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Current Status Bill Number:View additional legislative information at the LPITS web site.435 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19990203 Primary Sponsor:Short All Sponsors:Short, Gregory and Jackson Drafted Document Number:l:\s-res\lhs\003rent.kad.doc Companion Bill Number:3514 Residing Body:Senate Current Committee:Banking and Insurance Committee 02 SBI Subject:Consumer Affairs, Consumer rental- purchase transactions, cash sales prices History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ Senate 19990203 Introduced, read first time, 02 SBI referred to Committee Versions of This Bill
TO AMEND SECTION 37-2-702, OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DISCLOSURE REQUIRED IN RENTAL-PURCHASE TRANSACTIONS, SO AS TO REQUIRE DISCLOSURE OF A CASH SALES PRICE; AND TO FURTHER AMEND PART 7, CHAPTER 2, TITLE 37, RELATING TO RENTAL-PURCHASE AGREEMENTS, BY ADDING SECTION 37-2-715, SO AS TO REQUIRE A RENTAL-PURCHASE LESSOR TO REGISTER WITH THE DEPARTMENT OF CONSUMER AFFAIRS; BY ADDING SECTION 37-2-716, SO AS TO AUTHORIZE THE SALE OF INSURANCE IN CONNECTION WITH RENTAL-PURCHASE TRANSACTIONS; AND BY ADDING SECTION 37-2-717, SO AS TO PROHIBIT THE IMPOSITION OF CHARGES IN RENTAL-PURCHASE TRANSACTIONS THAT ARE NOT AUTHORIZED BY THIS PART OR BY RULE OF THE DEPARTMENT; AND TO REPEAL SECTION 37-6-204, RELATING TO NOTIFICATIONS FOR PERSONS ENGAGED IN RENTAL-PURCHASE BUSINESS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 37-2-702 of the 1976 Code is amended to read:
"Section 37-2-702. (1) In a consumer rental-purchase agreement, the lessor shall disclose the following items, as applicable:
(a) The total of scheduled payments.
(b) The number, amounts, and timing of all payments including taxes paid to or through the lessor necessary to acquire ownership of the property.
(c) A statement that the lessee will not own the property until the lessee has made the number of payments and the total of scheduled payments necessary to acquire ownership of the property.
(d) A statement that the total of payments does not include other charges, such as late payment charges, and that the consumer should see the contract for an explanation of these charges.
(e) If applicable, a statement that the lessee is responsible for the fair market value of the property if and as of the time it is lost, stolen, damaged, or destroyed.
(f) A statement indicating whether the property is new or used, provided, it is not a violation of this section to indicate that the property is used if it is actually new.
(g) A statement that at any time after the first periodic payment is made, the lessee may acquire ownership of the property by tendering fifty-five percent of the difference between the total of scheduled payments and the total amount paid on the account.
(h)(1) A cash price for the property.
(2) 'Cash price' means the price at which retail sellers are selling and retail buyers are buying the same or similar property for cash in the same trade area in which the lessor's place of business is located.
(3) A lessor shall maintain records that establish that the price disclosed as the cash price in a rental-purchase agreement is the cash price as defined in item (2). A copy of each rental-purchase agreement and of the records required by this item shall be maintained for two years following the termination of the agreement. Evidence of the cash price of new rental property may include the following:
(A) Published prices or advertisements by retailers of similar products selling in the same trade area in which the lessor's business is located, if the prices were published or disseminated within the 90-day period preceding the date of the rental-purchase agreement.
(B) An amount equal to twice the documented actual cost, including freight charges, of the rental property to the lessor from a wholesaler, distributor, or manufacturer.
(C) The manufacturer's suggested retail price.
(4) Upon the written request of the Department of Consumer Affairs, a lessor shall provide copies of the records described in this section.
(5) If a lessor willfully discloses a cash price in a rental-purchase agreement that exceeds the cash price of the property as defined in item (2) of this subsection, 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.
(h) (i) The administrator of the Department of Consumer Affairs may promulgate regulations setting requirements for the order and conspicuousness of the disclosures set forth in subitems (a) through (h) of this section. These regulations may allow these disclosures to be made in accordance with model forms prepared by the administrator.
(2) In a consumer rental-purchase agreement, the lessor shall make the disclosures required by subsection (1) of this section clearly and conspicuously, and a copy must be given to the lessee for his records.
(3) In a consumer rental-purchase agreement, the lessor shall make the disclosures in the manner required by subsection (2) of this section before consummation of the transaction."
SECTION 2. Part 7, Chapter 2, Title 37 of the 1976 Code is amended by adding:
"Section 37-2-715. (1) No person may rent or sell or offer to rent or sell personal property pursuant to consumer rental-purchase agreements unless that person has applied for and received a certificate of registration from the Department of Consumer Affairs.
(2) Applications for certificates of registration shall be made on forms approved by the administrator and shall be accompanied by a registration fee of $90.00 per business location in which consumer rental-purchase agreements are offered. Certificates of registration are renewable on July I of each year with the payment of a renewal fee of $90.00 per business location. Registration and renewal fees collected pursuant to this section shall be utilized by the administrator for expenses incurred in examining registrants and in enforcing the provisions of the Consumer Protection Code.
Section 37-2-716. (A) A lessor in a consumer rental-purchase agreement may contract to sell insurance against the loss of or damage to property, or against liability, if the lessor furnishes a clear and specific statement in writing to the lessee, setting forth the cost of insurance if obtained through the lessor, and stating that the lessee or buyer may chose the person through whom the insurance is to be obtained. A lessor may not require the purchase of insurance by lessee from the lessor.
(B) In addition to the other charges permitted by this chapter, a lessor and a lessee may contract for a liability waiver fee in the following amounts:
(1) In the case of a rental-purchase agreement with weekly or by-weekly renewal dates, the liability waiver fee may not exceed the greater of:
(a) five percent (5%) of a periodic lease payment due, or
(b) two dollars ($2.00).
(2) In the case of a rental-purchase agreement with monthly renewal dates or renewal dates less frequent than monthly, the liability waiver fee may not exceed the greater of:
(a) five percent (5%) of the periodic lease payment due; or
(b) five dollars ($5.00).
(C) The selling or offering for sale of a liability damage waiver under this section is subject to the following prohibitions and requirements:
(1) A lessor may not sell or offer to sell a liability damage waiver unless all restrictions, conditions and exclusions are:
(a) printed in the rental-purchase agreement, or in a separate agreement, in 8 point type or larger; or
(b) written in ink or typewritten in or on the face of the rental-purchase agreement in a blank space provided therefore.
(2) The liability damage waiver may exclude any loss or damage to the property that is the subject of the rental-purchase agreement caused by moisture, scratches, mysterious disappearance, vandalism, abandonment of the property, or any other damage intentionally caused by the lessee or that results from the lessee's willful or wanton misconduct.
(3) The liability damage waiver agreement must include a statement of the total charge for the liability damage waiver. The liability damage waiver agreement must display in 8 point boldface type the following:
`NOTICE: THIS CONTRACT OFFERS, FOR AN ADDITIONAL CHARGE, A LIABILITY DAMAGE WAIVER TO COVER YOUR RESPONSIBILITY FOR DAMAGE TO THE PROPERTY. BEFORE DECIDING WHETHER TO PURCHASE THE LIABILITY DAMAGE WAIVER, YOU MAY WISH TO DETERMINE WHETHER YOUR OWN HOMEOWNERS OR CASUALTY INSURANCE AFFORDS YOU COVERAGE FOR DAMAGE TO RENTAL PROPERTY, AND THE AMOUNT OF THE DEDUCTIBLE UNDER YOUR OWN INSURANCE COVERAGE. THE PURCHASE OF THIS LIABILITY DAMAGE WAIVER IS NOT MANDATORY AND MAY BE DECLINED.'
(4) The restrictions, conditions or exclusions of the liability damage waiver must be disclosed on the agreement or on a separate agreement, sheet, or handout given to the lessee before entering into the rental-purchase agreement. The separate contract, sheet or handout must be signed or otherwise acknowledged by the lessee as being received before entering into the rental-purchase agreement.
(5) The rates provided in this section are subject to review and periodic adjustment and the adjustments will be in accordance with and in the same percentages as other dollar amount adjustments made pursuant to Section 37-1-109. The lessor shall keep or maintain records as prescribed by the administrator. The administrator or his designees may inspect the records and determine whether the rates and charges under this section are fair and reasonable. If the administrator finds upon inspection of these records that any of the rates and charges are not fair and reasonable in relation to the consumer benefits provided, he may further adjust these rates and charges through a rulemaking proceeding under the Administrative Procedures Act.
Section 37-2-717. Except for such charges as are specifically recognized in this part, no person may offer other services in connection with consumer rental-purchase agreement or charge or contract to charge other fees or charges in connection with a consumer rental-purchase transaction, provided, however, charges for other benefits if they are of value to the lessor, if they are reasonable in relation to the benefits, are of a type that is not for credit, and are authorized by the administrator as a permissible charge in a rule adopted by the administrator. Any charge not authorized by this part or by rule shall be considered an illegal excess charge."
SECTION 3. Section 37-6-204 is repealed.
SECTION 4. This act takes effect upon approval by the Governor.
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