S*693 Session 109 (1991-1992)
S*0693(Rat #0201, Act #0132 of 1991) General Bill, By I.E. Lourie
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 13
to Title 37 so as to provide for the regulation of subleasing and the loan
assumption of a motor vehicle, to authorize the Department of Consumer Affairs
to promulgate regulations, and provide a penalty for violation of the Chapter
or regulations promulgated pursuant to it.-amended title
02/20/91 Senate Introduced and read first time SJ-6
02/20/91 Senate Referred to Committee on Transportation SJ-6
04/09/91 Senate Committee report: Favorable with amendment
Transportation SJ-22
04/10/91 Senate Amended SJ-130
04/10/91 Senate Read second time SJ-133
04/16/91 Senate Read third time and sent to House SJ-24
04/17/91 House Introduced and read first time HJ-27
04/17/91 House Referred to Committee on Labor, Commerce and
Industry HJ-27
05/15/91 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-8
05/22/91 House Amended HJ-153
05/22/91 House Read second time HJ-156
05/23/91 House Read third time and returned to Senate with
amendments HJ-18
05/27/91 Senate Concurred in House amendment and enrolled SJ-11
06/06/91 Ratified R 201
06/12/91 Signed By Governor
06/12/91 Effective date 06/12/91
06/12/91 Act No. 132
06/26/91 Copies available
(A132, R201, S693)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH
CAROLINA, 1976, BY ADDING CHAPTER 13 TO TITLE 37 SO AS TO
PROVIDE FOR THE REGULATION OF SUBLEASING AND THE
LOAN ASSUMPTION OF A MOTOR VEHICLE, TO AUTHORIZE THE
DEPARTMENT OF CONSUMER AFFAIRS TO PROMULGATE
REGULATIONS, AND PROVIDE A PENALTY FOR VIOLATION OF
THE CHAPTER OR REGULATIONS PROMULGATED PURSUANT
TO IT.
Be it enacted by the General Assembly of the State of South Carolina:
Regulation of subleasing and loan assumption
SECTION 1. Title 37 of the 1976 Code is amended by adding:
"CHAPTER 13
Regulation of the Subleasing and Loan
Assumption
of Motor Vehicles
Section 37-13-10. As used in this chapter:
(1) `Buyer' means a purchaser of a motor vehicle under the terms
of a retail installment contract. It includes a co-buyer on the retail
installment contract.
(2) `Lease' means an agreement between a lessor and lessee
where the lessee obtains the possession and use of a motor vehicle for the
period of time, for the purposes, and for the consideration set forth in the
agreement whether or not the agreement includes an option to purchase the
motor vehicle. However, `lease' does not include a residential rental
agreement of a manufactured home subject to Chapter 40 of Title 27.
(3) `Lessor' means a person who in the regular course of business
or as a part of regular business activity leases motor vehicles under motor
vehicle lease agreements or purchases motor vehicle lease agreements or a
sales finance company that purchases motor vehicle lease agreements.
(4) `Lessee' means a person who obtains possession and use of a
motor vehicle through a motor vehicle lease agreement.
(5) `Person' means an individual, a partnership, a corporation, an
association, or other group however organized.
(6) `Security interest' means an interest in personal property that
secures performance of an obligation.
(7) `Secured party' means a lender, a seller, or other person in
whose favor there is a security interest including a person to whom
accounts or retail installment sales contracts have been sold.
(8) `Sublease' means an agreement whether written or oral to
transfer:
(a) to a third party possession of a motor vehicle which is and,
while in that third party's possession, remains the subject of a security
interest which secures performance of a retail installment contract or
consumer loan;
(b) or assign to a third party any of the buyer's rights, interests, or
obligations under the retail installment contract or consumer loan;
(c) to a third party possession of a motor vehicle which is and,
while in the third party's possession, remains the subject of a motor vehicle
lease agreement; or
(d) or assign to a third party any of the lessee's or buyer's rights,
interests, or obligations under the motor vehicle lease agreement.
(9) `Sublease arranger' means a person who engages in the
business of inducing by any means buyers and lessees to enter into
subleases as sublessors and inducing third parties to enter into subleases or
sublessees, however these contracts are called.
(10) `Third party' means a person other than the buyer or the lessee of
the vehicle.
(11) `Transfer' means to transfer possession of a motor vehicle by sale,
loan assumption, lease, sublease, or lease assignment.
Section 37-13-20. A sublease arranger commits an offense if the
sublease arranger arranges a sublease of a motor vehicle and:
(1) first does not obtain written authorization for the sublease
from the vehicle's secured party or lessor;
(2) accepts a fee without first having obtained written
authorization for the sublease from the vehicle's secured party or lessor;
(3) accepts a fee in excess of the amount allowed by regulations
promulgated pursuant to this chapter;
(4) does not disclose the location of the vehicle on the request of
the vehicle's buyer, lessee, secured party, or lessor;
(5) does not provide to the third party new, accurate disclosures
under the Consumer Protection Act, 15 U.S.C. Section 1601, et seq.; (6) does not provide oral and written notice to the buyer or lessee that
he is not released from liability;
(7) does not ensure that all rights under warranties and service
contracts regarding the motor vehicle transfer to the third party unless a pro
rata rebate for unexpired coverage is applied to reduce the third party's cost
under the sublease;
(8) does not take reasonable steps to ensure that the third party is
financially able to assume the payment obligations of the buyer or lessee
according to the terms of the lease agreement, retail installment contract, or
consumer loan; or
(9) violates a regulation promulgated by the South Carolina
Department of Consumer Affairs pursuant to this chapter.
Section 37-13-30. It is not a defense to prosecution under Section 37-13-20 that the motor vehicle's buyer or lessee, secured party, or lessor has
violated a contract creating a security interest or lease in the motor vehicle,
nor may a sublease arranger shift to the lessee, buyer, or third party the
arranger's duty under Section 37-13-20(1) or (2) to obtain prior written
authorization for formation of sublease.
Section 37-13-40. A buyer, lessee, sublessee, secured party, or lessor
injured or damaged by an act in violation of this chapter or regulations
promulgated pursuant to it, whether or not there is a conviction for the
violation, may file a civil action to recover damages based on the violation
with the following available remedies:
(1) three times the amount of actual damages or fifteen hundred
dollars, whichever is greater;
(2) equitable relief, including a temporary restraining order, a
preliminary or permanent injunction, or restitution of money or
property;
(3) reasonable attorney fees and costs and other relief the court
considers just.
Section 37-13-50. A person violating this chapter or regulations
promulgated pursuant to it is guilty of a misdemeanor and, upon conviction,
must be fined not more than five thousand dollars or imprisoned not more
than five years, or both.
Section 37-13-60. The Department of Consumer Affairs may
promulgate regulations governing:
(1) the conduct of the business of sublease arranging;
(2) licensing requirements of sublease arrangers;
(3) forms for use by sublease arrangers;
(4) maximum fees and charges which may be charged by
sublease arrangers;
(5) performance bond or other guaranty requirements from
sublease arrangers;
(6) notification requirements to interested parties notifying them
of a sublease under this chapter.
Section 37-13-70. Consistent with this chapter, the Department of
Consumer Affairs may use all powers in Chapter 6 of this title to educate
the public and enforce this chapter subject to the duties imposed on the
department in Chapter 6.
Section 37-13-80. If the Department of Consumer Affairs promulgates
regulations on licensing requirements under this chapter, it may require
payment of a licensing fee from each applicant for each location not to
exceed two hundred fifty dollars a year.
Section 37-13-90. The rights and remedies in this chapter are in
addition to other rights and remedies provided by law."
Time effective
SECTION 2. This act takes effect upon approval by the Governor.
Approved the 12th day of June, 1991. |