N.Y. Personal Property Law § 343: Assessment of excess wear and damage to the vehicle

§ 343. Assessment of excess wear and damage to the vehicle. 1. (a)

Upon the scheduled termination of a retail lease agreement, the holder

shall not charge, receive or collect a charge for excess wear and damage

to the vehicle which exceeds: (i) the actual cost of repairs, reduced by

all discounts, paid by the holder; or (ii) a true itemized estimate of

the cost of such repairs by an appraiser licensed pursuant to section

three hundred ninety-eight-d of the vehicle and traffic law selected by

the holder, of the cost of such repairs.

(b) Upon early termination of a retail lease agreement, the holder

shall not charge, receive or collect a charge for excess wear and damage

to the vehicle which exceeds the actual costs of repairs, reduced by all

discounts, paid by the holder.

2. In order for a holder to impose a charge for excess wear and damage

to a vehicle subject to a retail lease agreement, such agreement shall

contain a clause describing the excess wear and damage to the vehicle

for which the lessee may be liable. Such holder shall, not more than

forty days nor less than twenty days prior to the scheduled termination

date, or, not more than ten business days after the date of an early

termination of a lease agreement, mail or deliver to the lessee a notice

advising the lessee of the following rights and obligations of the

parties, herein granted and imposed:

(a) Such notice shall include the following statement, as set forth

herein, at the beginning of the notice in at least ten-point bold type:

"YOUR LEASE AGREEMENT ALLOWS (HOLDER) TO ASSESS A

CHARGE FOR EXCESS WEAR AND DAMAGE TO THE VEHICLE.

YOU SHOULD OBTAIN YOUR OWN EVIDENCE OF THE CURRENT

CONDITION OF THE VEHICLE NOT MORE THAN TWENTY (20)

DAYS PRIOR TO THE SCHEDULED TERMINATION OF YOUR

LEASE. YOU ALSO WILL HAVE THE RIGHT TO SUBMIT

DISPUTES TO THE ALTERNATE ARBITRATION MECHANISM

ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW

YORK STATE ATTORNEY GENERAL."

(b) In the case of a scheduled termination, of the lessee's right to

turn the vehicle in with a copy of an itemized appraisal of excess wear

and damage to the vehicle prepared by an appraiser licensed under

section three hundred ninety-eight-d of the vehicle and traffic law,

selected by the lessee and conducted not more than twenty days prior to

the scheduled termination date;

(c) Of the right of the holder to, within thirty days after the date

on which the vehicle comes into the actual physical possession of the

holder, obtain a written itemized appraisal of excessive wear and damage

to the vehicle prepared by an appraiser licensed under section three

hundred ninety-eight-d of the vehicle and traffic law selected by the

holder;

(d) That if the lessee had not previously obtained and submitted to

the holder a written itemized appraisal on the lessee's own behalf in

accordance with paragraph (b) of this subdivision, the lessee will have

the greater of ten business days after the lessee has received or

fourteen business days to do so after the holder has sent, in

conformance with subdivision three of this section, an itemized bill for

excess wear and damage and a copy of the itemized appraisal prepared on

behalf of the holder, unless the lessee does not dispute any of the

items contained therein. In the case where the holder bases the charge

for excess wear and damage on the actual cost of repairs, the notice

shall also inform the lessee that should the lessee fail to obtain an

itemized written appraisal, he or she is entitled to dispute only

whether any items claimed exist and/or are excess wear and damage to the

vehicle, but not the actual cost of making the repairs;

(e) That if the lessee disputes that any of the items claimed for

excess wear and damage to the vehicle exist or are excessive in nature,

the lessee may submit the dispute within sixty days of the date on which

the vehicle comes into the actual physical possession of the holder to

the holder's informal dispute settlement procedure, if any, or, upon the

payment of the prescribed filing fee which is refundable if the

arbitrator finds in the lessee's favor, to an alternative arbitration

mechanism established under regulations promulgated by the attorney

general of the state of New York;

(f) That if there exists a discrepancy between the itemized appraisals

obtained by the holder and the lessee, if any, the holder shall submit

the dispute within sixty days of the date on which the vehicle comes

into the actual physical possession of the holder to the holder's

informal dispute settlement procedure, if any, unless the lessee

exercises the option granted by paragraph (b) of subdivision five of

this section; provided, however, that in the event the holder has

complied with the provisions of this subdivision, a lessee who has

failed to obtain an itemized appraisal of the excessive wear and damage

to the vehicle in accordance with either paragraph (b) or (c) of this

subdivision may dispute only the existence of any item or whether the

wear is excessive in nature, but may not dispute the actual cost of

repairs.

3. (a) Itemized bill. (i) In the event that the holder wishes to

impose a charge for excess wear and damage to the vehicle, the holder

shall send by registered mail or hand-deliver to the lessee a bill

containing an itemized list of the estimated or actual cost of repairing

or replacing each item as to which an excess wear and damage charge is

claimed and specifying the address to which any response must be mailed.

The bill shall be mailed or hand-delivered to the lessee within thirty

days after the date on which the vehicle comes into the actual

possession of the holder.

(ii) The itemized bill shall include the following statements printed

in at least ten-point type: "You are being asked to pay an amount

claimed for excess wear and damage to the vehicle. If you wish to

contest this amount, you must obtain an itemized appraisal from an

appraiser licensed by the New York State Department of Motor Vehicles,

and mail or deliver a copy of such appraisal to (NAME AND ADDRESS OF

HOLDER) within the greater of fourteen business days after (NAME OF

HOLDER) has sent, or ten business days of receipt of this bill and (NAME

OF HOLDER'S) itemized appraisal. If you fail to do so, you will forfeit

your right to contest in arbitration any actual repair costs incurred by

the (HOLDER) for excess wear and damage; however, you do not forfeit

your right to contest the existence of any item or whether the wear is

excessive in nature."

(iii) The itemized bill shall also notify lessees of their material

rights and obligations for dispute resolution in arbitration.

(b) Itemized appraisal. (i) A holder who imposes a charge for excess

wear and damage to the vehicle shall send by registered mail or

hand-deliver, within thirty days after the date on which the vehicle

comes into actual physical possession of the holder, a written itemized

appraisal prepared by an appraiser licensed under section three hundred

ninety-eight-d of the vehicle and traffic law. The appraisal shall be

dated, signed by the holder or its agent, and identify by type each item

of excess wear and damage.

(ii) The following notice shall be included at the beginning of the

itemized appraisal prepared on behalf of the holder and furnished to the

lessee,

"ALL ITEMS OF DAMAGE FOR WHICH A CHARGE FOR

EXCESSIVE WEAR OR DAMAGE WILL BE CLAIMED BY THE

HOLDER MUST BE NOTED IN THIS APPRAISAL. IF YOU

DISPUTE THE EXISTENCE OR NATURE OF ANY ITEM OF

DAMAGE IDENTIFIED IN THIS NOTICE, YOU MAY SUBMIT THE

DISPUTE TO THE ALTERNATE ARBITRATION MECHANISM

ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW

YORK STATE ATTORNEY GENERAL."

4. (a) The itemized bill and appraisal required by subdivision three

of this section may be combined into a single document. Mere

acknowledgement by the lessee of receipt of an itemized bill, an

appraisal, or a combination of the two shall not operate as an admission

of the existence, nature or amount of any of the items therein.

(b) (i) The holder shall grant the lessee access to the vehicle at a

reasonable time and place in order for the lessee to obtain an itemized

appraisal on the lessee's own behalf. The holder shall not be required,

however, to deliver the vehicle to, or produce the vehicle at, a

destination designated by the lessee for such purpose.

(ii) A holder may not fail to provide, either intentionally or by

actions or omissions, reasonable access to the vehicle by the licensed

appraiser chosen by the lessee within the period during which a lessee

must obtain and submit an appraisal. If the holder fails to so provide

reasonable access to the vehicle, the holder shall be deemed to have

forfeited its contractual right to charge, receive or collect any charge

for excessive wear and damage to the vehicle from the lessee.

(c) A lessor or holder of a retail lease agreement shall not report an

unsatisfied claim for excess wear and damage to a credit reporting

agency as a derogatory item of information until: (i) the expiration of

the time granted under article seventy-five of the civil practice law

and rules for the filing of a petition to vacate or modify an

arbitrator's award; (ii) the issue has been a subject of a final

judgment; or (iii) where the holder and the lessee execute a settlement,

thirty days after the date a payment is due under the settlement if no

payment has been made.

5. (a) Arbitration and enforcement. If a holder has established or

participates in an informal dispute settlement procedure which is

consistent in all respects with the provisions of part seven hundred

three of title sixteen of the code of federal regulations, any dispute,

disparity or conflict between any appraisal report prepared by an

appraiser licensed by the state department of motor vehicles on behalf

of the holder and one prepared on behalf of the lessee shall be decided

by such informal dispute settlement procedure. Holders utilizing

informal dispute settlement procedures pursuant to this subdivision

shall insure that the arbitrators participating in such informal dispute

settlement procedures are familiar with the provisions of this section.

(b) Upon the payment of a prescribed filing fee, a consumer shall have

the option of submitting any dispute arising under this section to an

alternate arbitration mechanism established pursuant to regulations to

be promulgated hereunder by the attorney general. Upon application of

the consumer and payment of the filing fee, the holder shall submit to

such alternate arbitration. Such alternate arbitration shall be

conducted by a professional arbitrator or arbitration firm appointed by

and under regulations established by the attorney general. Such

alternate arbitration mechanism shall ensure the personal objectivity of

its arbitrators and the right of each party to present its case, to be

in attendance during any presentation made by the other party and to

rebut or refute such presentation. In all other respects, such alternate

arbitration mechanism shall be governed by article seventy-five of the

civil practice law and rules. Holder or lessee shall have thirty days

from the date of mailing of a copy of the arbitrator's decision to such

holder or lessee to comply with the terms of such decision.

(c) In no event shall any person who has participated in an informal

dispute settlement procedure be precluded from seeking the rights or

remedies available to such person under applicable law.

(d) Nothing in this section shall be deemed to prohibit: (i) the

holder and the lessee from agreeing upon termination of the agreement to

the payment by the lessee, in satisfaction of his or her obligation

under the provisions of the agreement, of an amount which the lessor and

the lessee agree is a reasonable figure to compensate for damage to the

vehicle; (ii) the holder from retaining any portion of a security

deposit in satisfaction of amounts owed to the holder that are not

attributable to excess wear and tear; or (iii) to restrict or otherwise

regulate the assessment of charges for excess mileage.