§ 334 — Payment or trade-in pending execution of lease agreement; refund or return upon non-execution

§ 334. Payment or trade-in pending execution of lease agreement;\nrefund or return upon non-execution. 1. Any payment made by cash, check\nor similar means to a lessor pending the execution of a retail lease\nagreement shall be refunded to the lessee in the event the lease\nagreement is not executed. Any refund required by this subdivision shall\nbe made by the lessor within fifteen business days after the lease\napplication is rejected by the lessor or the prospective assignee.\n 2. If a lessee is required to make a payment to a lessor by cash,\ncheck or similar means pending the execution of a retail lease\nagreement, the lessor shall notify the lessee in writing that the lessee\nhas the right, if the lease application is not approved, to have any\ntraded-in vehicle returned promptly and receive a prompt refund of any\npayments made.\n 3. If a lessee leaves his motor vehicle with the lessor in lieu of or\nin addition to a payment by cash, check or similar means, and the lessor\nand lessee agree that the parties shall enter into a retail lease\nagreement, the lessor shall not sell or transfer the vehicle traded-in\nuntil the lessee and the lessor execute a retail lease agreement. In the\nevent a lease agreement is not executed, the lessor shall promptly\nreturn to the lessee the vehicle traded-in.\n 4. The provisions of this section shall not apply to any fee charged,\nreceived or collected by a holder in connection with the assumption of\nan existing retail lease agreement.\n 5. The provisions of this section shall not apply to the sale of a\nmotor vehicle by a prospective lessee to a prospective lessor under a\nseparate contract of sale for the price specified in the contract if\nsuch contract is executed before the parties have consummated a retail\nlease agreement, is in writing, is dated as of the date of the sale and\nis signed by the parties. To be exempt under the provisions of this\nsubdivision, such agreement shall also:\n (a) clearly and conspicuously disclose to the seller that the sale\nprice for the vehicle establishes its value for purposes of determining\nthe amount the lessor will credit as a "capitalized cost reduction"\nunder any retail lease agreement subsequently consummated by the parties\nor as the amount due to the lessee for the vehicle in the event the\nparties fail to consummate a retail lease agreement;\n (b) contain a conspicuous clause that is initialled separately by the\nprospective lessee whereby such lessee agrees to leave the amount of the\npurchase price on deposit with the prospective lessor pending the\nconsummation of a retail lease agreement for a currently produced model\nyear vehicle that is to be ordered specially from the manufacturer or\nfor a model year vehicle that is not yet in production as of the date of\nthe sale of the lessee's vehicle; and\n (c) stipulate that seventy-five days after the date of the sale, the\nprospective lessee shall be entitled on demand to payment of the agreed\nupon price for the vehicle unless within that time the parties have\nconsummated a separate retail lease agreement or have agreed to an\nearlier payment of the price to the lessee.\n