SB589-SSA1,41,6
23(7) A holder may purchase or sell, or otherwise acquire or transfer, an interest
24in a consumer lease or a motor vehicle subject to a consumer lease, on such terms and
25conditions as may be mutually agreed upon by the parties to the sale, transfer or
1acquisition. No filing of the sale, transfer or acquisition, or any requirement that the
2holder be deprived of any payments due with respect to the consumer lease or, if
3subject to replevin or otherwise returned to the holder, the motor vehicle, shall be
4necessary to the validity of any written bill of sale or other instrument of transfer of
5the interest in a consumer lease as against creditors, subsequent purchasers,
6pledges, encumbrancers, mortgagees, successors or assigns.
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7(8) (a) Upon written request from a lessee, the holder shall give or forward to
8the lessee a written statement that specifies, without regard to realized value, the
9projected obligation that the lessee will incur in the event of early termination of the
10consumer lease.
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(b) No charge may be imposed for the preparation of one statement under par.
12(a) in a 12-month period. A holder may impose a reasonable charge, not exceeding
13$20 per statement, for the preparation of a 2nd or subsequent statement under par.
14(a) in a 12-month period, if the charge has been disclosed to the lessee either orally
15or in writing prior to preparation of a statement under this paragraph.
SB589-SSA1,41,17
16(9) A holder is not required to pay interest on any security deposit under the
17consumer lease.
SB589-SSA1,41,20
18(10) Any provision of a consumer lease in violation of this chapter is void and
19unenforceable, but shall not affect the validity of any other provision of the consumer
20lease.
SB589-SSA1,41,24
21429.204 Gap amount; notice; waiver. (1) If a consumer lease provides that
22the lessee is responsible for any or all of the gap amount, the consumer lease shall
23disclose this fact, using the term "gap amount". The acceptance of a consumer lease
24may not be conditioned upon the lessee's agreement to gap protection.
SB589-SSA1,42,9
1(2) (a) A lessor may waive any right under the consumer lease to hold a lessee
2liable for any or all of the gap amount. The consumer lease may contain a separate
3charge for the waiver under this paragraph if the charge is conspicuously disclosed
4to the lessee, and the consumer lease also contains a conspicuous notice stating that,
5for such separate charge, the lessor agrees to waive such contractual right and that,
6in lieu of such separate charge, the lessee may purchase insurance from an insurer
7authorized to transact business in this state insuring the lessee for any or all of the
8gap amount. A waiver under this paragraph without a separate charge is not
9consumer credit insurance, as defined in s. 424.201, or insurance on property.
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(b) A lessee is not liable for any or all of the gap amount if the consumer lease
11fails to provide the notice required by par. (a).
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12(3) A lessor's waiver under sub. (2) may be conditioned upon payment of any
13of the following:
SB589-SSA1,42,1414
(a) The separate charge, if any, for the waiver.
SB589-SSA1,42,1715
(b) All amounts due under the consumer lease as of the date of total loss or
16destruction of the leased vehicle or, if specified in the consumer lease, as of the date
17of receipt by the lessor of insurance proceeds.
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(c) An amount from the lessee equal to any deductible amount under an
19applicable insurance policy and any other subtractions made by the insurance
20company under the insurance policy.
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(d) Insurance proceeds from the applicable insurance policy required under the
22consumer lease or the equivalent amount with respect to the value of the motor
23vehicle.
SB589-SSA1,43,3
24429.205 Security interest. (1) No consumer lease, or any other document
25executed by a lessee in connection with a consumer lease, shall create a security
1interest in any real or personal property of the lessee to secure payment of any
2obligations assumed by the lessee under the consumer lease. This subsection does
3not apply to any of the following:
SB589-SSA1,43,54
(a) The taking of a security deposit, advance lease payment or other
5prepayment by cash, check, credit card or other device.
SB589-SSA1,43,66
(b) Any right of setoff.
SB589-SSA1,43,107
(c) Any security interest in the leased vehicle or in any proceeds, refunds for
8cancellation or any other rights of the lessee with respect to the consumer lease or
9the leased vehicle, including any insurance contracts, gap protection contracts,
10repair contracts and extended warranty or maintenance service contracts.
SB589-SSA1,43,12
11(2) Any security interest taken in violation of this section is void and
12unenforceable, but shall not otherwise affect the validity of the consumer lease.
SB589-SSA1,43,16
13429.206 Determination of realized value upon early termination. If a
14consumer lease is terminated before the expiration date set forth in the lease, the
15realized value of the motor vehicle leased under the consumer lease shall be
16determined as follows:
SB589-SSA1,43,18
17(1) If the lessee and the lessor mutually agree upon the motor vehicle's realized
18value, the realized value is the mutually agreed-upon amount.
SB589-SSA1,43,24
19(2) If there is a total loss or destruction of the vehicle occasioned by its theft,
20physical damage or other occurrence specified in the consumer lease and no amount
21is agreed upon under sub. (1), the realized value equals the sum of any insurance
22proceeds received by the holder under an insurance policy required under the
23consumer lease and any amounts received by the holder from any other party in
24payment for the loss or destruction of the leased vehicle.
SB589-SSA1,44,9
1(3) If the realized value has not been determined under sub. (1) or (2) and an
2appraisal is obtained under this subsection, the realized value is the amount
3established by the appraisal. An appraisal may be obtained under this subsection
4if, within 5 business days of the early termination of the consumer lease, a lessee who
5is not in default obtains at his or her own expense a professional appraisal of the
6current wholesale value of the vehicle by an appraiser mutually agreeable to the
7lessee and the holder. An appraisal under this subsection is final and binding and
8establishes the realized value for purposes of determining the liability of the lessee
9under the consumer lease.
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10(4) If the realized value has not been determined under sub. (1), (2) or (3), the
11realized value equals the greater of the following:
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(a) The price obtained by the holder for the commercially reasonable
13disposition of the motor vehicle, after subtracting all actual and reasonable expenses
14incurred by the lessor in connection with the disposition of the vehicle.
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(b) The highest bona fide offer received by the holder for the commercially
16reasonable disposition of the motor vehicle.
SB589-SSA1,44,18
17429.207 Restrictions on early termination obligation. (1) The lessee has
18the right to terminate the consumer lease at any time.
SB589-SSA1,44,22
19(2) If a consumer lease is terminated before the expiration date set forth in the
20consumer lease and no applicable option to purchase is exercised by the lessee, the
21early termination obligation of the lessee may not exceed an amount equal to the sum
22of the following amounts:
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(a) Any unpaid lease payments that have accrued as of the date of termination
24of the consumer lease.
SB589-SSA1,45,3
1(b) Any other amounts unpaid by the lessee, other than excess mileage charges,
2arising under the terms of the consumer lease or not prohibited by this chapter or chs.
3421 to 427.
SB589-SSA1,45,54
(c) Any official fees and taxes imposed in connection with termination of the
5consumer lease.
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(d) The amount set forth in the consumer lease as a disposition or other early
7termination fee, not to exceed the base lease payment divided by the number of
8months in the term of the lease.
SB589-SSA1,45,119
(e) The reasonable costs of retaking, storing, preparing for sale and selling the
10motor vehicle, except that a cost may not be imposed under this paragraph if, in the
11event of a default, the cost could not be charged under s. 422.413.
SB589-SSA1,45,1812
(f) Any amount by which the outstanding unpaid balance of the lease charge
13over the unexpired term of the lease exceeds the realized value. The outstanding
14unpaid balance of the lease charge may be calculated in accordance with the constant
15yield method or any other generally accepted accounting principle, except that this
16balance may be calculated on the basis of the adjusted capitalized cost for the
17unexpired term of the lease in accordance with generally accepted actuarial
18principles if the consumer lease provides for such calculation.
SB589-SSA1,45,23
19(3) A holder may credit against the balance of the lessee's early termination
20obligation any refundable security deposit or advance lease payments held by the
21holder. The excess of any refundable security deposit or advance lease payment over
22the amount of the lessee's early termination obligation shall be promptly returned
23to the lessee.
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24(4) This section does not limit or restrict the manner of calculating the lessee's
25early termination obligation, if such obligation does not exceed the amount
1calculated under sub. (2). Such manner may include calculation of the unamortized
2capitalized cost, or the discounted present value of remaining lease payments,
3multiples of monthly lease payments or payments on another periodic basis.
SB589-SSA1,46,8
4429.208 Assessment of excess wear and damage. (1) (a) Except as
5provided in par. (b), a holder shall, upon return of a leased vehicle, conduct an
6inspection to determine excess wear and damage to the leased vehicle for which the
7lessee may be held liable. A holder may not prohibit the lessee from being present
8at such inspection.
SB589-SSA1,46,119
(b) If a lessee exercises an option to purchase in the consumer lease, the holder
10may not demand, collect or receive a charge for excess wear and damage to the leased
11vehicle and is not required to conduct the inspection under par. (a).
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12(2) For any inspection at or after the return of a leased vehicle, a holder shall
13do all of the following not later than 60 days after return of the vehicle:
SB589-SSA1,46,1514
(b) Provide to the lessee an itemized bill meeting the requirements under sub.
15(3).
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(c) Provide to the lessee a statement in substantially the following language:
17"You are being asked to pay this amount for excess wear and damage to the leased
18vehicle. If you do not agree with this amount and wish to preserve valuable rights,
19you must obtain and deliver to us, within 5 days after hand delivery or 7 days after
20mailing of this bill, an itemized inspection report and estimate of the cost of repairing
21such excess wear and damage from an appraiser agreed to by us and, if your lease
22has ended, payment of any charges due under the inspection you obtained. If you
23properly obtain and deliver such appraisal and tender any amounts due, such
24appraisal shall be binding on the holder. If you fail to do so, the holder's inspection
25shall be conclusive."
SB589-SSA1,47,5
1(d) For the purpose of obtaining a counter-inspection under sub. (5), allow the
2lessee access to the motor vehicle, at a reasonable time and place designated by the
3holder, for the applicable time period specified in the statement under par. (c). A
4holder is not required to deliver the motor vehicle to, or produce the motor vehicle
5at, a place designated by the lessee for the purpose of the counter-inspection.
SB589-SSA1,47,13
6(3) (a) The itemized bill specified in sub. (2) (b) shall be based on the inspection
7for excess wear and damage to the leased vehicle, and shall consist of a listing of
8items of excess wear and damage, together with a charge for each item. The itemized
9bill may be comprised of separate documents delivered or mailed separately, and may
10include identified charges for other amounts due under the consumer lease, such as
11excess mileage charges. Acknowledgement of receipt of an itemized bill by a lessee
12is not an admission by the lessee of the existence, nature, obligation to pay or amount
13of any item of excess wear and damage specified in an itemized bill.
SB589-SSA1,47,1514
(b) A holder is not required to provide to the lessee an itemized bill under sub.
15(2) with respect to a counter-inspection under sub. (5).
SB589-SSA1,47,23
16(4) (a) If a lessee is required under the consumer lease, or given the option by
17the lessor, to have a pretermination inspection by the holder of the leased vehicle for
18excess wear and damage, the holder shall provide at least 15 days' notice of such
19inspection to the lessee. A pretermination inspection under this paragraph may not
20be earlier than 15 days before the termination date set forth in the consumer lease.
21The notice under this paragraph shall specify that the holder's inspection after the
22termination of the lease shall be conclusive unless the lessee obtains a
23counter-inspection under sub. (5).
SB589-SSA1,48,924
(b) A pretermination inspection under par. (a) shall be reasonable as to time
25and place. In addition to the statement under sub. (2) (c), any itemized bill of excess
1wear and damage prepared under par. (a) shall include a statement in substantially
2the following language: "If this inspection report was prepared prior to the
3termination date of the consumer lease, you may avoid any excess wear and damage
4charges by having such items satisfactorily repaired prior to the return of the vehicle.
5The holder may inspect the vehicle at or after its return and may seek additional
6charges for excess wear and damage only by written notice to you, and only for excess
7wear and damage incurred after the date of that inspection. Any charges for excess
8wear and damage under this inspection or your own inspection shall be due when the
9lease terminates."
SB589-SSA1,48,13
10(5) (a) A lessee may, at his or her own expense, obtain a counter-inspection for
11excess wear and damage to the leased vehicle, within the applicable time period
12specified in the statement under sub. (2) (c). A counter-inspection is not valid under
13this section unless it satisfies all of the following requirements:
SB589-SSA1,48,1514
1. Is conducted by an inspector agreed to by the holder, with such agreement
15not to be unreasonably withheld by the holder.
SB589-SSA1,48,1816
2. Is in writing in a form provided by, or acceptable to, the holder, listing any
17items of excess wear and damage to the leased vehicle and, according to standards
18set forth in the consumer lease, the estimated cost of repair of such items.
SB589-SSA1,48,1919
3. Is delivered to the holder within the applicable time period.
SB589-SSA1,48,2220
4. If conducted after the leased vehicle is returned to the lessee, is accompanied
21by payment of the amount of such excess wear and damage charges listed on the
22counter-inspection.
SB589-SSA1,48,2523
(b) Absent a mathematical mistake or other obvious error, a holder shall accept
24the counter-inspection as conclusive of the lessee's excess wear and damage
25obligations under the consumer lease.
SB589-SSA1,49,7
1(c) The total amount of the excess wear and damage charges specified in a
2counter-inspection under par. (a) may not be increased at or after the termination
3of the lease, except to increase the lessee's excess wear and damage obligation to the
4extent that any excess wear and damage was obscured or concealed or is reasonably
5believed by the holder to have occurred after such inspection. Any increase under
6this paragraph is not valid unless the holder gives the lessee another itemized bill
7and statement meeting the requirements of subs. (2) and (3).
SB589-SSA1,49,12
8(6) A lessee shall not be in default on the consumer lease for failing to obtain
9a pretermination inspection or counter-inspection under this section,
10notwithstanding any contrary provision of the consumer lease. If a lessee does not
11obtain a pretermination inspection or counter-inspection, the itemized bill with
12respect to the inspection under sub. (1) shall be conclusive.
SB589-SSA1,49,17
13(7) (a) A holder may not demand, receive or collect a charge for excess wear and
14damage to the leased vehicle unless the holder substantially complies with this
15section. The exclusive penalty for failure to substantially comply with this section
16is a waiver of the right to collect all contested excess wear and damage charges from
17the lessee.
SB589-SSA1,49,1918
(b) A holder is not required to send any notice under this section if the holder
19does not wish to demand, receive or collect any excess wear and damage charges.
SB589-SSA1,50,220
(c) Nothing in this section shall limit a lessee's obligation for excess mileage
21charges or prohibit any agreement between the lessee and the holder relating to
22excess wear and damage, if the agreement does not conflict with any of the lessee's
23rights under this section, or limit a lessee's liability to the holder for odometer
24tampering or for obscured or concealed structural or safety-related damage
1discovered by the holder after the return of the motor vehicle or the receipt of an
2itemized bill by the lessee.
SB589-SSA1,50,4
3(8) Except for sub. (1) (b), this section applies only to leased vehicles that are
4returned to an authorized representative, who is located in this state, of the holder.
SB589-SSA1,50,8
5429.209 Renegotiations and extensions. (1) All of the disclosure
6requirements specified in s. 429.203 apply to the renegotiation of a consumer lease.
7A renegotiation of a consumer lease does not create a warranty or subject the
8transaction to any laws of this state relating to the sale of used motor vehicles.
SB589-SSA1,50,10
9(2) The disclosure requirements specified in s. 429.203 do not apply to any
10extension of a consumer lease not exceeding 6 months in the aggregate.
SB589-SSA1,50,1211
subchapter iii
12
penalties and remedies
SB589-SSA1,50,15
13429.301 Penalties and remedies. (1) Except as provided in s. 429.208 (7)
14(a), a person who commits a violation of this chapter is liable to the lessee in an
15amount equal to the sum of the following amounts:
SB589-SSA1,50,1616
(a) One hundred dollars.
SB589-SSA1,50,1817
(b) The actual damages, including any incidental and consequential damages,
18sustained by the lessee by reason of the violation.
SB589-SSA1,50,1919
(c) Reasonable attorney fees, as determined under s. 425.308.
SB589-SSA1,50,22
20(2) If a party to a consumer lease recovers damages or penalties under this
21chapter for an act or omission, the party may not recover any damages or penalties
22for the same act or omission under s. 218.01 or chs. 411 and 421 to 427.
SB589-SSA1,50,2524
(1) This act first applies to leases entered into on the effective date of this
25subsection.
SB589-SSA1,51,32
(1)
This act takes effect on the first day of the 5th month beginning after
3publication.