9 p.m., local time at the consumer's location.
(d) A lessor shall not communicate, in connection with the
rental-purchase agreement, with any person other than the consumer,
the consumer's attorney, or the lessor's attorney, except to the
extent the communication is any of the following:
(1) Reasonably necessary to acquire location information
concerning the consumer or the rental property, as provided in
subdivision (b).
(2) Upon the prior consent of the consumer given directly to the
lessor.
(3) Upon the express permission of a court of competent
jurisdiction.
(4) Reasonably necessary to effectuate a postjudgment judicial
remedy.
(e) If a consumer notifies the lessor in writing that the consumer
wishes the lessor to cease further communication with the consumer,
the lessor shall not communicate further with the consumer with
respect to the rental-purchase agreement, except for any of the
following:
(1) To advise the consumer that the lessor's further efforts are
being terminated.
(2) To notify the consumer that the lessor may invoke specified
remedies allowable by law which are ordinarily invoked by the lessor.
(3) Where necessary to effectuate any postjudgment remedy.
(f) A lessor shall not harass, oppress, or abuse any person in
connection with a rental-purchase agreement, including engaging in
any of the following conduct:
(1) Using or threatening the use of violence or any criminal means
to harm the physical person, reputation, or property of any person.
(2) Using obscene, profane, or abusive language.
(3) Causing a telephone to ring, or engaging any person in
telephone conversation repeatedly or continuously with intent to
annoy, abuse, or harass any person.
(4) Placing telephone calls without disclosure of the caller's
identity.
1812.639. A lessor shall not engage in any unfair, unlawful, or
deceptive conduct or make any untrue or misleading statement in
connection with a rental-purchase agreement, including any violation
of this title.
1812.640. A lessor shall not report any late payment, default, or
repossession to a consumer credit reporting agency, as defined in
subdivision (d) of Section 1785.3, or to an investigative consumer
reporting agency, as defined in subdivision (d) of Section 1786.2 if
the lessor (a) advertises "no credit check" or otherwise states or
implies that no inquiry will be made of a consumer's credit history
or creditworthiness or (b) does not obtain a consumer credit report
or investigative consumer report on a consumer before entering into a
rental-purchase agreement with that consumer.
1812.641. (a) A lessor shall not send any solicitation or other
promotional material to a person identified by the consumer as a
reference to verify the consumer's income, assets, credit history, or
residence unless all of the following occur:
(1) The lessor clearly discloses in the rental-purchase agreement
or application that (A) the lessor may send solicitations or other
promotional material to references provided by the consumer unless
the consumer objects and (B) the consumer has the right to object
without incurring any additional rental charge or fee or any loss of
contractual rights.
(2) A space on the rental-purchase agreement or application
adjacent to the disclosure described in paragraph (1) is provided for
the consumer to indicate the consumer's approval or disapproval of
the lessor's sending solicitations or other promotional material.
(3) The consumer affirmatively indicates approval.
(4) The lessor does not vary any term required to be disclosed
pursuant to Section 1812.623 depending on whether the consumer
approves or disapproves of the lessor's sending of solicitations or
other promotional material to references.
(b) The first solicitation or other promotional material directed
to a person whom the consumer has identified as a reference shall
clearly offer the reference the opportunity, without cost, to
instruct the lessor to refrain from sending further solicitations or
other promotional material to the reference. If so instructed, the
lessor shall not send any further solicitations or other promotional
material to the reference and shall remove the reference's name and
address from the lessor's mailing list.
(c) This section shall not apply to solicitations or other
promotional material sent generally to people solely on the basis of
demographic, geographic, or postal zip code criteria and without
regard to whether the people have been identified as references by
consumers.
1812.642. A lessor shall not discriminate against a prospective
consumer on any ground that would be a prohibited basis for a
creditor to discriminate against an applicant for credit as provided
in the Equal Credit Opportunity Act (15 U.S.C. Sec. 1691 et seq.) and
Regulation B (12 C.F.R. Part 202) as if they applied to a
rental-purchase agreement. Nothing in this section shall be construed
in any manner to mean that a rental-purchase agreement is a credit
transaction.
1812.643. (a) Except as provided in subdivision (b), a lessor who
obtains the signature of more than one person on a rental-purchase
agreement shall deliver the notice set forth in subdivision (c) to
each person before that person signs the agreement.
(b) This section does not apply if the persons signing the
agreement are married to each other or in fact receive possession of
the property described in the agreement.
(c) The notice required by this section is as follows:
"NOTICE TO COSIGNER
If you sign this contract, you will have the same responsibility
for the property and the same obligation to make payments that every
renter has.
If any renter does not pay, you may have to pay the full amount
owed, including late fees, and you may have to pay for certain loss
or damage to the property.
The lessor may collect from you without first trying to collect
from any other renter. The lessor can use the same collection methods
against you that can be used against any renter, such as suing you
or garnishing your wages.
This notice is not the contract that makes you responsible.
Before you sign, be sure you can afford to pay if you have to, and
that you want to accept this responsibility."
(d) The notice required by subdivision (c) shall be printed in at
least 10-point boldface type in English and Spanish. If the
rental-purchase agreement is required to be written in a language
other than English or Spanish, the notice shall be written in English
and, in addition or in lieu of Spanish, in that other language.
(e) If the notice set forth in subdivision (c) is included with
the text of the rental-purchase agreement, the notice shall appear
immediately above or adjacent to the disclosures required by
subdivision (b) of Section 1812.623. If the notice is not included
with the text of the agreement, the notice shall be on a separate
sheet which shall not contain any other text except as is necessary
to identify the lessor and agreement to which the notice refers and
to provide for the date and the person's acknowledgment of receipt.
(f) The lessor shall give each person entitled to notice under
this section a copy of the completed rental-purchase agreement before
obtaining that person's signature.
(g) If a person entitled to receive notice and a copy of the
rental-purchase agreement under this section does not receive the
notice or agreement in the manner required, that person has no
liability in connection with the rental-purchase transaction.
1812.644. (a) A lessor shall maintain records that establish the
lessor's cost, as defined in subdivision (k) of Section 1812.622, for
each item of personal property that is the subject of the
rental-purchase agreement. A copy of each rental-purchase agreement
and of the records required by this subdivision shall be maintained
for two years following the termination of the agreement.
(b) The maximum cash price for the lessor's first rental of the
property that is the subject of the rental-purchase agreement may not
exceed 1.65 times the lessor's cost for computer systems and
appliances, 1.7 times the lessor's cost for electronic sets, 1.9
times the lessor's cost for automotive accessories, furniture,
jewelry, and musical instruments, and 1.65 times the lessor's cost
for all other items.
(c) The maximum total of payments may not exceed 2.25 times the
maximum cash price that could have been charged for the first rental
of the property under subdivision (b).
(d) The maximum total of payments for the lessor's second and
subsequent rental of the property that is the subject of the
rental-purchase agreement may not exceed the maximum total of
payments permitted under subdivision (c) for the first rental of that
property less (1) for appliances and electronic sets, one-third the
amount of all rental payments paid to the lessor by consumers who
previously rented that property or (2) for furniture, computer
systems, and all other items, one-half the amount of all rental
payments paid to the lessor by consumers who previously rented that
property.
(e) The maximum cash price for property on its second or
subsequent rental may not exceed the maximum total of payments for
that property as permitted under subdivision (d) divided by 2.25.
(f) Upon the written request of the Attorney General, any district
attorney or city attorney, or the Director of the Department of
Consumer Affairs, a lessor shall provide copies of the records
described in this section.
(g) If a lessor willfully discloses a cash price or a total of
payments that exceeds the amount permitted by this section, the
rental-purchase agreement is void, the consumer shall retain the
property without any obligation, and the lessor shall refund to the
consumer all amounts paid.
1812.645. An action on a rental-purchase agreement shall be tried
in the county in which the rental-purchase agreement was signed or
the consumer resides at the time the action is commenced.
1812.646. Any waiver or modification of the provisions of this
title by the consumer or lessor shall be void and unenforceable as
contrary to public policy.
1812.647. Any person who willfully violates any provision of this
title is guilty of a misdemeanor.
1812.648. The rights, remedies, and penalties established by this
title are cumulative to the rights, remedies, or penalties
established under other laws.
1812.649. If any provision of this title or the application thereof
to any person or circumstances is held invalid, that invalidity
shall not affect other provisions or applications of the title that
can be given effect without the invalid provision or application, and
to this end the provisions of this title are severable.
1812.620. This title shall be known and may be cited as the
Karnette Rental-Purchase Act.
1812.621. The Legislature hereby finds and declares that consumers
enter into rental-purchase contracts that do not adequately disclose
the actual terms and cost of the transaction or the consumer's
liability for certain breaches of the contract, and that contain
unfair provisions, including unfair terms related to fees and
charges, the exercise or the termination of purchase option rights,
property loss and damage, and the repair or replacement of improperly
functioning rental property.
It is, therefore, the intent of the Legislature in enacting this
title to ensure that consumers are protected from misrepresentations
and unfair dealings by ensuring that consumers are adequately
informed of all relevant terms, including the cash price, periodic
payments, total purchase price, and other applicable charges or fees,
before they enter into rental-purchase contracts.
It is further the intent of the Legislature to (a) prohibit unfair
or unconscionable conduct toward consumers in connection with
rental-purchase transactions, (b) prohibit unfair contract terms,
including unreasonable charges, (c) prevent the forfeiture of
contract rights by consumers, (d) provide a right of reinstatement
and a reasonable formula for the exercise of purchase option rights
under a rental-purchase contract, (e) provide reasonable requirements
for the servicing, repair, and replacement of improperly functioning
rental property, and (f) cover rental-purchase transactions under
existing laws, including laws governing debt collection, cosigners,
home solicitation contracts, and warranties. This title shall be
liberally construed to achieve its remedial objectives.
1812.622. As used in this title:
(a) "Advertisement" means a commercial message in any medium that
directly or indirectly solicits or promotes one or more specific
rental-purchase transactions, excluding instore merchandising aids.
This definition does not limit or alter the application of other
laws, including Chapter 5 (commencing with Section 17200) of Part 2
and Chapter 1 (commencing with Section 17500) of Part 3, of Division
7 of the Business and Professions Code, to rental-purchase
transactions.
(b) "Consumer" means a natural person or persons who rent or lease
personal property from a lessor pursuant to a rental-purchase
agreement or to whom a lessor offers personal property for use
pursuant to a rental-purchase agreement.
(c) "Lessor" means any person or entity that provides or offers to
provide personal property for use by consumers pursuant to a
rental-purchase agreement.
(d) "Rental-purchase agreement," except as otherwise provided in
this subdivision, means an agreement between a lessor and a consumer
pursuant to which the lessor rents or leases, for valuable
consideration, personal property for use by a consumer for personal,
family, or household purposes for an initial term not exceeding four
months that may be renewed or otherwise extended, if under the terms
of the agreement the consumer acquires an option or other legally
enforceable right to become owner of the property. A rental-purchase
agreement is a lease subject to Title 1.5 (commencing with Section
1750) and Title 1.7 (commencing with Section 1790).
"Rental-purchase agreement" shall not be construed to be, nor be
governed by, and shall not apply to, any of the following:
(1) A retail installment sale, as defined in Section 1802.5.
(2) A retail installment contract, as defined in Section 1802.6.
(3) A retail installment account, as defined in Section 1802.7.
(4) A lease or agreement that constitutes a security interest, as
defined in Section 1201 of the Commercial Code.
(5) A consumer credit contract, as defined in Section 1799.90.
(e) "Cash price" means the price of the personal property
described in the rental-purchase agreement that the consumer may pay
in cash to the lessor at the inception of the rental-purchase
agreement to acquire ownership of that personal property.
(f) "Cost of rental" means the difference between the total of all
periodic payments necessary to acquire ownership under the
rental-purchase agreement and the cash price of the rental property
that is subject to the rental-purchase agreement.
(g) "Fee" means any payment, charge, fee, cost, or expense,
however denominated, other than a rental payment.
(h) "Appliance" means and includes any refrigerator, freezer,
range including any cooktop or oven, microwave oven, washer, dryer,
dishwasher, or room air conditioner or air purifier.
(i) "Electronic set" means and includes any television, radio,
camera, video game, or any type of device for the recording, storage,
copying, printing, transmission, display, or playback of any sound
or image, but does not include any item that is part of a computer
system.
(j) "Computer system" means a computer processor and a video
monitor, printer, and peripheral items primarily designed for use
with a computer. Audio and video devices, which are commonly used for
entertainment and into which data may be downloaded from a computer,
are not part of a computer system.
(k) "Lessor's cost" means the documented actual cost, including
actual freight charges, of the rental property to the lessor from a
wholesaler, distributor, supplier, or manufacturer and net of any
discounts, rebates, and incentives.
(l) "Total of payments" means the total amount of periodic
payments necessary to acquire ownership of the property that is the
subject of the rental-purchase agreement if the consumer makes all
regularly scheduled payments.
1812.623. (a) Every rental-purchase agreement shall be contained in
a single document which shall set forth all of the agreements of the
lessor and the consumer with respect to the rights and obligations
of each party. Every rental-purchase agreement shall be written in at
least 10-point type in the same language as principally used in any
oral sales presentation or negotiations leading to the execution of
the agreement, and shall clearly and conspicuously disclose all of
the following:
(1) The names of the lessor and the consumer, the lessor's
business address and telephone number, the consumer's address, the
date on which the agreement is executed, and a description of the
property sufficient to identify it.
(2) Whether the property subject to the rental-purchase agreement
is new or used. If the property is new, the lessor shall disclose the
model year or, if the model year is not known by the lessor, the
date of the lessor's acquisition of the property. If the property is
used, the age or the model year shall be disclosed if known by the
lessor.
(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 property if the renter
makes all regularly scheduled periodic payments.
(5) The cash price of the property subject to the rental purchase
agreement.
(6) The cost of rental.
(7) The amount and purpose of any other payment or fee permitted
by this title in addition to those specified pursuant to paragraphs
(3) and (4), including any late payment fee.
(8) A statement that the total number and dollar amount of
payments necessary to acquire ownership of the rental property
disclosed under paragraph (4) does not include other fees permitted
by this title, 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
rental property and, if so, the maximum amount for which the consumer
may be liable as provided in subdivision (a) of Section 1812.627.
(10) The following notice:
NOTICE
You are renting this property. 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 property if you do not make
required payments or do not use the early purchase option. If you
miss a payment, the lessor can repossess the property, but, you may
have the right to the return of the same or similar property.
See the contract for an explanation of your rights.
(11) A description of the consumer's right to acquire ownership of
the property before the end of the rental period as provided in
subdivisions (a) and (b) of Section 1812.632.
(12) A description of the consumer's reinstatement rights as
provided in Section 1812.631.
(13) If warranty coverage is transferable to a consumer who
acquires ownership of the property, a statement that the unexpired
portion of all warranties provided by the manufacturer, distributor,
or seller of the property that is the subject of the rental-purchase
agreement will be transferred by the lessor to the consumer at the
time the consumer acquires ownership of the property from the lessor.
(14) A description of the lessor's obligation to maintain the
rental property and to repair or replace rental property that is not
operating properly, as provided in Section 1812.633.
(b) (1) The disclosures required by paragraphs (3), (4), (5), and
(6) of subdivision (a) shall be printed in at least 10-point boldface
type or capital letters if typed and shall be grouped together in a
box formed by a heavy line in the following form:
COST OF RENTAL CASH PRICE
$ $
Amount over Property available
cash at
price you will this
TOTAL OF pay price for cash
PAYMENTS if from
$ you make all the lessor. See
You must pay regular about your
this amount payments. early purchase
to option rights.
own the
property if
you make
all
the regular
payments.
You can
buy
the
property
for
less
under
the AMOUNT
early OF
purchase EACH PAYMENT
option. $ NUMBER
per OF RENTAL
PAYMENTS PERIOD
________________
(insert period)
(2) The box described in paragraph (1) shall appear immediately
above the space reserved for the buyer's signature.
(c) The disclosures required by paragraphs (3), (4), (5), and (6)
of subdivision (a) shall be grouped together in a box formed by a
heavy line in the form prescribed in subdivision (b) and shall be
clearly and conspicuously placed on a tag or sticker affixed to the
property available for rental-purchase. If the property available for
rental-purchase is not displayed at the lessor'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 property or catalog
shown to consumers or shall be given to consumers. The disclosure
required by paragraph (2) of subdivision (a) also shall be clearly
and conspicuously placed on the tag or sticker.
(d) All disclosures required by this section shall be printed or
typed in a color or shade that clearly contrasts with the background.
1812.624. (a) No rental-purchase agreement or any document that the
lessor requests the consumer to sign shall contain any provision by
which:
(1) A power of attorney is given to confess judgment in this state
or to appoint the lessor, its agents, or its successors in interest
as the consumer's agent in the collection of payments or the
repossession of the rental property.
(2) The consumer authorizes the lessor or its agent to commit any
breach of the peace in repossessing the rental property or to enter
the consumer's dwelling or other premises without obtaining the
consumer's consent at the time of entry.
(3) The consumer agrees to purchase from the lessor insurance or a
liability waiver against loss or damage to the rental property.
(4) The consumer waives or agrees to waive any defense,
counterclaim, or right the consumer may have against the lessor, its
agent, or its successor in interest.
(5) The consumer is required to pay any fee in connection with
reinstatement except as provided in Section 1812.631.
(6) The consumer is required to pay a fee in connection with the
pickup of the property or the termination or rescission of the
rental-purchase agreement.
(7) The consumer is required to pay any fee permitted by the
rental-purchase agreement and this title that is not reasonable and
actually incurred by the lessor. The lessor has the burden of proof
to establish that a fee was reasonable and was an actual cost
incurred by the lessor.
(8) The consumer is required to pay a downpayment, more than one
advance periodic rental payment, or any other payment except a
security deposit permitted under Section 1812.625.
(9) Except to the extent permitted by subdivision (b) of Section
1812.627, the consumer waives any rights under Sections 1928 or 1929.
(10) The consumer grants a security interest in any property.
(11) The consumer's liability for loss or damage to the property
which is the subject of the rental-purchase agreement may exceed the
maximum described in subdivision (a) of Section 1812.627.
(12) Except under the circumstances authorized by subdivision (a)
or (b) of Section 1812.632, the consumer is obligated to make any
balloon payment. A "balloon payment" is any payment for the purchase
or use of the rental property which is more than the regularly
scheduled periodic payment amount.
(13) The consumer is required to pay a late payment fee that is
not permitted under Section 1812.626.
(14) The consumer is required to pay both a late payment fee and a
fee for the lessor's collection of a past due payment at the
consumer's home or other location.
(15) The consumer waives or offers to waive any right or remedy
against the lessor, its agents, or its successors in interest for any
violation of this title or any other illegal act. This subdivision
does not apply to a document executed in connection with the bona
fide settlement, compromise, or release of a specific disputed claim.
(16) The lessor, its agents, or its successors in interest may
commence any judicial action against the consumer in a county other
than the county in which (A) the rental-purchase agreement was signed
or (B) the consumer resides at the time the action is commenced.
(17) The amount stated as the cash price for any item of personal
property exceeds the cash price permitted under Section 1812.644.
(18) The total of payments exceeds the amount permitted under
Section 1812.644.
(b) Any provision in a rental-purchase agreement that is
prohibited by this title shall be void and unenforceable and a
violation of this title. A rental-purchase agreement which contains
any provision that is prohibited by this title is voidable by the
consumer.
1812.625. (a) The lessor may require the consumer to pay a security
deposit, however denominated, in an amount not to exceed the
equivalent of one month's rental only for the purpose of satisfying
any lawful claim by the lessor, up to the maximum described in
subdivision (a) of Section 1812.627, for those amounts reasonably
necessary to pay for the loss of the property or the repair of
damage, exclusive of reasonable wear and tear.
(b) Within two weeks after the lessor has taken possession of the
property from the consumer, the lessor shall deliver to the consumer
the amount of the security deposit less the amount, if any, deducted
for loss or repair as permitted by this title. If any amount is
deducted, the lessor shall also deliver to the consumer at that time
a copy of an itemized statement indicating the amount of the security
deposit, the amount deducted for loss or repair, and a detailed
statement of the basis for the deduction. Delivery may be made by
personal delivery or by first-class mail, postage prepaid.
1812.626. (a) The lessor may assess a late payment fee if the late
payment fee is specified in the rental-purchase agreement and is
permitted by this section.
(b) No fee shall be assessed for a payment which is less than
three days late if the rental-purchase agreement specifies weekly
periodic payments.
(c) No fee shall be assessed for a payment which is less than 7
days late if the rental-purchase agreement specifies longer than
weekly periodic payments.
(d) The lessor may assess more than one late fee for a particular
late payment if the total of all fees assessed for that late payment
does not exceed the maximum provided in subdivision (e). If the
maximum total late payment fee has been imposed for a particular
payment, no additional late payment fee may be imposed for that
payment.
(e) The total of all fees for a late payment shall not exceed the
lesser of 5 percent of the payment or five dollars ($5), except that
a minimum total fee of two dollars ($2) may be required.
1812.627. (a) The consumer's liability for loss or damage to the
property which is the subject of the rental-purchase agreement shall
in no event exceed the lesser of (1) the fair market value at the
time of the loss or damage or (2) the amount that would be necessary
for the renter to exercise the purchase option provided in
subdivision (a) of Section 1812.632.
(b) A lessor and a consumer may agree that the consumer may be
liable for loss only up to the maximum amount described in
subdivision (a) and only for one of the following:
(1) Loss caused by the consumer's negligent, reckless, or
intentional acts.
(2) Loss caused by the theft of the property subject to the
rental-purchase agreement unless one of the following is applicable:
(A) There is evidence of a burglary of the premises in which the
property is located, such as physical evidence or an official report
filed by the consumer with the police or other law enforcement
agency.
(B) The consumer establishes by the preponderance of the evidence
that the consumer has not committed or aided or abetted in the
commission of the theft of the property.
1812.628. (a) In addition to the circumstances described in
subdivision (a) of Section 1689.5, a rental-purchase agreement
regardless of the amount involved shall be deemed a home solicitation
contract or offer if the rental-purchase agreement has an initial
term that exceeds one week and was made at other than appropriate
trade premises, as defined in subdivision (b) of Section 1689.5.
(b) In addition to any other right of cancellation, a consumer has
the right to cancel a rental-purchase agreement, without penalty or
obligation if the consumer has not taken possession of the property.
1812.629. (a) Upon the request of the consumer, the lessor shall
provide the information as required by subdivision (b) of Section
1812.623 in an exemplar of the rental-purchase agreement covering the
property specified by the consumer and shall provide the consumer
with a copy of the proposed rental-purchase agreement prior to its
execution. The consumer may take this copy from the lessor's
premises.
(b) The lessor shall not obtain the consumer's signature to a
rental-purchase agreement if it contains blank spaces to be filled in
after it has been signed.
(c) A copy of the fully completed rental-purchase agreement and
all other documents which the lessor requests the consumer to sign
shall be given to the consumer at the time they are signed. The
rental-purchase agreement shall not be enforceable against the
consumer until the consumer has received a signed copy.
(d) The lessor shall deliver to the consumer a written receipt for
each payment made by the consumer.
1812.630. (a) (1) Any advertisement of a rental-purchase agreement
that states the amount of any payment shall clearly and conspicuously
disclose all of the following in the same language used in the
advertisement:
(A) That the agreement advertised is a rental-purchase agreement.
(B) That the property is used if that is the case.
(C) That ownership is not acquired until all of the payments
necessary to acquire ownership have been made.
(D) The total amount and number of periodic payments necessary to
acquire ownership.
(2) If more than one item is advertised in one print
advertisement, the lessor may comply with paragraph (1) by clearly
and conspicuously including in the advertisement a table or schedule
sufficient in detail to permit determination of the total amount and
number of periodic payments necessary to acquire ownership of the
items advertised having the highest and lowest total amount of
periodic payments necessary to acquire ownership.
(b) A lessor who advertises "no credit check" or otherwise states
or implies that no inquiry will be made of a consumer's credit
history or creditworthiness shall not (1) make any inquiry or request
a consumer to complete any document concerning the consumer's assets
or credit history, (2) obtain a consumer credit report as defined in
subdivision (c) of Section 1785.3, or (3) obtain an investigative
consumer report as defined in subdivision (c) of Section 1786.2.
1812.631. (a) A consumer may be deemed in default under the
rental-purchase agreement if either of the following applies:
(1) The rental-purchase agreement requires weekly periodic rental
payments and the consumer has not made a payment by the end of the
seventh day after its due date.
(2) The rental-purchase agreement requires rental payments in
periodic intervals longer than one week and the consumer has not made
a payment by the end of the 10th day after its due date.
(b) A consumer who is in default under a rental-purchase agreement
requiring weekly periodic rental payments may reinstate the
rental-purchase agreement, without losing any rights or options under
that agreement, by paying all past due payments, including late
payment fees, by the end of the seventh day after the due date of the
payment in default if the consumer retains possession of the
property and within one year after the due date of the payment in
default if the consumer returns or tenders the property to the
lessor, unless the lessor permits the consumer to retain the property
during this period.
(c) A consumer who is in default under a rental-purchase agreement
requiring rental payments in periodic intervals longer than one week
may reinstate the rental-purchase agreement, without losing any
rights or options under that agreement, by paying all past due
payments, including late payment fees, by the end of the 10th day
after the due date of the payment in default if the consumer retains
possession of the property and within one year after the due date of
the payment in default if the consumer returns or tenders the
property to the lessor, unless the lessor permits the consumer to
retain the property during this period.
(d) Upon reinstatement, the lessor shall provide the consumer with
the same rental property, if available, or substitute property of
the same brand, if available, and comparable quality, age, condition,
and warranty coverage. If substitute property is provided, the
lessor shall provide the lessee with the disclosures required in
paragraph (2) of subdivision (a) of Section 1812.623.
(e) (1) Except as provided in paragraph (2), a lessor shall not
deny a consumer the right of reinstatement provided in this section.
(2) This section does not apply to a consumer who has (A) stolen
or unlawfully disposed of the property, (B) damaged the property as
the result of the consumer's intentional, willful, wanton, or
reckless conduct, or (C) defaulted in making payments as described in
subdivision (a) on three consecutive occasions.
(3) If the lessor denies a consumer the right to reinstate
pursuant to paragraph (2), the lessor has the burden of proof to
establish that the denial was in good faith and was permitted under
paragraph (2).
(f) Nothing in this subdivision prohibits the lessor from
contacting the consumer provided that the lessor does not violate
Section 1812.638.
1812.632. (a) (1) The consumer has the right to acquire ownership
of the property within three months of the date on which the consumer
executed the rental-purchase agreement by tendering to the lessor an
amount equal to the cash price and any past due fees less all
periodic payments that the consumer has paid.
(2) Within 10 days after the consumer executes the rental purchase
agreement, the lessor shall personally deliver or send by
first-class mail to the consumer a notice informing the consumer of
the right described in paragraph (1), including the amount the
consumer must pay to acquire ownership and the date by which payment
must be made. The statement shall not be accompanied by any other
written information including solicitations for other rental-purchase
agreements.
(b) After the expiration of the three-month period following the
execution of the rental-purchase agreement, the consumer has the
right to acquire ownership of the property at any time by tendering
to the lessor all past due payments and fees and an amount equal to
the cash price stated in the rental-purchase agreement multiplied by
a fraction that has as its numerator the number of periodic payments
remaining under the agreement and that has as its denominator the
total number of periodic payments.
(c) (1) The lessor shall, in connection with a consumer's rights
under subdivision (b), provide the consumer with a written statement
in the manner set forth in paragraph (2) below that clearly states
(A) the total amount the consumer would have to pay to acquire
ownership of the rental property if the consumer makes all regularly
scheduled payments remaining under the rental-purchase agreement and
(B) the total amount the consumer would have to pay to acquire
ownership of that property pursuant to subdivision (a).
(2) The statement required by paragraph (1) shall be personally
delivered or sent by first-class mail to the consumer within seven
days after (A) the date the consumer requests information about the
amount required to purchase the rental property and (B) the date the
consumer has made one-half of the total number of periodic payments
required to acquire ownership of the rental property. The statement
shall not be accompanied by any other written information including
solicitations for other rental-purchase agreements.
(d) (1) Subject to paragraph (2), if any consumer who has signed
the rental-purchase agreement has experienced an interruption or
reduction of 25 percent or more of income due to involuntary job
loss, involuntary reduced employment, illness, pregnancy, or
disability after one-half or more of the total amount of the periodic
payments necessary to acquire ownership under the agreement has been
paid, the lessor shall reduce the amount of each periodic rental
payment by (A) the percentage of the reduction in the consumer's
income or (B) 50 percent, whichever is less, for the period during
which the consumer's income is interrupted or reduced. If payments
are reduced, the total dollar amount of payments necessary to acquire
ownership shall not be increased, and the rights and duties of the
lessor and the consumer shall not otherwise be affected. When the
consumer's income is restored, the lessor may increase the amount of
rental payments, but in no event shall rental payments exceed the
originally scheduled amount of rental payments.
(2) Paragraph (1) applies only after the consumer provides to the
lessor some evidence of the amount and cause of the interruption or
reduction of income.
1812.633. (a) The lessor shall maintain the property subject to the
rental-purchase agreement in good working order while the agreement
is in effect without charging any fee to the consumer in addition to
the regularly scheduled rental payments set forth in the
rental-purchase agreement.
(b) By the end of the second business day following the day on
which the lessor received notice from the consumer that the property
is not operating properly, the lessor shall repair or replace the
property without any fee to the consumer in addition to the regularly
scheduled rental payments set forth in the rental-purchase
agreement.
(c) If a repair or replacement cannot be immediately effected, the
lessor shall temporarily substitute property of comparable quality
and condition while repairs are being effected. If repairs cannot be
completed to the reasonable satisfaction of the consumer within 30
days after the lessor receives notice from the consumer or within a
longer period voluntarily agreed to by the consumer, the lessor shall
permanently replace the property.
(d) All replacement property shall be the same brand, if
available, and comparable in quality, age, condition, and warranty
coverage to the replaced property. If the same brand is not
available, the brand of the replacement property shall be agreeable
to the consumer.
(e) All of the consumer's and lessor's rights and obligations
under the rental-purchase agreement and this title that applied to
the property originally subject to the rental-purchase agreement
shall apply to any replacement property.
(f) The consumer shall not be charged, or held liable for, any
rental fee for any period of time during which the property that is
the subject of the rental-purchase agreement or any property
substituted for it pursuant to this section is not in good working
order.
(g) This section does not apply to the repair of damage resulting
from the consumer's intentional, willful, wanton, reckless, or
negligent conduct. If the lessor does not comply with this section
because of this subdivision, the lessor has the burden of proof to
establish that noncompliance was justified and in good faith.
(h) A lessor shall not deliver to a consumer any property which
the lessor knows or has reason to know is defective.
1812.634. When the lessor transfers ownership of the rental
property, the lessor shall also transfer to the consumer the
unexpired portion of any transferable warranties provided by the
manufacturer, distributor, or seller of the rental property, and
these warranties shall apply as if the consumer were the original
purchaser of the goods.
1812.635. (a) A lessor shall not sell, or offer for sale, a service
contract for the rental property if that service contract provides
any coverage while the rental-purchase agreement is in effect.
(b) A lessor may sell, or offer for sale, a service contract
providing coverage for the rental property after the consumer
acquires ownership of that property, if both of the following
conditions are satisfied:
(1) The lessor does not sell, or offer to sell, the service
contract before (A) the consumer pays at least one-half of the total
number of periodic payments necessary to acquire ownership of the
property or (B) the consumer acquires ownership of the property, as
provided in Section 1812.632, whichever occurs first.
(2) The lessor clearly and conspicuously indicates to the consumer
in writing before the consumer's purchase of the service contract
that the purchase is optional.
(c) If the consumer chooses to purchase a service contract before
the expiration of the rental-purchase agreement and defaults or
otherwise does not make all payments necessary to acquire ownership
within the rental period specified in the agreement, the lessor shall
refund all consideration paid for the service contract to the
consumer within two weeks after the lessor has received the consumer'
s last rental payment. This subdivision does not limit or alter any
of the consumer's cancellation or refund rights under the service
contract or under other provisions of law.
(d) "Service contract" has the meaning set forth in subdivision
(o) of Section 1791.
1812.636. (a) A consumer damaged by a violation of this title by a
lessor is entitled to recover all of the following:
(1) Actual damages.
(2) Twenty-five percent of an amount equal to the total amount of
payments required to obtain ownership if all payments were made under
the rental-purchase agreement, but not less than one hundred dollars
($100) nor more than one thousand dollars ($1,000).
(3) The consumer's reasonable attorney's fees and court costs.
(4) Exemplary damages, in the amount the court deems proper, for
intentional or willful violations of this title.
(5) Equitable relief as the court deems proper.
(b) Where more than one consumer is a party to a rental-purchase
agreement, the limitations of subdivision (a) shall apply to all
those consumers in the aggregate, and no more than one recovery shall
be permitted for each violation.
1812.637. (a) A lessor is not liable for a violation of this title
if, before the 30th calendar day after the date the lessor discovers
a bona fide error and before an action under this title is filed or
written notice of the error is received by the lessor from the
consumer, the lessor gives the consumer written notice of the error.
"Bona fide error," as used in this section, means a violation that
was not intentional and resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adapted to
avoid that error. Examples of a bona fide error include clerical
errors, calculation errors, errors due to unintentionally improper
computer programming or data entry, and printing errors, but does not
include an error of legal judgment with respect to a lessor's
obligations under this title.
(b) Notwithstanding subdivision (a), if the lessor notifies the
consumer of a bona fide error the correction of which would increase
the amount of any payment, the lessor may not collect the amount of
the increase, and the consumer may enforce the rental-purchase
agreement as initially written.
(c) Notwithstanding subdivision (a), if the lessor notifies the
consumer of a bona fide error the correction of which would lower the
amount of any payment, the lessor shall immediately refund to the
consumer the difference between what the consumer paid and what the
consumer should have paid if the agreement were correct at the
inception of the transaction.
1812.638. (a) A lessor shall not engage in any unfair, unlawful, or
deceptive conduct, or make any untrue or misleading statement in
connection with the collection of any payment owed by a consumer or
the repossession of any property or attempt to collect or collect any
payment in a manner that would be unlawful to collect a debt
pursuant to Title 1.6C (commencing with Section 1788).
(b) All of the following apply to any communication by a lessor
with any person other than the consumer for the purpose of acquiring
information about the location of a consumer or of any rental
property:
(1) The lessor shall identify itself and state that the lessor is
confirming or correcting location information concerning the
consumer.
(2) The lessor shall not communicate with any person more than
once unless requested to do so by the person or unless the lessor
reasonably believes that the earlier response is erroneous or
incomplete and that the person now has correct or complete location
information.
(3) The lessor shall not communicate by postcard.
(4) The lessor shall not use any language or symbol on any
envelope or in the contents of any communication that indicates that
the communication relates to the collection of any payment or the
recovery or repossession of rental property.
(5) The lessor shall not communicate with any person other than
the consumer's attorney, after the lessor knows the consumer is
represented by an attorney with regard to the rental-purchase
agreement and has knowledge of, or can readily ascertain, the
attorney's name and address, unless the attorney fails to respond
within a reasonable period of time to communication from the lessor
or unless the attorney consents to direct communication with the
consumer.
(c) Without the prior consent of the consumer given directly to
the lessor or the express permission of a court of competent
jurisdiction, a lessor shall not communicate with a consumer in
connection with the collection of any payment or the recovery or
repossession of rental property at any of the following:
(1) The consumer's place of employment.
(2) Any unusual time or place or a time or place known or that
should be known to be inconvenient to the consumer. In the absence of
knowledge of circumstances to the contrary, a lessor shall assume
that the convenient time for communicating with a consumer is after 8
a.m. and before 9 p.m., local time at the consumer's location.
(d) A lessor shall not communicate, in connection with the
rental-purchase agreement, with any person other than the consumer,
the consumer's attorney, or the lessor's attorney, except to the
extent the communication is any of the following:
(1) Reasonably necessary to acquire location information
concerning the consumer or the rental property, as provided in
subdivision (b).
(2) Upon the prior consent of the consumer given directly to the
lessor.
(3) Upon the express permission of a court of competent
jurisdiction.
(4) Reasonably necessary to effectuate a postjudgment judicial
remedy.
(e) If a consumer notifies the lessor in writing that the consumer
wishes the lessor to cease further communication with the consumer,
the lessor shall not communicate further with the consumer with
respect to the rental-purchase agreement, except for any of the
following:
(1) To advise the consumer that the lessor's further efforts are
being terminated.
(2) To notify the consumer that the lessor may invoke specified
remedies allowable by law which are ordinarily invoked by the lessor.
(3) Where necessary to effectuate any postjudgment remedy.
(f) A lessor shall not harass, oppress, or abuse any person in
connection with a rental-purchase agreement, including engaging in
any of the following conduct:
(1) Using or threatening the use of violence or any criminal means
to harm the physical person, reputation, or property of any person.
(2) Using obscene, profane, or abusive language.
(3) Causing a telephone to ring, or engaging any person in
telephone conversation repeatedly or continuously with intent to
annoy, abuse, or harass any person.
(4) Placing telephone calls without disclosure of the caller's
identity.
1812.639. A lessor shall not engage in any unfair, unlawful, or
deceptive conduct or make any untrue or misleading statement in
connection with a rental-purchase agreement, including any violation
of this title.
1812.640. A lessor shall not report any late payment, default, or
repossession to a consumer credit reporting agency, as defined in
subdivision (d) of Section 1785.3, or to an investigative consumer
reporting agency, as defined in subdivision (d) of Section 1786.2 if
the lessor (a) advertises "no credit check" or otherwise states or
implies that no inquiry will be made of a consumer's credit history
or creditworthiness or (b) does not obtain a consumer credit report
or investigative consumer report on a consumer before entering into a
rental-purchase agreement with that consumer.
1812.641. (a) A lessor shall not send any solicitation or other
promotional material to a person identified by the consumer as a
reference to verify the consumer's income, assets, credit history, or
residence unless all of the following occur:
(1) The lessor clearly discloses in the rental-purchase agreement
or application that (A) the lessor may send solicitations or other
promotional material to references provided by the consumer unless
the consumer objects and (B) the consumer has the right to object
without incurring any additional rental charge or fee or any loss of
contractual rights.
(2) A space on the rental-purchase agreement or application
adjacent to the disclosure described in paragraph (1) is provided for
the consumer to indicate the consumer's approval or disapproval of
the lessor's sending solicitations or other promotional material.
(3) The consumer affirmatively indicates approval.
(4) The lessor does not vary any term required to be disclosed
pursuant to Section 1812.623 depending on whether the consumer
approves or disapproves of the lessor's sending of solicitations or
other promotional material to references.
(b) The first solicitation or other promotional material directed
to a person whom the consumer has identified as a reference shall
clearly offer the reference the opportunity, without cost, to
instruct the lessor to refrain from sending further solicitations or
other promotional material to the reference. If so instructed, the
lessor shall not send any further solicitations or other promotional
material to the reference and shall remove the reference's name and
address from the lessor's mailing list.
(c) This section shall not apply to solicitations or other
promotional material sent generally to people solely on the basis of
demographic, geographic, or postal zip code criteria and without
regard to whether the people have been identified as references by
consumers.
1812.642. A lessor shall not discriminate against a prospective
consumer on any ground that would be a prohibited basis for a
creditor to discriminate against an applicant for credit as provided
in the Equal Credit Opportunity Act (15 U.S.C. Sec. 1691 et seq.) and
Regulation B (12 C.F.R. Part 202) as if they applied to a
rental-purchase agreement. Nothing in this section shall be construed
in any manner to mean that a rental-purchase agreement is a credit
transaction.
1812.643. (a) Except as provided in subdivision (b), a lessor who
obtains the signature of more than one person on a rental-purchase
agreement shall deliver the notice set forth in subdivision (c) to
each person before that person signs the agreement.
(b) This section does not apply if the persons signing the
agreement are married to each other or in fact receive possession of
the property described in the agreement.
(c) The notice required by this section is as follows:
"NOTICE TO COSIGNER
If you sign this contract, you will have the same responsibility
for the property and the same obligation to make payments that every
renter has.
If any renter does not pay, you may have to pay the full amount
owed, including late fees, and you may have to pay for certain loss
or damage to the property.
The lessor may collect from you without first trying to collect
from any other renter. The lessor can use the same collection methods
against you that can be used against any renter, such as suing you
or garnishing your wages.
This notice is not the contract that makes you responsible.
Before you sign, be sure you can afford to pay if you have to, and
that you want to accept this responsibility."
(d) The notice required by subdivision (c) shall be printed in at
least 10-point boldface type in English and Spanish. If the
rental-purchase agreement is required to be written in a language
other than English or Spanish, the notice shall be written in English
and, in addition or in lieu of Spanish, in that other language.
(e) If the notice set forth in subdivision (c) is included with
the text of the rental-purchase agreement, the notice shall appear
immediately above or adjacent to the disclosures required by
subdivision (b) of Section 1812.623. If the notice is not included
with the text of the agreement, the notice shall be on a separate
sheet which shall not contain any other text except as is necessary
to identify the lessor and agreement to which the notice refers and
to provide for the date and the person's acknowledgment of receipt.
(f) The lessor shall give each person entitled to notice under
this section a copy of the completed rental-purchase agreement before
obtaining that person's signature.
(g) If a person entitled to receive notice and a copy of the
rental-purchase agreement under this section does not receive the
notice or agreement in the manner required, that person has no
liability in connection with the rental-purchase transaction.
1812.644. (a) A lessor shall maintain records that establish the
lessor's cost, as defined in subdivision (k) of Section 1812.622, for
each item of personal property that is the subject of the
rental-purchase agreement. A copy of each rental-purchase agreement
and of the records required by this subdivision shall be maintained
for two years following the termination of the agreement.
(b) The maximum cash price for the lessor's first rental of the
property that is the subject of the rental-purchase agreement may not
exceed 1.65 times the lessor's cost for computer systems and
appliances, 1.7 times the lessor's cost for electronic sets, 1.9
times the lessor's cost for automotive accessories, furniture,
jewelry, and musical instruments, and 1.65 times the lessor's cost
for all other items.
(c) The maximum total of payments may not exceed 2.25 times the
maximum cash price that could have been charged for the first rental
of the property under subdivision (b).
(d) The maximum total of payments for the lessor's second and
subsequent rental of the property that is the subject of the
rental-purchase agreement may not exceed the maximum total of
payments permitted under subdivision (c) for the first rental of that
property less (1) for appliances and electronic sets, one-third the
amount of all rental payments paid to the lessor by consumers who
previously rented that property or (2) for furniture, computer
systems, and all other items, one-half the amount of all rental
payments paid to the lessor by consumers who previously rented that
property.
(e) The maximum cash price for property on its second or
subsequent rental may not exceed the maximum total of payments for
that property as permitted under subdivision (d) divided by 2.25.
(f) Upon the written request of the Attorney General, any district
attorney or city attorney, or the Director of the Department of
Consumer Affairs, a lessor shall provide copies of the records
described in this section.
(g) If a lessor willfully discloses a cash price or a total of
payments that exceeds the amount permitted by this section, the
rental-purchase agreement is void, the consumer shall retain the
property without any obligation, and the lessor shall refund to the
consumer all amounts paid.
1812.645. An action on a rental-purchase agreement shall be tried
in the county in which the rental-purchase agreement was signed or
the consumer resides at the time the action is commenced.
1812.646. Any waiver or modification of the provisions of this
title by the consumer or lessor shall be void and unenforceable as
contrary to public policy.
1812.647. Any person who willfully violates any provision of this
title is guilty of a misdemeanor.
1812.648. The rights, remedies, and penalties established by this
title are cumulative to the rights, remedies, or penalties
established under other laws.
1812.649. If any provision of this title or the application thereof
to any person or circumstances is held invalid, that invalidity
shall not affect other provisions or applications of the title that
can be given effect without the invalid provision or application, and
to this end the provisions of this title are severable.
