§ 5-10-603 — Liability damage waivers - fees

(1) In addition to the other
charges permitted by this part 6, the parties may contract for a liability waiver fee
not to exceed the greater of ten percent of any periodic lease payment due or two
dollars in the case of any rental purchase agreement with weekly or biweekly
renewal dates, and not to exceed the greater of ten percent of any periodic lease
payment due or five dollars in the case of any rental purchase agreement with
monthly renewal dates. The selling or offering for sale of a liability damage waiver
pursuant to this article is subject to the following prohibitions and requirements:

(a) A lessor may not sell or offer to sell a liability damage waiver unless all
restrictions, conditions, and exclusions are printed in the rental purchase
agreement, or in a separate agreement, in eight-point type, or larger, or written in
pen and ink or typewritten in or on the face of the rental purchase agreement in a
blank space provided therefor. The liability damage waiver may exclude only loss or
damage to the property which is the subject of the rental purchase agreement due
to moisture, scratches, mysterious disappearance, vandalism, abandonment of the
property, or due to any other damages caused intentionally by the lessee or which
result from the lessee's willful or wanton misconduct.

(b) 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 eight-point boldface type the following notice:

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 THE
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.

(c) The restrictions, conditions, and exclusions of the liability damage waiver
must be disclosed on a separate agreement, sheet, or handout given to the lessee
prior to entering into the rental purchase agreement. The separate contract, sheet,
or handout must be signed, or otherwise acknowledged by the lessee as being
received prior to entering into the rental purchase agreement.

Legislative History

Source: L. 90: Entire article added, p. 372, � 1, effective January 1, 1991.