§ 337. Requirements as to retail lease agreements. 1. A retail lease
agreement shall be in a writing and, except as otherwise provided in
subdivision two of section three hundred forty-five of this article,
signed contemporaneously by the lessor and the lessee. Except as
provided in sections three hundred thirty-five and three hundred
thirty-six of this article, a retail lease agreement shall contain in a
single document all the agreements of the parties.

2. The printed portion of the agreement shall be printed in at least
eight-point type in ink that contrasts with the paper used. The
agreement shall contain the following items printed or written in a size
equal to at least ten-point bold type:

(a) Both at the top of the agreement and directly above the space
reserved for the signature of the lessee, the words "LEASE AGREEMENT",
"RETAIL LEASE AGREEMENT" or "MOTOR VEHICLE LEASE AGREEMENT";

(b) A specific statement that physical damage or liability insurance
coverage for bodily injury and property damage caused to others is not
included, if that is the case; and

(c) Directly above the acknowledgment permitted by subdivision three
of this section to appear above the space reserved for the signature of
the lessee, a written notice informing the lessee that: (i) the lessee
should not sign the agreement before he or she reads it or if it
contains any blank space; and (ii) the lessee is entitled to a
completely filled in copy of the agreement when he or she signs it. A
notice substantially similar to the following notice complies with the
requirements of this paragraph: "NOTICE TO THE LESSEE: 1. Do not sign
this agreement before you read it or if it contains any blank space.

2. You are entitled to a completely filled in copy of this agreement
when you sign it."

3. The lessor shall deliver to the lessee, or mail to him or her at
his or her address shown on the agreement, a copy of the agreement
signed by the lessor. Until the lessor does so, a lessee who has not
received delivery of the motor vehicle shall have an unconditional right
to cancel the agreement and to receive an immediate refund of all
payments made and redelivery of all goods traded-in to the lessor on
account of or in contemplation of the agreement. Any acknowledgment by
the lessee of delivery of a copy of the agreement shall be printed or
written in a size equal to at least eight-point bold type and, if
contained in the agreement, shall appear directly above the legend
required by paragraph (a) of subdivision two of this section to appear
directly above the space reserved for the signature of the lessee.

4. The agreement shall contain the names of the lessor and the lessee,
the place of business of the lessor, the residence or place of business
of the lessee as specified by the lessee and a description of the motor
vehicle including its make, year model, model and identification number
or marks.

5. The agreement shall contain:

(a) All items required to be disclosed by the act of Congress entitled
"Consumer Leasing Act of 1976" and the regulations thereunder, as such
act and regulations may from time to time be amended; provided, however,
that the disclosures required by the "Consumer Leasing Act of 1976"
shall be made in all leasing transactions covered by this article
regardless of the exemption in the "Consumer Leasing Act of 1976" for
lease transactions in which the total contractual obligation exceeds
twenty-five thousand dollars;

(b) The capitalized cost, using the term "capitalized cost" and a
descriptive explanation such as "the sum of the adjusted capitalized
cost and any capitalized cost reduction. The capitalized cost and the
amount of the rental payment may be negotiable";

(c) The adjusted capitalized cost of the vehicle, using the term
"adjusted capitalized cost", a descriptive explanation such as "the
amount which is capitalized in connection with the lease and is used in
determining the amount of your periodic payment" and immediately
thereafter one of the following additional explanatory statements:

(i) In the case of an agreement which provides for an "additional
early termination charge" and whose early termination provisions
expressly refer to the "adjusted capitalized cost," a statement that
"this amount plus the additional early termination charge will be used
in determining your early termination liability";

(ii) In the case of an agreement which provides for an "additional
early termination charge" and whose early termination provisions do not
expressly refer to the "adjusted capitalized cost," a statement that
"this amount plus the additional early termination charge will be used
in determining the legal limit on your early termination liability";

(iii) In the case of an agreement which does not provide for an
"additional early termination charge" and whose early termination
provisions expressly refer to the "adjusted capitalized cost," a
statement that "this amount will be used in determining your early
termination liability"; or

(iv) In the case of an agreement which does not provide for an
"additional early termination charge" and whose early termination
provisions do not expressly refer to the "adjusted capitalized cost," a
statement that "this amount will be used in determining the legal limit
on your early termination liability";

(d) The amount, if any, included for insurance and other benefits,
specifying and describing the coverages and the amount included for each
type of coverage;

(e) In close proximity to the adjusted capitalized cost disclosure
required by paragraph (c) of this subdivision and only as applicable,
any additional early termination charge provided for under the
agreement, using the term "additional early termination charge", and one
of the following descriptive explanations:

(i) In the case of an agreement whose early termination provisions
expressly refer to the "adjusted additional early termination charge," a
descriptive explanation such as "an additional amount the unamortized
portion of which will be used in determining your early termination
liability"; or

(ii) In the case of an agreement whose provisions do not expressly
refer to the "additional early termination charge," a descriptive
explanation such as "an additional amount the unamortized portion of
which will be used in determining the legal limit on your early
termination liability"; and immediately after the descriptive
explanation additional explanatory statements that "this amount
represents the total costs and damages, in addition to the adjusted
capitalized cost, which we would incur if this agreement were to be
terminated before you had made any rental payments."

(f) In close proximity to the "adjusted capitalized cost" and
"additional early termination charge" disclosures required by paragraphs
(c) and (e) of this subdivision, one of the following statements:

(i) In the case of an agreement which provides for an "additional
early termination charge" and whose early termination provisions do not
expressly refer to either the "adjusted capitalized cost" or the
"additional early termination charge," a statement that "although they
are not referred to in the early termination provisions of this lease,
the 'adjusted capitalized cost' and the 'additional early termination
charge' may be used to compare the early termination provisions of
competing lessors";

(ii) In the case of an agreement which provides for an "additional
early termination charge" and whose early termination provisions do not
expressly refer to the "additional early termination charge," a
statement that "although the 'additional early termination charge' is
not referred to in the early termination provisions of this lease, the
'additional early termination charge' and the 'adjusted capitalized
cost' may be used to compare the early termination provisions of
competing lessors";

(iii) In the case of an agreement which provides for an "additional
early termination charge" and whose early termination provisions do not
expressly refer to the "adjusted capitalized cost," a statement that
"although the 'adjusted capitalized cost' is not referred to in the
early termination provisions of this lease, the 'adjusted capitalized
cost' and the 'additional early termination charge' may be used to
compare the early termination provisions of competing lessors";

(iv) In the case of an agreement which provides for an "additional
early termination charge" and whose early termination provisions
expressly refer to both the "adjusted capitalized cost," and the
"additional early termination charge," a statement that "the 'adjusted
capitalized cost' and the 'additional early termination charge' may be
used to compare the early termination provisions of competing lessors";

(v) In the case of an agreement which does not provide for any
"additional early termination charge" and whose early termination
provisions do not expressly refer to the "adjusted capitalized cost," a
statement that "although the 'adjusted capitalized cost' is not referred
to in the early termination provisions of this lease, the 'adjusted
capitalized cost' may be used to compare the early termination
provisions of competing lessors"; or

(vi) In the case of an agreement which does not provide for any
"additional early termination charge" and whose early termination
provisions expressly refer to the "adjusted capitalized cost," a
statement that "the 'adjusted capitalized cost' may be used to compare
the early termination provisions of competing lessors."

(g) A statement in at least eight-point bold type informing the lessee
that he or she has the right to terminate the agreement voluntarily at
any time after the first fifty percent of the total number of months
constituting the full scheduled lease term, or earlier if the agreement
so provides, if he or she is in full compliance with the terms of the
agreement and satisfies his or her early termination obligation;

(h) A statement in at least eight-point bold type to the effect that
"early termination may require you to pay a substantial charge";

(i) A statement in at least eight-point bold type stating that the
lessee shall not be liable for an early termination fee if he or she has
deceased before the end of the lease;

(j) A provision permitting a lessee whose default consists solely of
the failure to make timely rental payments to cure his or her default
and reinstate the agreement, without losing any rights or options
previously acquired under the agreement, by paying all past due rental
and delinquency charges and, if the agreement so provides, a
reinstatement fee not to exceed ten dollars and the actual and
reasonable costs of repossession, storage, pickup and redelivery within
twenty-five days after the lessee is sent written notice of his or her
reinstatement rights. The reinstatement right granted pursuant to this
paragraph may be restricted to a lessee who has not previously been
afforded the opportunity to reinstate the agreement. For purposes of
this paragraph, a rental charge is past due if it is not paid by its
scheduled due date or within any grace period specified in the
agreement;

(k) The estimated residual value of the vehicle, using the term
"estimated residual value";

* (l) In the case of an agreement which does not obligate the lessee
upon a total loss of the vehicle occasioned by its theft or physical
damage for any of the items specified in paragraphs (e) and (f) of
subdivision one of section three hundred forty-one of this article, a
conspicuous notice that the lessee has no such obligation.

* NB There are 2 par (l)'s

* (l) The liability of the lessee in the case of a total loss of the
vehicle or the vehicle is rendered inoperable. Disclosure of liability
pursuant to this paragraph shall include the financial liability of the
lessee and the lessor's rules, policies and procedures in the event the
car is declared a total loss or rendered inoperable during the term of
the lease.

* NB There are 2 par (l)'s

Nothing in this subdivision prevents a holder from attempting to
repossess a vehicle, accepting its voluntary surrender or selling it
during the reinstatement period, but such a repossession, voluntary
surrender, or sale shall not affect the reinstatement right of the
lessee. Upon reinstatement, the holder shall provide the lessee with the
same vehicle leased by the lessee prior to reinstatement or, if that
vehicle is not available, a substitute vehicle of comparable worth,
quality and condition.

6. (a) (i) The amount, if any, included for liability insurance or
insurance on the vehicle, shall not exceed the premiums charged by the
insurance company for such insurance. The holder, if the cost of
liability insurance or insurance on the motor vehicle is included in a
retail lease agreement and the policy or policies are delivered to the
holder, shall within thirty days after execution of the retail lease
agreement, send or cause to be sent to the lessee a copy of the policy
or policies of insurance, issued by an insurance company authorized to
do that kind of insurance business in this state, clearly setting forth
the amount of the premium, the kind or kinds of insurance and the scope
of the coverage and all the terms, exceptions, limitations, restrictions
and conditions of the contract or contracts of insurance.

(ii) The lessee of a motor vehicle under a retail lease agreement
shall have the privilege of purchasing such insurance from an agent or
broker of his or her own selection and of selecting an insurance company
acceptable to the lessor; provided, however, that the inclusion of the
insurance premium in the retail lease agreement when the lessee selects
the agent, broker or company, shall be optional with the lessor and in
such case the lessor or assignee shall have no obligation to send, or
cause to be sent, to the lessee a copy of the policy of insurance.

(b) If any such policy of liability insurance or insurance on the
motor vehicle is cancelled, the unearned insurance premium refund
received or receivable by the holder of the agreement or, if the amount
included therefor in the agreement exceeds the cost to the holder of the
agreement for such insurance, the unearned portion of the amount so
included, shall be either: (i) refunded to the lessee within ten
business days after it is received by the holder; or (ii) credited,
together with the unearned portion of the lease charge applicable
thereto, to the final maturing rental payments or, at the option of the
holder, to the end of term obligations under the retail lease agreement
except to the extent applied toward payment for similar insurance
protecting the interests of the lessee and the holder of the agreement
or either of them, provided that no such credit or refund need be made
if the amount thereof would be less than one dollar.

(c) The amount, if any, included for group credit insurance or for
insurance other than gap insurance, liability insurance or insurance on
the motor vehicle shall not exceed the premiums charged by the insurance
company for such insurance. If such group credit or other insurance is
cancelled the refund for unearned insurance premiums received or
receivable by the holder of the agreement, or the excess of the amount
included in the agreement for group credit or other insurance over the
premiums paid or payable by the holder of the agreement therefor shall
be either: (i) refunded to the lessee within ten business days after it
is received by the holder; or (ii) credited, together with, in either
case, the unearned portion of the lease charge applicable thereto, to
the final maturing rental payments or, at the option of the holder, to
the end of term obligations under the retail lease agreement, provided
that no such credit or refund need be made if the amount thereof would
be less than one dollar.

(d) The amount of any separate charge included for a waiver by the
lessor of its contractual right to hold the lessee liable for the gap
amount shall not exceed the cost of lessor gap insurance covering the
retail lease transaction.

7. (a) If the lessee is obligated in connection with the lease to
maintain liability insurance or insurance on the motor vehicle that is
the subject of the agreement and if subsequent to the execution of the
agreement the lessee fails to maintain the required insurance, the
holder may make advances to procure the equivalent limits of insurance
for either the interests of the lessee and the holder or the interest of
either of them, and any amount so advanced may be the subject of a lease
charge as though such amount was part of the initial lease value.

(b) If under subdivision two of section three hundred thirty-five of
this article, the lessor waives its contractual right to hold the lessee
liable for the gap amount, and lessor gap insurance coverage which the
lessor or holder purchased in connection with the transaction
subsequently is terminated prior to the filing of a claim due to the
insolvency of the insurance company, notwithstanding the provisions of
paragraph three of subsection (b) of section one thousand one hundred
one of the insurance law the holder may make an advance to procure
equivalent limits of lessor gap insurance covering the transaction and
any amount so advanced may be the subject of a lease charge as though
such amount was part of the capitalized cost.

(c) Each amount so advanced shall be subject to the default provisions
of the lease agreement if so provided in the agreement and if the holder
notifies the lessee in writing of the advance of such amount and of his
or her option to repay such amount in any one of the following ways:

(i) Full payment within ten days from the date of giving or mailing
the notice;

(ii) Full amortization during the term of the insurance or the
remaining term of the agreement, at the option of the holder;

(iii) If offered by the holder, as a final balloon payment payable one
month after the last scheduled payment under the agreement;

(iv) If offered by the holder, full amortization after the term of the
agreement, to be made in periodic payments which do not exceed the
average periodic payment under the agreement; or

(v) If offered by the holder, any other amortization plan.

If the lessee neither pays in full the amount so advanced nor notifies
the holder in writing of his or her choice regarding the amortization
options before the expiration of ten days from the date of giving or
mailing the notice by the holder, the holder shall amortize the amount
so advanced pursuant to subparagraph (ii) of paragraph (c) of this
subdivision.

8. (a) The holder of a retail lease agreement may, if the agreement so
provides, collect a delinquency and collection charge on each rental
payment in default for a period not less than ten days in an amount not
in excess of the amount or amounts agreed to in the agreement. In
addition to a delinquency and collection charge, the retail lease
agreement may provide for the payment of reasonable attorneys' fees not
exceeding fifteen percent of the amount due and payable under the
agreement where the agreement is referred to an attorney not a salaried
employee of the holder of the agreement for collection, plus the court
costs.

(b) The holder may not assess or collect a delinquency and collection
charge under paragraph (a) of this subdivision on a rental payment,
which payment is otherwise a full payment for the applicable period and
is paid within ten days after its scheduled or deferred due date, when
the only delinquency is attributable to delinquency and collection
charges assessed on an earlier rental payment or payments.

9. No retail lease agreement shall be signed by any party thereto when
it contains blank spaces to be filled in after it has been signed except
that, if delivery of the motor vehicle is not made at the time of the
execution of the agreement, the identifying numbers or marks of the
motor vehicle or similar information and the due date of the first
payment may be inserted in the agreement after its execution. The
lessee's written acknowledgment, conforming to the requirements of
subdivision three of this section, of delivery of a copy of the
agreement shall be conclusive proof of such delivery and of compliance
with this subdivision in any action or proceeding by or against an
assignee of the agreement without knowledge to the contrary when he or
she purchases the agreement.

10. No retail lease agreement shall contain any provision by which the
lessee agrees not to assert against a holder a claim or defense or
require or entail the execution of any note or series of notes which,
when separately negotiated, will cut off as to third parties any right
of action or defense which the lessee may have against the lessor. The
holder of a retail lease agreement shall be subject to all claims and
defenses of the lessee against the lessor arising from the lease
notwithstanding any agreement to the contrary, but the holder's
liability under this subdivision shall not exceed the amount owing to
the holder at the time the claim or defense is asserted against the
holder. The holder shall have recourse against the lessor to the extent
of any liability incurred by the holder pursuant to this subdivision
regardless of whether the assignment of the agreement was with or
without recourse.

11. Notwithstanding any contrary provision of this chapter, the lien
law, banking law or other law: (a) a person may purchase a retail lease
agreement from a lessor on such terms and conditions and for such price
as may be mutually agreed upon; and (b) no filing of the assignment, no
notice to the lessee of the assignment, and no requirement that the
lessor be deprived of dominion over payments upon the agreement or over
the vehicle if repossessed by or returned to the lessor, shall be
necessary to the validity of a written assignment of a retail lease
agreement as against creditors, subsequent purchasers, pledgees,
mortgagees or encumbrancers of the lessor.

12. Unless the lessee has notice of actual or intended assignment of a
retail lease agreement, payment thereunder made by the lessee to the
last known holder of such agreement shall be binding upon all subsequent
holders or assignees. A notification which does not reasonably identify
the rights assigned is ineffective. If requested by the lessee, the
assignee shall furnish reasonable proof that the assignment has been
made and unless he or she does so the lessee may pay the original
lessor.

13. (a) Upon written request from the lessee, the holder of a retail
lease agreement shall give or forward to the lessee a written statement
of the dates and amounts of the rental payments that have been made
under the agreement and the total amount of the remaining rental
payments. A lessee shall be given a written receipt for any payment when
made in cash.

(b) Upon written request from a lessee who is then entitled to
terminate the agreement early, the holder of a retail lease agreement
shall give or forward to the lessee a written statement of his or her
gross early termination liability under the agreement.

14. No retail lease agreement shall contain any provision applicable
to a natural person who leases a vehicle primarily for personal, family
or household use by which:

(a) in the absence of the lessee's default, the holder may,
arbitrarily and without reasonable cause, accelerate the maturity of any
part or all of the amount owing thereon;

(b) a power of attorney is given to confess judgment, or an assignment
of wages is given;

(c) the lessor or holder of the agreement or other person acting on
his or her behalf is given authority to enter upon the lessee's premises
unlawfully, or to commit any breach of the peace in the repossession of
the motor vehicle;

(d) the lessee waives any right of action against the lessor or holder
of the agreement, or other person acting on his or her behalf, for any
illegal act committed in the collection of payments under the agreement
or in the repossession of the motor vehicle;

(e) the lessee executes a power of attorney appointing the lessor or
holder of the agreement, or other person acting on his or her behalf, as
the lessee's agent in collection of payments under the agreement or in
the repossession of the motor vehicle; provided, however, that this
paragraph shall not prohibit the inclusion in a retail lease agreement
of a limited power of attorney or other provision authorizing the holder
to execute in the name of the lessee any proofs of insurance claims or
losses or to endorse the name of the lessee on any insurance settlement
draft or check;

(f) the lessor is relieved from liability for any legal remedy which
the lessee may have had against the lessor under the agreement, or any
separate instrument executed in connection therewith;

(g) the maturity of any part or all of the amount owing thereon is
accelerated where, following a default consisting solely of the failure
to make timely rental payments, a lessee who has the right to reinstate
the agreement makes timely tender of an amount which would be sufficient
to reinstate the agreement under paragraph (i) of subdivision five of
this section;

(h) the lessee waives any right to a trial by jury in any action or
proceeding arising out of the agreement; or

(i) a lessee who is not in default of his or her obligations under the
agreement would be prohibited from terminating the agreement at any time
after the expiration of the first fifty percent of the total number of
months of the lease term. The exercise of this right to terminate early
voluntarily is contingent upon the lessee discharging fully his or her
liability under the early termination provisions of the agreement.

15. Any such prohibited provision shall be void but shall not
otherwise affect the validity of the agreement.

16. Where necessary to ensure consistency with the pronoun usage in
the underlying agreement, any language required by this article to be
used in connection with a required disclosure may be modified to refer
to the lessee in the first person and the holder in the second person.