N.Y. Personal Property Law § 340: Establishment of realized value at lease termination when purchase option not exercised; notice of intention to sell motor vehicle

§ 340. Establishment of realized value at lease termination when

purchase option not exercised; notice of intention to sell motor

vehicle. 1. If an agreement is terminated early and there is no option

to purchase the vehicle or the lessee does not exercise any option he or

she may have to purchase the vehicle, or if the lessee's liability at

the scheduled end of the lease term is based upon the estimated residual

value of the vehicle and the lessee does not exercise any option he or

she may have to purchase the vehicle, the holder shall act in a

commercially reasonable manner when disposing of the vehicle or

obtaining cash bids for the purpose of establishing the realized value

of the vehicle, which may be its value in the customary wholesale

market. A lessee whose agreement is terminated early without the

exercise of a purchase option or whose liability at the scheduled end of

the lease term is based upon the estimated residual value of the vehicle

may obtain, at his or her expense, a professional appraisal by an

independent third party agreed to by the lessee and the holder of the

wholesale value which could be realized at sale of the leased vehicle.

If a professional appraisal is obtained by such a lessee, the appraised

value shall be final and binding upon the parties and shall be used as

the realized value in determining the liability of the lessee at early

termination or at the scheduled end of the lease term.

2. If an agreement is terminated early and there is no option to

purchase the vehicle or the lessee does not exercise any option he or

she may have to purchase the vehicle, or if the lessee's liability at

the scheduled end of the lease term is based upon the estimated residual

value of the vehicle and the lessee does not exercise any option he or

she may have to purchase the vehicle, the holder shall give the lessee

at least ten days written notice of its intention to sell the motor

vehicle. A notice of intention to sell the vehicle need not be given if

the holder and lessee have agreed in writing to the amount of the

lessee's liability under the retail lease agreement after the lessee

returns the vehicle to the holder or the lessee has fully satisfied his

or her obligations under the agreement. A holder gives notice to the

lessee under this subdivision when he or she delivers the notice to the

lessee or mails the notice to him or her at his or her last known

address.

3. The notice of intention to sell the vehicle shall set forth

separately any charges or sums due under the agreement and shall clearly

and conspicuously state that the lessee will be liable for the

difference between the estimated residual value of the vehicle and its

realized value, if such liability exists. The notice also shall state

that the lessee has the right to submit a cash bid for the purchase of

the vehicle.