CHAPTER 92. RENTAL-PURCHASE AGREEMENTS

State Codes and Statutes

Statutes > Texas > Business-and-commerce-code > Title-5-regulation-of-businesses-and-services > Chapter-92-rental-purchase-agreements

BUSINESS AND COMMERCE CODE

TITLE 5. REGULATION OF BUSINESSES AND SERVICES

SUBTITLE B. RENTAL PRACTICES

CHAPTER 92. RENTAL-PURCHASE AGREEMENTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 92.001. DEFINITIONS. In this chapter:

(1) "Advertisement" means a commercial message in any medium

that directly or indirectly promotes or assists a rental-purchase

agreement.

(2) "Commission" means the Texas Commission of Licensing and

Regulation.

(3) "Consumer" means an individual who leases personal property

under a rental-purchase agreement.

(4) "Department" means the Texas Department of Licensing and

Regulation.

(5) "Loss damage waiver" means a merchant's agreement to not

hold a consumer liable for loss from all or part of any damage to

merchandise.

(6) "Merchandise" means the personal property that is the

subject of a rental-purchase agreement.

(7) "Merchant" means a person who, in the ordinary course of

business, regularly leases, offers to lease, or arranges for the

leasing of merchandise under a rental-purchase agreement. The

term includes a person who is assigned an interest in a

rental-purchase agreement.

(8) "Rental-purchase agreement" means an agreement under which a

consumer may use merchandise for personal, family, or household

purposes for an initial period of four months or less, and that:

(A) is automatically renewable with each payment after the

initial period; and

(B) permits the consumer to become the owner of the merchandise.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.002. ADVERTISEMENT REQUIREMENTS. An advertisement for a

rental-purchase agreement that refers to or states the amount of

a payment or the right to acquire ownership of any one particular

item under the agreement must clearly and conspicuously state:

(1) that the transaction advertised is a rental-purchase

agreement;

(2) the total amount and number of payments necessary to acquire

ownership; and

(3) that the consumer does not acquire ownership rights unless

the merchandise is rented for a specified number of payment

periods.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

SUBCHAPTER B. FORM AND CONTENT OF AGREEMENTS

Sec. 92.051. FORM OF AGREEMENT. (a) A rental-purchase

agreement must be written in:

(1) plain English; and

(2) any other language used by the merchant in an advertisement

related to the agreement.

(b) A numerical amount included in a rental-purchase agreement

must be stated in figures.

typed in each rental-purchase agreement in a size equal to at

least 10-point boldfaced type.

(d) The attorney general shall provide a form agreement that may

be used to satisfy the requirements of a rental-purchase

agreement under this chapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.052. REQUIRED DISCLOSURES. (a) A rental-purchase

agreement must disclose:

(1) whether the merchandise is new or used;

(2) the price for which the merchant would have sold the

merchandise to the consumer for cash on the date of the

agreement;

(3) the amount and timing of payments;

(4) the total number of payments necessary and the total amount

to be paid to acquire ownership of the merchandise;

(5) that the consumer does not acquire ownership rights unless

the consumer complies with the ownership terms of the agreement;

(6) the amount and purpose of any payment, charge, or fee in

addition to the regular periodic payments; and

(7) whether the consumer is liable for loss or damage to the

merchandise and, if so, the maximum amount for which the consumer

may be liable.

(b) Notice of the right to reinstate the agreement must be

disclosed in the agreement.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.053. OTHER REQUIRED PROVISIONS. A rental-purchase

agreement must provide that:

(1) any charge in addition to periodic payments must be

reasonably related to the service performed; and

(2) a consumer who fails to make a timely payment may reinstate

an agreement, without losing any right or option previously

acquired, by taking the required action before the later of:

(A) one week after the due date of the payment; or

(B) the number of days after the due date of the payment that is

equal to half the number of days in a regular payment period.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.054. PROHIBITED PROVISIONS. (a) A rental-purchase

agreement may not:

(1) require a consumer to:

(A) pay a late charge or reinstatement fee except as provided by

Section 92.055(b);

(B) make a payment at the end of the scheduled rental-purchase

term in excess of or in addition to a regular periodic payment to

acquire ownership of the merchandise; or

to cover the merchandise;

(2) require a confession of judgment;

(3) authorize a merchant or an agent of the merchant to commit a

breach of the peace in repossessing merchandise; or

(4) waive a defense, counterclaim, or right the consumer may

have against the merchant or an agent of the merchant.

(b) A consumer may not in any event be required to pay a sum

greater than the total amount to be paid to acquire ownership of

the merchandise as disclosed under Section 92.052(a)(4).

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.055. RESTRICTIONS ON LATE CHARGES AND REINSTATEMENT

FEES. (a) Only one late charge or reinstatement fee may be

collected on a payment regardless of the period during which the

payment remains in default.

(b) A rental-purchase agreement may require the consumer to pay

a late charge or reinstatement fee only if:

(1) a periodic payment is delinquent for more than:

(A) seven days, if the payment is due monthly; or

(B) three days, if the payment is due more frequently than

monthly; and

(2) the charge or fee is in an amount not less than $5 and not

more than the lesser of:

(A) $10; or

(B) 10 percent of the delinquent payment.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

SUBCHAPTER C. REPOSSESSION AND REINSTATEMENT

Sec. 92.101. MERCHANT'S REPOSSESSION RIGHT. This chapter does

not prevent a merchant from attempting repossession of

merchandise during the reinstatement period.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.102. EFFECT OF REPOSSESSION DURING REINSTATEMENT PERIOD.

A consumer's right to reinstate a rental-purchase agreement is

not affected by the merchant's repossession of the merchandise

during the reinstatement period.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.103. EFFECT ON REINSTATEMENT PERIOD OF MERCHANDISE

RETURN. If merchandise is returned during the applicable

reinstatement period, other than through judicial process, the

right to reinstate the rental-purchase agreement is extended for

a period of not less than 30 days after the date of return.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.104. MERCHANT'S DUTIES ON REINSTATEMENT. (a) On

reinstatement, the merchant shall provide the consumer with:

(1) the same merchandise; or

(2) substitute merchandise of comparable quality and condition.

(b) A merchant who provides the consumer with substitute

merchandise shall also provide the consumer with the disclosures

required by Section 92.052(a).

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

SUBCHAPTER D. LOSS DAMAGE WAIVERS

Sec. 92.151. CONTRACT FOR WAIVER. In addition to other charges

permitted by this chapter, a consumer may contract for a loss

damage waiver.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.152. CHARGE FOR WAIVER. A merchant may charge a

periodic fee for a loss damage waiver in an amount not to exceed

10 percent of the periodic rental payment.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.153. RESTRICTIONS ON MERCHANT CONCERNING WAIVER. A

merchant may not:

(1) sell a loss damage waiver unless:

(A) the department has approved the form of the contract

containing the waiver; and

(B) the consumer agrees to the waiver in writing; or

(2) impose or require the purchase of a loss damage waiver as a

mandatory charge.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.154. REQUIRED NOTICE IN WAIVER. A contract that offers

a loss damage waiver must include the following notice:

"This contract offers an optional loss damage waiver for an

additional charge to cover your responsibility for loss of or

damage to the merchandise. You do not have to purchase this

coverage. Before deciding whether or not to purchase this loss

damage waiver, you may consider whether your homeowners' or

casualty insurance policy affords you coverage for loss of or

damage to rental merchandise and the amount of the deductible you

would pay under your policy."

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.155. STATEMENT OF TOTAL CHARGE. A loss damage waiver

agreement must include a statement of the total charge for the

loss damage waiver.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.156. AUTHORIZED EXCLUSIONS. A loss damage waiver may

exclude:

(1) loss or damage to the merchandise that is caused by an

unexplained disappearance or abandonment of the merchandise;

(2) damage that is intentionally caused by the consumer; or

(3) damage that results from the consumer's wilful or wanton

misconduct.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.157. RELATIONSHIP TO INSURANCE. A loss damage waiver is

not insurance.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.158. RULES FOR REVIEW OF CERTAIN CONTRACTS. The

commission by rule shall provide the method for annually

submitting to the department for review any contract, including

any amendment to a contract, that contains a loss damage waiver.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.159. FEES. The commission by rule shall set a

reasonable fee to be paid by a merchant for:

(1) the review of a contract form under Section 92.158; and

(2) the administration of this chapter by the department.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.160. ADMINISTRATIVE ENFORCEMENT OF SUBCHAPTER. (a) The

department shall enforce this subchapter and, as necessary, may

investigate a merchant who has one or more contracts that include

a loss damage waiver.

(b) A person may file a complaint with the department alleging a

violation of this subchapter. The department shall investigate

the alleged violation on receipt of the complaint and may inspect

any record relevant to the complaint.

determines that a violation may have occurred, the commission

shall provide an opportunity for a hearing in the manner provided

for a contested case under Chapter 2001, Government Code.

(d) If, after opportunity for hearing, the commission determines

that the merchant has violated this subchapter, the commission

may:

(1) impose an administrative penalty under Chapter 51,

Occupations Code; or

(2) award the complainant damages in an amount not to exceed the

amount of the contract price for the merchandise.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

SUBCHAPTER E. CIVIL ENFORCEMENT

Sec. 92.201. ACTION FOR VIOLATION OF CHAPTER. (a) A consumer

damaged by a merchant's violation of this chapter is entitled to

recover from the merchant:

(1) actual damages;

(2) an amount equal to 25 percent of the total amount of

payments required to obtain ownership of the merchandise, except

that the amount recovered under this subdivision may not be less

than $250 or more than $1,000; and

(3) reasonable attorney's fees and court costs.

(b) A merchant is not liable under this section for a violation

of this chapter caused by the merchant's error if, subject to

Subsection (c), the merchant:

(1) provides the consumer written notice of the error; and

(2) makes adjustments in the consumer's account as necessary to

ensure:

(A) the consumer will not be required to pay an amount in excess

of the amount disclosed; and

(B) the agreement otherwise complies with this chapter.

(1) the 31st day after the date the merchant discovers the

error; and

(2) the merchant receives written notice of the error from the

consumer or an action under this section is filed.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 92.202. DECEPTIVE TRADE PRACTICE. A violation of this

chapter is a deceptive trade practice under Subchapter E, Chapter

17.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

Loading..

Loading, Please Wait!