Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S2284 Compare Versions

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22 SENATE DOCKET, NO. 725 FILED ON: 1/18/2023
33 SENATE . . . . . . . . . . . . . . No. 2284
44 The Commonwealth of Massachusetts
55 _________________
66 PRESENTED BY:
77 Jacob R. Oliveira
88 _________________
99 To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
1010 Court assembled:
1111 The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
1212 An Act relative to motor vehicle leasing parity.
1313 _______________
1414 PETITION OF:
1515 NAME:DISTRICT/ADDRESS :Jacob R. OliveiraHampden, Hampshire and WorcesterVanna Howard17th Middlesex1/31/2023 1 of 11
1616 SENATE DOCKET, NO. 725 FILED ON: 1/18/2023
1717 SENATE . . . . . . . . . . . . . . No. 2284
1818 By Mr. Oliveira, a petition (accompanied by bill, Senate, No. 2284) of Jacob R. Oliveira and
1919 Vanna Howard for legislation relative to motor vehicle leasing parity. Transportation.
2020 [SIMILAR MATTER FILED IN PREVIOUS SESSION
2121 SEE HOUSE, NO. 3555 OF 2021-2022.]
2222 The Commonwealth of Massachusetts
2323 _______________
2424 In the One Hundred and Ninety-Third General Court
2525 (2023-2024)
2626 _______________
2727 An Act relative to motor vehicle leasing parity.
2828 Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
2929 of the same, as follows:
3030 1 SECTION 1. Chapter 90 of the general laws, as so appearing in the 2020 edition, shall be
3131 2amended by striking section 7N and replacing it with the following section:-
3232 3 Section 7N. Notwithstanding any disclaimer of warranty, a motor vehicle contract of sale
3333 4or lease may be voided by the buyer or lessee if the motor vehicle fails to pass, within seven days
3434 5from the date of such sale or lease, the periodic staggered inspection at an inspection station
3535 6licensed pursuant to section seven W; provided, that the defects which are the reasons for the
3636 7failure to issue a certificate of inspection were not caused by the abusive or negligent operation
3737 8of the motor vehicle or by damage resulting from an accident or collision occurring after the date
3838 9of the sale or lease; and provided, further, that the cost of repairs necessary to permit the issuance
3939 10of a certificate of inspection exceeds ten per cent of the purchase price of the motor vehicle, or in 2 of 11
4040 11the case of a leased vehicle the exceeds ten percent total amount of payments due by the
4141 12consumer to the lessor over the full term of the lease.
4242 13 In order to void a motor vehicle sale or lease under this section the buyer or lessee shall,
4343 14within fourteen days from the date of sale or lease, notify the selling or leasing dealer of his
4444 15intention to do so, deliver the motor vehicle to the selling or leasing dealer, provide the selling or
4545 16leasing dealer with a written statement signed by an authorized agent of such inspection station
4646 17stating the reasons why the motor vehicle failed to pass the safety or combined safety and
4747 18emissions inspection and an estimate of the cost of necessary repairs. The buyer or lessee shall
4848 19be entitled to a refund of his purchase price unless the buyer or lessee and the selling or leasing
4949 20dealer agree in writing that the selling or leasing dealer may make the necessary repairs at his
5050 21own cost and expense within a reasonable period of time thereafter. This section shall apply only
5151 22to motor vehicles purchased for the immediate personal or family use of the buyer or lessee.
5252 23 “Lessee” means any person who acquires the right to possession of and use of a motor
5353 24vehicle under a lease agreement for a term of not less than one year.
5454 25 SECTION 2. Section 7N1/4 of chapter 90 of the general laws, as so appearing in the 2014
5555 26edition, shall be amended by striking subsection 1 and replacing it with the following
5656 27subsection:-
5757 28 (1) For the purposes of this section the following words shall have the following
5858 29meanings:-
5959 30 “Business day”, Monday to Friday, inclusive, except for state or federal holidays.
6060 31 “Buyer” includes a lessee of a used motor vehicle 3 of 11
6161 32 “Consumer”, a buyer or lessee, other than for purposes of resale, of a motor vehicle, any
6262 33person to whom such motor vehicle is transferred or leased during the period of any express or
6363 34statutory warranty under this section applicable to such motor vehicle, and any other person
6464 35entitled by the terms of such warranty to enforce its obligations.
6565 36 “Dealer”, any person engaged in the business of selling or leasing, offering for sale or
6666 37lease, or negotiating the retail sale or retail lease of used motor vehicles or selling motor vehicles
6767 38as broker or agent for another, including the officers, agents and employees of such person and
6868 39any combination or association of dealers, but not including a bank or other financial institution,
6969 40or the commonwealth, its agencies, bureaus, boards, commissions, authorities, nor any of its
7070 41political subdivisions. A person shall be deemed to be engaged in the business of selling or
7171 42leasing used motor vehicles if such person has sold or leased more than three used motor
7272 43vehicles in the preceding twelve months.
7373 44 “Lessee”, any consumer who acquires the right to possession of and use of a motor
7474 45vehicle under a lease agreement for a term of not less than one year.
7575 46 “Motor vehicle” or “vehicle”, any motor vehicle as defined in section one, sold, leased or
7676 47replaced by a dealer or manufacturer, except that it shall not include auto homes, vehicles built
7777 48primarily for off-road use or any vehicle used primarily for business purposes.
7878 49 “Private seller”, any person who is not a dealer and who offers to sell or sells a used
7979 50motor vehicle to a consumer.
8080 51 “Purchase price”, the total of all payments made for the purchase or lease of a vehicle,
8181 52including but not limited to any finance charges, registration fees, payments made for credit life, 4 of 11
8282 53accident, health, and damage insurance, and collision and related comprehensive insurance
8383 54coverages and service contracts and the value of a trade-in.
8484 55 “Repurchase price”, the purchase price, as defined above, less any cash award that was
8585 56made by the dealer in an attempt to resolve the dispute and was accepted by the consumer, and
8686 57less any refunds or rebates to which the consumer is entitled, plus any incidental damages not
8787 58previously reimbursed, including but not limited to the reasonable costs of towing from point of
8888 59breakdown up to thirty miles to obtain required repairs or to return the vehicle under this section,
8989 60and the reasonable costs of obtaining alternative transportation during the applicable warranty
9090 61period after the second day following each such breakdown not to exceed fifteen dollars vehicle
9191 62rental charges for each day in which the cost of such alternative transportation is reimbursable.
9292 63 “Seller” other than private seller shall include the lessor of a used motor vehicle.
9393 64 “Used motor vehicle” or “used vehicle”, any vehicle driven more than the limited use
9494 65necessary in moving or road testing a new vehicle prior to delivery to a consumer, including a
9595 66demonstrator vehicle, except that it shall not include auto homes, vehicles built primarily for off
9696 67road use, motorcycles, or any vehicle used primarily for business purposes.
9797 68 SECTION 3. Section 7N1/4 of chapter 90 of the general laws is further amended by
9898 69adding after the word “sold,” in line 49, the following words:- “, or leased”.
9999 70 SECTION 4. Section 7N1/4 of chapter 90 of the general laws is further amended by
100100 71adding after the word “sold,” in line 180, the following words:- “or leased”.
101101 72 SECTION 5. Section 7N1/4 of chapter 90 of the general laws is further amended by
102102 73adding after the word “sold,” in line 276, the following words:- “or leased”. 5 of 11
103103 74 SECTION 6. Chapter 93 of the general laws, as appearing in the 2014 edition, is hereby
104104 75amended by adding after section 114 the following section:-
105105 76 Section 115. A motor vehicle dealer shall not assess or represent the value of a motor
106106 77vehicle in a lease agreement in an amount greater than what the dealer has advertised or
107107 78otherwise represented as that vehicle’s purchase price. A dealer’s failure to comply with the
108108 79provisions of this section shall constitute an unfair or deceptive act under the provisions of
109109 80chapter 93A.
110110 81 SECTION 7. Chapter 140D of the general laws, as appearing in the 2014 edition, is
111111 82hereby amended by adding after section 29 the following sections:-
112112 83 Section 29A. The commissioner shall prescribe rule and regulations consistent with the
113113 84provisions of the portion of the federal Truth in Lending Act known as the Consumer Leasing
114114 85Act, 15 U.S.C. sections 1667 through 1667e, the bureau's Regulation M, 12 C.F.R. section 1013
115115 86et seq., the official staff commentary or a disclosure or model form and a lessor upon whom such
116116 87rules and regulations impose duties or obligations, shall make or give to a consumer the
117117 88disclosures, information and notices required of him by such rules and regulations, and such
118118 89disclosures, information and notices shall constitute compliance with the provisions of this
119119 90chapter.
120120 91 Lessors in the commonwealth shall comply with the federal Consumer Leasing Act, 15
121121 92U.S.C. sections 1667 through 1667e, and regulations implemented by the bureau unless and until
122122 93the commissioner promulgates regulations that are substantially similar to or afford more
123123 94protection to consumers than those issued by the bureau. 6 of 11
124124 95 The term “creditor” as used in sections 32 and 33 of this chapter shall include a lessor as
125125 96defined in this section and rules and regulations made thereunder.SECTION 8. Section 32 of
126126 97chapter 140D of the general laws, as so appearing in the 2014 edition, shall be amended by
127127 98adding, in paragraph 2, after the word “transaction,”, the following words:- subsection 1 and
128128 99replacing it with the following subsection:- “or in the case of a consumer lease under section
129129 10029A, 25 percent of the total amount of monthly payments under the lease”.
130130 101 SECTION 9. Section 32 of chapter 140D of the general laws is further amended by
131131 102adding after the word “thirty-one,” in line 46, the following words:- “or sections twenty-nine A”.
132132 103 SECTION 10: Chapter 231 of the general laws, amended by striking out section 85J and
133133 104replacing it with the following section:-
134134 105 Whoever, by deceit or fraud, sells or leases personal property shall be liable in tort to a
135135 106purchaser or lessee in treble the amount of damages sustained by such purchaser or lessee.
136136 107 SECTION 11. Chapter 255 of the general laws, as so appearing in the 2014 edition, shall
137137 108be amended by striking out section 13I and replacing it with the following section:-
138138 109 Section 13I. For the purposes of this section and section 13J
139139 110 “Collateral” shall mean consumer goods secured or motor vehicles leased by a consumer
140140 111credit transaction which are located in commonwealth at the time of default.
141141 112 “Consumer credit transaction” shall include a consumer lease of motor vehicle for a term
142142 113of more than one year;
143143 114 “creditor” and “secured creditor” shall include the lessor of a motor vehicle; and 7 of 11
144144 115 “debtor” shall include a consumer lessee of a motor vehicle.
145145 116 (a) In any consumer credit transaction involving, or loan that is secured by, a non-
146146 117possessory security interest in consumer goods a provision relating to default is enforceable only
147147 118to the extent that the default is material and consists of the debtor’s failure to make one or more
148148 119payments as required by the agreement, or the occurrence of an event which substantially
149149 120impairs the value of the collateral.
150150 121 (b) After a default under a consumer credit transaction by a debtor the secured creditor
151151 122may not bring an action against the debtor or proceed against the collateral until he gives the
152152 123debtor the notice required by this section. Said notice shall be deemed to be delivered when
153153 124delivered to the debtor or when mailed to the debtor at the debtor’s address last known to the
154154 125creditor. If a debtor cures a default after receiving such notice and again defaults, the creditor
155155 126shall give another notice before bringing action or proceeding against the collateral with respect
156156 127to the subsequent default, but no notice is required in connection with a subsequent default if,
157157 128within the period commencing on the date of the consumer credit transaction subject to this
158158 129section and the date of the subsequent default, the debtor has cured a default after notice three or
159159 130more times.
160160 131 (c) The notice shall be in writing and shall be given to the debtor ten days or more after
161161 132the default. The notice shall conspicuously state the rights of the debtor upon default in
162162 133substantially the following form:
163163 134 The heading shall read:' 'Rights of Defaulting Consumer under Massachusetts Law.'' The
164164 135body of the notice shall read: ''You may cure your default in (describe transaction in a manner 8 of 11
165165 136enabling debtor to identify it) by paying to (name and address of lessor or creditor) (amount due)
166166 137before (date which is at least twenty-one days after notice is mailed).
167167 138 If you pay this amount within the time allowed you are no longer in default and may
168168 139continue with the transaction (lease or loan) as though no default had occurred.
169169 140 (d) No court shall enter a deficiency judgment against a debtor which includes a finance
170170 141charge or insurance premiums allocable to installments due after repossession. A debtor whose
171171 142goods have been repossessed shall not be liable in a civil action for a deficiency unless the
172172 143secured party files an affidavit signed either by the purchaser at the sale or by the secured party
173173 144stating the price for which the goods were sold and the date and place of sale. Such affidavit
174174 145shall be filed with the complaint.
175175 146 (e) Unless the secured creditor has first notified the debtor that he has elected to
176176 147accelerate the unpaid balance of the obligation because of default, brought action against the
177177 148debtor, or proceeded against the collateral, the debtor may cure a default consisting of a failure to
178178 149pay money by tendering the amount of all unpaid sums due at the time of tender, without
179179 150acceleration, plus any unpaid delinquency or deferral charges. Cure shall restore the debtor to his
180180 151rights under the agreement as though the defaults cured have not occurred, subject to the
181181 152provisions of subsection (b).
182182 153 SECTION 12. Chapter 255 of the general laws, as so appearing in the 2014 edition, shall
183183 154be amended by striking out section 13J and replacing it with the following section:-
184184 155 Section 13J. (a) Subject to the provisions of this section and section 13I, a secured
185185 156creditor under a consumer credit transaction may take possession of collateral. In taking
186186 157possession the secured creditor under a consumer credit transaction may proceed without a prior 9 of 11
187187 158hearing only if the default is material and consists of the debtor’s failure to make one or more
188188 159payments as required by the agreement or the occurrence of an event which substantially impairs
189189 160the value of the collateral, and only if possession can be obtained without use of force, without a
190190 161breach of peace and, unless the debtor consents to an entry, at the time of such entry, without
191191 162entry upon property owned by, or rented to the debtor.
192192 163 (b) Except as provided in subsection (a), a creditor under a consumer credit transaction
193193 164may proceed against collateral only after a prior hearing. In any proceeding where possession of
194194 165the collateral is part of the relief sought by a creditor no court shall allow a secured creditor or
195195 166lessor to take possession of collateral until the right of the creditor or lessor to take possession
196196 167has been determined at a hearing at which the consumer has an opportunity to be heard, having
197197 168been notified in writing of such hearing at least seven days in advance thereof.
198198 169 (c) The consumer under a secured consumer credit transaction may redeem the collateral
199199 170from the creditor or lessor at any time within twenty days of the creditor or lessor’s taking
200200 171possession of the collateral, or thereafter until the creditor or lessor has either disposed of the
201201 172collateral, entered into a contract for its disposition, or gained the right to retain the collateral.
202202 173 (d) The creditor or lessor may after gaining possession sell or otherwise dispose of the
203203 174collateral. Unless displaced by the provisions of this section and section thirteen I, the rights and
204204 175obligations of the parties, including redemption and disposition of the collateral shall be
205205 176governed by the provisions of Part 6 of Article 9 of chapter 106, including consumer leases of
206206 177motor vehicles, to the extent applicable. Notwithstanding the provisions in Part 6 of Article 9 of
207207 178chapter 106, if, in connection with a consumer credit transaction which involves an unpaid
208208 179balance of two thousand dollars or less and which is at the time of default secured by a non- 10 of 11
209209 180possessory security interest in consumer goods, the creditor or lessor takes possession of or
210210 181accepts surrender of the collateral, the consumer shall not be liable for any deficiency. If the
211211 182agreement between the creditor or lessor and consumer provides that the consumer is to obtain
212212 183insurance protecting the collateral against fire, theft, collision or other hazards and naming the
213213 184creditor or lessor as loss payee and if, prior to the repossession or surrender of the collateral, loss
214214 185or damage occurs which would give rise to insurance proceeds under the terms of the policy in
215215 186force, then nothing in this section shall be deemed to limit the creditor or lessor’s rights to so
216216 187much of the insurance proceeds as does not exceed the fair market value of the collateral existing
217217 188just prior to the loss or damage and, if insurance as required by the agreement is not in force at
218218 189the time of the loss or damage, nothing in this section shall be deemed to limit the creditor or
219219 190lessor’s rights in proceeding against any third party who is responsible for the loss or damage in
220220 191the name of the consumer or otherwise. For the purposes of this section the unpaid balance of a
221221 192consumer credit transaction shall be that amount which the consumer would have been required
222222 193to pay upon prepayment.
223223 194 (e) (1) If the unpaid balance of the consumer credit transaction at the time of default was
224224 195two thousand dollars or more the creditor or lessor shall be entitled to recover from the consumer
225225 196the deficiency, if any, resulting from deducting the fair market value of the collateral from the
226226 197unpaid balance due and shall also be entitled to any reasonable repossession and storage costs,
227227 198provided he has complied with all provisions of this section.
228228 199 (2) In a proceeding for a deficiency the fair market value of the collateral shall be a
229229 200question for the court to determine. Periodically published trade estimates of the retail value of
230230 201goods shall, to the extent they are recognized in the particular trade or business, be presumed to
231231 202be the fair market value of the collateral. 11 of 11
232232 203 (f) Any secured creditor or lessor obtaining possession of a motor vehicle under the
233233 204provisions of this section shall, within one hour after obtaining such possession, notify the police
234234 205department of the city or town in which such possession occurred, giving such police department
235235 206a description of the vehicle involved.
236236 207 SECTION 13: Sections 1 through 9 shall not apply to leases in existence before the
237237 208effective date of this Act. However, such sections shall apply when, after the effective date of
238238 209this Act, a consumer lease is renegotiated by the same lessee for the same motor vehicle.
239239 210 SECTION 14. Sections 10 and 11 shall not apply to leases in default before the effective
240240 211date of this Act. However, such sections shall apply where a lease in default before the effective
241241 212date of this Act at is cured, and then goes into default again after the effective date of this Act.