§ 335 — Total loss notice and waiver of the gap amount

New York § 335

• Jurisdiction: New York
• Law PEP: Personal Property
• Art. 9-A: Motor Vehicle Retail Leasing Act

Text

§ 335. Total loss notice and waiver of the gap amount. 1. If the\nretail lease agreement provides that the lessee shall be responsible\nupon a total loss of the vehicle occasioned by its theft, confiscation\nor physical damage for the gap amount, the lessor, prior to the\nexecution of the agreement, shall by a notice on a separate document\nconspicuously disclose that fact and the obligations for which the\nlessee would remain liable in the event of a theft, confiscation or\ntotal loss of the vehicle. If the lessor is required under subdivision\ntwo of this section to offer to waive its contractual right to hold the\nlessee liable for the gap amount in the event of a total loss of the\nvehicle occasioned by its theft or physical damage, the notice shall\nalso: (a) state that for a separate charge disclosed in the notice the\nlessor will waive its contractual right to hold the lessee liable for\nthe gap amount in the event of a total loss of the vehicle occasioned by\nits theft or physical damage; (b) contain a provision informing the\nlessee that he or she may as an alternative to purchasing a waiver, be\nable to purchase insurance covering the gap amount from an insurance\ncompany which has been licensed by the superintendent of financial\nservices to write motor vehicle lessee gap insurance in this state; and\n(c) contain a provision permitting the lessee to indicate whether he or\nshe wants the lessor to waive its contractual right to hold the lessee\nliable for the gap amount in the event of a total loss of the vehicle\noccasioned by its theft or physical damage. The notice shall be signed\nby the lessee. The lessor or assignee shall provide a copy of the signed\nnotice to the lessee, and shall maintain a copy in the lessor's or\nassignee's files for at least the term of the lease. Failure to provide\nthe notice and to obtain the lessee's signature as required by this\nsubdivision shall invalidate any provision of the agreement which\notherwise would obligate a lessee to pay to the holder, after a total\nloss of the motor vehicle occasioned by its theft, confiscation or\nphysical damage the gap amount. No retail lease agreement shall be\nconditioned upon the lessee's obtaining of motor vehicle lessee gap\ninsurance as set forth in subparagraph (B) of paragraph twenty-six of\nsubsection (a) of section one thousand one hundred thirteen of the\ninsurance law.\n 2. If the retail lease agreement provides that the lessee shall be\nresponsible upon a total loss of the vehicle occasioned by its theft or\nphysical damage for the gap amount, the lessor, prior to the execution\nof the agreement, shall offer to waive its contractual right to hold the\nlessee liable for the gap amount in the event of a total loss of the\nvehicle occasioned by its theft or physical damage, only if motor\nvehicle lessor gap insurance coverage is available to the lessor or the\nanticipated assignee and such coverage is obtained from a\nproperty/casualty insurance company, which has been licensed by the\nsuperintendent of financial services of this state to write motor\nvehicle lessor gap insurance in this state. This offer may be made\ncontingent upon the payment by the lessee of a separate charge that\nshall not exceed the cost of lessor gap insurance covering the retail\nlease transaction plus an administrative fee not to exceed ten dollars.\nNothing contained in this section shall be construed to authorize a\nwaiver, in connection with a transaction with respect to which lessor\ngap insurance has not been obtained, of a contractual right to hold the\nlessee liable for the gap amount in the event of a total loss of the\nvehicle occasioned by its theft or physical damage.\n 3. A lessor shall not be obligated under subdivision two of this\nsection to offer to waive its contractual right to hold the lessee\nliable for the gap amount if, during the current calendar year or during\nthe odd-numbered calendar year immediately preceding the calendar year\nin which the agreement is entered into, the lessor or the anticipated\nassignee of the lessor has received motor vehicle lessor gap insurance\ndeclination notices or other evidence of unavailability from every\ninsurance company whose name appears on the department of financial\nservices compilation of insurance companies which during that calendar\nyear were authorized to write motor vehicle lessor gap insurance in this\nstate. Evidence of these declinations shall be retained by such a lessor\nor the anticipated assignee of such a lessor for a period of six years\nafter the expiration of the calendar year in which they were issued.\n 4. In order to enable lessors or their anticipated assignees to comply\nwith the requirements imposed by subdivision two of this section, the\nsuperintendent of financial services shall compile and make available a\nperiodically updated list of those insurance companies which are\nauthorized to write motor vehicle lessor gap insurance coverage in this\nstate.\n 5. Nothing in this section shall be construed to apply to the lessor,\nor any anticipated assignee of a lessor, under a retail lease agreement\nunder which the lessee is not liable upon a total loss of the vehicle\noccasioned by its theft, confiscation or physical damage for the gap\namount.\n