§ 343 — Assessment of excess wear and damage to the vehicle

§ 343. Assessment of excess wear and damage to the vehicle. 1. (a)\nUpon the scheduled termination of a retail lease agreement, the holder\nshall not charge, receive or collect a charge for excess wear and damage\nto the vehicle which exceeds: (i) the actual cost of repairs, reduced by\nall discounts, paid by the holder; or (ii) a true itemized estimate of\nthe cost of such repairs by an appraiser licensed pursuant to section\nthree hundred ninety-eight-d of the vehicle and traffic law selected by\nthe holder, of the cost of such repairs.\n (b) Upon early termination of a retail lease agreement, the holder\nshall not charge, receive or collect a charge for excess wear and damage\nto the vehicle which exceeds the actual costs of repairs, reduced by all\ndiscounts, paid by the holder.\n 2. In order for a holder to impose a charge for excess wear and damage\nto a vehicle subject to a retail lease agreement, such agreement shall\ncontain a clause describing the excess wear and damage to the vehicle\nfor which the lessee may be liable. Such holder shall, not more than\nforty days nor less than twenty days prior to the scheduled termination\ndate, or, not more than ten business days after the date of an early\ntermination of a lease agreement, mail or deliver to the lessee a notice\nadvising the lessee of the following rights and obligations of the\nparties, herein granted and imposed:\n (a) Such notice shall include the following statement, as set forth\nherein, at the beginning of the notice in at least ten-point bold type:\n "YOUR LEASE AGREEMENT ALLOWS (HOLDER) TO ASSESS A\n CHARGE FOR EXCESS WEAR AND DAMAGE TO THE VEHICLE.\n YOU SHOULD OBTAIN YOUR OWN EVIDENCE OF THE CURRENT\n CONDITION OF THE VEHICLE NOT MORE THAN TWENTY (20)\n DAYS PRIOR TO THE SCHEDULED TERMINATION OF YOUR\n LEASE. YOU ALSO WILL HAVE THE RIGHT TO SUBMIT\n DISPUTES TO THE ALTERNATE ARBITRATION MECHANISM\n ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW\n YORK STATE ATTORNEY GENERAL."\n (b) In the case of a scheduled termination, of the lessee's right to\nturn the vehicle in with a copy of an itemized appraisal of excess wear\nand damage to the vehicle prepared by an appraiser licensed under\nsection three hundred ninety-eight-d of the vehicle and traffic law,\nselected by the lessee and conducted not more than twenty days prior to\nthe scheduled termination date;\n (c) Of the right of the holder to, within thirty days after the date\non which the vehicle comes into the actual physical possession of the\nholder, obtain a written itemized appraisal of excessive wear and damage\nto the vehicle prepared by an appraiser licensed under section three\nhundred ninety-eight-d of the vehicle and traffic law selected by the\nholder;\n (d) That if the lessee had not previously obtained and submitted to\nthe holder a written itemized appraisal on the lessee's own behalf in\naccordance with paragraph (b) of this subdivision, the lessee will have\nthe greater of ten business days after the lessee has received or\nfourteen business days to do so after the holder has sent, in\nconformance with subdivision three of this section, an itemized bill for\nexcess wear and damage and a copy of the itemized appraisal prepared on\nbehalf of the holder, unless the lessee does not dispute any of the\nitems contained therein. In the case where the holder bases the charge\nfor excess wear and damage on the actual cost of repairs, the notice\nshall also inform the lessee that should the lessee fail to obtain an\nitemized written appraisal, he or she is entitled to dispute only\nwhether any items claimed exist and/or are excess wear and damage to the\nvehicle, but not the actual cost of making the repairs;\n (e) That if the lessee disputes that any of the items claimed for\nexcess wear and damage to the vehicle exist or are excessive in nature,\nthe lessee may submit the dispute within sixty days of the date on which\nthe vehicle comes into the actual physical possession of the holder to\nthe holder's informal dispute settlement procedure, if any, or, upon the\npayment of the prescribed filing fee which is refundable if the\narbitrator finds in the lessee's favor, to an alternative arbitration\nmechanism established under regulations promulgated by the attorney\ngeneral of the state of New York;\n (f) That if there exists a discrepancy between the itemized appraisals\nobtained by the holder and the lessee, if any, the holder shall submit\nthe dispute within sixty days of the date on which the vehicle comes\ninto the actual physical possession of the holder to the holder's\ninformal dispute settlement procedure, if any, unless the lessee\nexercises the option granted by paragraph (b) of subdivision five of\nthis section; provided, however, that in the event the holder has\ncomplied with the provisions of this subdivision, a lessee who has\nfailed to obtain an itemized appraisal of the excessive wear and damage\nto the vehicle in accordance with either paragraph (b) or (c) of this\nsubdivision may dispute only the existence of any item or whether the\nwear is excessive in nature, but may not dispute the actual cost of\nrepairs.\n 3. (a) Itemized bill. (i) In the event that the holder wishes to\nimpose a charge for excess wear and damage to the vehicle, the holder\nshall send by registered mail or hand-deliver to the lessee a bill\ncontaining an itemized list of the estimated or actual cost of repairing\nor replacing each item as to which an excess wear and damage charge is\nclaimed and specifying the address to which any response must be mailed.\nThe bill shall be mailed or hand-delivered to the lessee within thirty\ndays after the date on which the vehicle comes into the actual\npossession of the holder.\n (ii) The itemized bill shall include the following statements printed\nin at least ten-point type: "You are being asked to pay an amount\nclaimed for excess wear and damage to the vehicle. If you wish to\ncontest this amount, you must obtain an itemized appraisal from an\nappraiser licensed by the New York State Department of Motor Vehicles,\nand mail or deliver a copy of such appraisal to (NAME AND ADDRESS OF\nHOLDER) within the greater of fourteen business days after (NAME OF\nHOLDER) has sent, or ten business days of receipt of this bill and (NAME\nOF HOLDER'S) itemized appraisal. If you fail to do so, you will forfeit\nyour right to contest in arbitration any actual repair costs incurred by\nthe (HOLDER) for excess wear and damage; however, you do not forfeit\nyour right to contest the existence of any item or whether the wear is\nexcessive in nature."\n (iii) The itemized bill shall also notify lessees of their material\nrights and obligations for dispute resolution in arbitration.\n (b) Itemized appraisal. (i) A holder who imposes a charge for excess\nwear and damage to the vehicle shall send by registered mail or\nhand-deliver, within thirty days after the date on which the vehicle\ncomes into actual physical possession of the holder, a written itemized\nappraisal prepared by an appraiser licensed under section three hundred\nninety-eight-d of the vehicle and traffic law. The appraisal shall be\ndated, signed by the holder or its agent, and identify by type each item\nof excess wear and damage.\n (ii) The following notice shall be included at the beginning of the\nitemized appraisal prepared on behalf of the holder and furnished to the\nlessee,\n "ALL ITEMS OF DAMAGE FOR WHICH A CHARGE FOR\n EXCESSIVE WEAR OR DAMAGE WILL BE CLAIMED BY THE\n HOLDER MUST BE NOTED IN THIS APPRAISAL. IF YOU\n DISPUTE THE EXISTENCE OR NATURE OF ANY ITEM OF\n DAMAGE IDENTIFIED IN THIS NOTICE, YOU MAY SUBMIT THE\n DISPUTE TO THE ALTERNATE ARBITRATION MECHANISM\n ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW\n YORK STATE ATTORNEY GENERAL."\n 4. (a) The itemized bill and appraisal required by subdivision three\nof this section may be combined into a single document. Mere\nacknowledgement by the lessee of receipt of an itemized bill, an\nappraisal, or a combination of the two shall not operate as an admission\nof the existence, nature or amount of any of the items therein.\n (b) (i) The holder shall grant the lessee access to the vehicle at a\nreasonable time and place in order for the lessee to obtain an itemized\nappraisal on the lessee's own behalf. The holder shall not be required,\nhowever, to deliver the vehicle to, or produce the vehicle at, a\ndestination designated by the lessee for such purpose.\n (ii) A holder may not fail to provide, either intentionally or by\nactions or omissions, reasonable access to the vehicle by the licensed\nappraiser chosen by the lessee within the period during which a lessee\nmust obtain and submit an appraisal. If the holder fails to so provide\nreasonable access to the vehicle, the holder shall be deemed to have\nforfeited its contractual right to charge, receive or collect any charge\nfor excessive wear and damage to the vehicle from the lessee.\n (c) A lessor or holder of a retail lease agreement shall not report an\nunsatisfied claim for excess wear and damage to a credit reporting\nagency as a derogatory item of information until: (i) the expiration of\nthe time granted under article seventy-five of the civil practice law\nand rules for the filing of a petition to vacate or modify an\narbitrator's award; (ii) the issue has been a subject of a final\njudgment; or (iii) where the holder and the lessee execute a settlement,\nthirty days after the date a payment is due under the settlement if no\npayment has been made.\n 5. (a) Arbitration and enforcement. If a holder has established or\nparticipates in an informal dispute settlement procedure which is\nconsistent in all respects with the provisions of part seven hundred\nthree of title sixteen of the code of federal regulations, any dispute,\ndisparity or conflict between any appraisal report prepared by an\nappraiser licensed by the state department of motor vehicles on behalf\nof the holder and one prepared on behalf of the lessee shall be decided\nby such informal dispute settlement procedure. Holders utilizing\ninformal dispute settlement procedures pursuant to this subdivision\nshall insure that the arbitrators participating in such informal dispute\nsettlement procedures are familiar with the provisions of this section.\n (b) Upon the payment of a prescribed filing fee, a consumer shall have\nthe option of submitting any dispute arising under this section to an\nalternate arbitration mechanism established pursuant to regulations to\nbe promulgated hereunder by the attorney general. Upon application of\nthe consumer and payment of the filing fee, the holder shall submit to\nsuch alternate arbitration. Such alternate arbitration shall be\nconducted by a professional arbitrator or arbitration firm appointed by\nand under regulations established by the attorney general. Such\nalternate arbitration mechanism shall ensure the personal objectivity of\nits arbitrators and the right of each party to present its case, to be\nin attendance during any presentation made by the other party and to\nrebut or refute such presentation. In all other respects, such alternate\narbitration mechanism shall be governed by article seventy-five of the\ncivil practice law and rules. Holder or lessee shall have thirty days\nfrom the date of mailing of a copy of the arbitrator's decision to such\nholder or lessee to comply with the terms of such decision.\n (c) In no event shall any person who has participated in an informal\ndispute settlement procedure be precluded from seeking the rights or\nremedies available to such person under applicable law.\n (d) Nothing in this section shall be deemed to prohibit: (i) the\nholder and the lessee from agreeing upon termination of the agreement to\nthe payment by the lessee, in satisfaction of his or her obligation\nunder the provisions of the agreement, of an amount which the lessor and\nthe lessee agree is a reasonable figure to compensate for damage to the\nvehicle; (ii) the holder from retaining any portion of a security\ndeposit in satisfaction of amounts owed to the holder that are not\nattributable to excess wear and tear; or (iii) to restrict or otherwise\nregulate the assessment of charges for excess mileage.\n