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2 | 2 | | SENATE DOCKET, NO. 725 FILED ON: 1/18/2023 |
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3 | 3 | | SENATE . . . . . . . . . . . . . . No. 2284 |
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4 | 4 | | The Commonwealth of Massachusetts |
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5 | 5 | | _________________ |
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6 | 6 | | PRESENTED BY: |
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7 | 7 | | Jacob R. Oliveira |
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8 | 8 | | _________________ |
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9 | 9 | | To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General |
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10 | 10 | | Court assembled: |
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11 | 11 | | The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill: |
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12 | 12 | | An Act relative to motor vehicle leasing parity. |
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13 | 13 | | _______________ |
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14 | 14 | | PETITION OF: |
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15 | 15 | | NAME:DISTRICT/ADDRESS :Jacob R. OliveiraHampden, Hampshire and WorcesterVanna Howard17th Middlesex1/31/2023 1 of 11 |
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16 | 16 | | SENATE DOCKET, NO. 725 FILED ON: 1/18/2023 |
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17 | 17 | | SENATE . . . . . . . . . . . . . . No. 2284 |
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18 | 18 | | By Mr. Oliveira, a petition (accompanied by bill, Senate, No. 2284) of Jacob R. Oliveira and |
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19 | 19 | | Vanna Howard for legislation relative to motor vehicle leasing parity. Transportation. |
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20 | 20 | | [SIMILAR MATTER FILED IN PREVIOUS SESSION |
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21 | 21 | | SEE HOUSE, NO. 3555 OF 2021-2022.] |
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22 | 22 | | The Commonwealth of Massachusetts |
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23 | 23 | | _______________ |
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24 | 24 | | In the One Hundred and Ninety-Third General Court |
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25 | 25 | | (2023-2024) |
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26 | 26 | | _______________ |
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27 | 27 | | An Act relative to motor vehicle leasing parity. |
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28 | 28 | | Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority |
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29 | 29 | | of the same, as follows: |
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30 | 30 | | 1 SECTION 1. Chapter 90 of the general laws, as so appearing in the 2020 edition, shall be |
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31 | 31 | | 2amended by striking section 7N and replacing it with the following section:- |
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32 | 32 | | 3 Section 7N. Notwithstanding any disclaimer of warranty, a motor vehicle contract of sale |
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33 | 33 | | 4or lease may be voided by the buyer or lessee if the motor vehicle fails to pass, within seven days |
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34 | 34 | | 5from the date of such sale or lease, the periodic staggered inspection at an inspection station |
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35 | 35 | | 6licensed pursuant to section seven W; provided, that the defects which are the reasons for the |
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36 | 36 | | 7failure to issue a certificate of inspection were not caused by the abusive or negligent operation |
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37 | 37 | | 8of the motor vehicle or by damage resulting from an accident or collision occurring after the date |
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38 | 38 | | 9of the sale or lease; and provided, further, that the cost of repairs necessary to permit the issuance |
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39 | 39 | | 10of a certificate of inspection exceeds ten per cent of the purchase price of the motor vehicle, or in 2 of 11 |
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40 | 40 | | 11the case of a leased vehicle the exceeds ten percent total amount of payments due by the |
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41 | 41 | | 12consumer to the lessor over the full term of the lease. |
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42 | 42 | | 13 In order to void a motor vehicle sale or lease under this section the buyer or lessee shall, |
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43 | 43 | | 14within fourteen days from the date of sale or lease, notify the selling or leasing dealer of his |
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44 | 44 | | 15intention to do so, deliver the motor vehicle to the selling or leasing dealer, provide the selling or |
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45 | 45 | | 16leasing dealer with a written statement signed by an authorized agent of such inspection station |
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46 | 46 | | 17stating the reasons why the motor vehicle failed to pass the safety or combined safety and |
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47 | 47 | | 18emissions inspection and an estimate of the cost of necessary repairs. The buyer or lessee shall |
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48 | 48 | | 19be entitled to a refund of his purchase price unless the buyer or lessee and the selling or leasing |
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49 | 49 | | 20dealer agree in writing that the selling or leasing dealer may make the necessary repairs at his |
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50 | 50 | | 21own cost and expense within a reasonable period of time thereafter. This section shall apply only |
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51 | 51 | | 22to motor vehicles purchased for the immediate personal or family use of the buyer or lessee. |
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52 | 52 | | 23 “Lessee” means any person who acquires the right to possession of and use of a motor |
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53 | 53 | | 24vehicle under a lease agreement for a term of not less than one year. |
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54 | 54 | | 25 SECTION 2. Section 7N1/4 of chapter 90 of the general laws, as so appearing in the 2014 |
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55 | 55 | | 26edition, shall be amended by striking subsection 1 and replacing it with the following |
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56 | 56 | | 27subsection:- |
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57 | 57 | | 28 (1) For the purposes of this section the following words shall have the following |
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58 | 58 | | 29meanings:- |
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59 | 59 | | 30 “Business day”, Monday to Friday, inclusive, except for state or federal holidays. |
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60 | 60 | | 31 “Buyer” includes a lessee of a used motor vehicle 3 of 11 |
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61 | 61 | | 32 “Consumer”, a buyer or lessee, other than for purposes of resale, of a motor vehicle, any |
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62 | 62 | | 33person to whom such motor vehicle is transferred or leased during the period of any express or |
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63 | 63 | | 34statutory warranty under this section applicable to such motor vehicle, and any other person |
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64 | 64 | | 35entitled by the terms of such warranty to enforce its obligations. |
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65 | 65 | | 36 “Dealer”, any person engaged in the business of selling or leasing, offering for sale or |
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66 | 66 | | 37lease, or negotiating the retail sale or retail lease of used motor vehicles or selling motor vehicles |
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67 | 67 | | 38as broker or agent for another, including the officers, agents and employees of such person and |
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68 | 68 | | 39any combination or association of dealers, but not including a bank or other financial institution, |
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69 | 69 | | 40or the commonwealth, its agencies, bureaus, boards, commissions, authorities, nor any of its |
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70 | 70 | | 41political subdivisions. A person shall be deemed to be engaged in the business of selling or |
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71 | 71 | | 42leasing used motor vehicles if such person has sold or leased more than three used motor |
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72 | 72 | | 43vehicles in the preceding twelve months. |
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73 | 73 | | 44 “Lessee”, any consumer who acquires the right to possession of and use of a motor |
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74 | 74 | | 45vehicle under a lease agreement for a term of not less than one year. |
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75 | 75 | | 46 “Motor vehicle” or “vehicle”, any motor vehicle as defined in section one, sold, leased or |
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76 | 76 | | 47replaced by a dealer or manufacturer, except that it shall not include auto homes, vehicles built |
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77 | 77 | | 48primarily for off-road use or any vehicle used primarily for business purposes. |
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78 | 78 | | 49 “Private seller”, any person who is not a dealer and who offers to sell or sells a used |
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79 | 79 | | 50motor vehicle to a consumer. |
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80 | 80 | | 51 “Purchase price”, the total of all payments made for the purchase or lease of a vehicle, |
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81 | 81 | | 52including but not limited to any finance charges, registration fees, payments made for credit life, 4 of 11 |
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82 | 82 | | 53accident, health, and damage insurance, and collision and related comprehensive insurance |
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83 | 83 | | 54coverages and service contracts and the value of a trade-in. |
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84 | 84 | | 55 “Repurchase price”, the purchase price, as defined above, less any cash award that was |
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85 | 85 | | 56made by the dealer in an attempt to resolve the dispute and was accepted by the consumer, and |
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86 | 86 | | 57less any refunds or rebates to which the consumer is entitled, plus any incidental damages not |
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87 | 87 | | 58previously reimbursed, including but not limited to the reasonable costs of towing from point of |
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88 | 88 | | 59breakdown up to thirty miles to obtain required repairs or to return the vehicle under this section, |
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89 | 89 | | 60and the reasonable costs of obtaining alternative transportation during the applicable warranty |
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90 | 90 | | 61period after the second day following each such breakdown not to exceed fifteen dollars vehicle |
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91 | 91 | | 62rental charges for each day in which the cost of such alternative transportation is reimbursable. |
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92 | 92 | | 63 “Seller” other than private seller shall include the lessor of a used motor vehicle. |
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93 | 93 | | 64 “Used motor vehicle” or “used vehicle”, any vehicle driven more than the limited use |
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94 | 94 | | 65necessary in moving or road testing a new vehicle prior to delivery to a consumer, including a |
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95 | 95 | | 66demonstrator vehicle, except that it shall not include auto homes, vehicles built primarily for off |
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96 | 96 | | 67road use, motorcycles, or any vehicle used primarily for business purposes. |
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97 | 97 | | 68 SECTION 3. Section 7N1/4 of chapter 90 of the general laws is further amended by |
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98 | 98 | | 69adding after the word “sold,” in line 49, the following words:- “, or leased”. |
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99 | 99 | | 70 SECTION 4. Section 7N1/4 of chapter 90 of the general laws is further amended by |
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100 | 100 | | 71adding after the word “sold,” in line 180, the following words:- “or leased”. |
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101 | 101 | | 72 SECTION 5. Section 7N1/4 of chapter 90 of the general laws is further amended by |
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102 | 102 | | 73adding after the word “sold,” in line 276, the following words:- “or leased”. 5 of 11 |
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103 | 103 | | 74 SECTION 6. Chapter 93 of the general laws, as appearing in the 2014 edition, is hereby |
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104 | 104 | | 75amended by adding after section 114 the following section:- |
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105 | 105 | | 76 Section 115. A motor vehicle dealer shall not assess or represent the value of a motor |
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106 | 106 | | 77vehicle in a lease agreement in an amount greater than what the dealer has advertised or |
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107 | 107 | | 78otherwise represented as that vehicle’s purchase price. A dealer’s failure to comply with the |
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108 | 108 | | 79provisions of this section shall constitute an unfair or deceptive act under the provisions of |
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109 | 109 | | 80chapter 93A. |
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110 | 110 | | 81 SECTION 7. Chapter 140D of the general laws, as appearing in the 2014 edition, is |
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111 | 111 | | 82hereby amended by adding after section 29 the following sections:- |
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112 | 112 | | 83 Section 29A. The commissioner shall prescribe rule and regulations consistent with the |
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113 | 113 | | 84provisions of the portion of the federal Truth in Lending Act known as the Consumer Leasing |
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114 | 114 | | 85Act, 15 U.S.C. sections 1667 through 1667e, the bureau's Regulation M, 12 C.F.R. section 1013 |
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115 | 115 | | 86et seq., the official staff commentary or a disclosure or model form and a lessor upon whom such |
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116 | 116 | | 87rules and regulations impose duties or obligations, shall make or give to a consumer the |
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117 | 117 | | 88disclosures, information and notices required of him by such rules and regulations, and such |
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118 | 118 | | 89disclosures, information and notices shall constitute compliance with the provisions of this |
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119 | 119 | | 90chapter. |
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120 | 120 | | 91 Lessors in the commonwealth shall comply with the federal Consumer Leasing Act, 15 |
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121 | 121 | | 92U.S.C. sections 1667 through 1667e, and regulations implemented by the bureau unless and until |
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122 | 122 | | 93the commissioner promulgates regulations that are substantially similar to or afford more |
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123 | 123 | | 94protection to consumers than those issued by the bureau. 6 of 11 |
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124 | 124 | | 95 The term “creditor” as used in sections 32 and 33 of this chapter shall include a lessor as |
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125 | 125 | | 96defined in this section and rules and regulations made thereunder.SECTION 8. Section 32 of |
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126 | 126 | | 97chapter 140D of the general laws, as so appearing in the 2014 edition, shall be amended by |
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127 | 127 | | 98adding, in paragraph 2, after the word “transaction,”, the following words:- subsection 1 and |
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128 | 128 | | 99replacing it with the following subsection:- “or in the case of a consumer lease under section |
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129 | 129 | | 10029A, 25 percent of the total amount of monthly payments under the lease”. |
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130 | 130 | | 101 SECTION 9. Section 32 of chapter 140D of the general laws is further amended by |
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131 | 131 | | 102adding after the word “thirty-one,” in line 46, the following words:- “or sections twenty-nine A”. |
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132 | 132 | | 103 SECTION 10: Chapter 231 of the general laws, amended by striking out section 85J and |
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133 | 133 | | 104replacing it with the following section:- |
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134 | 134 | | 105 Whoever, by deceit or fraud, sells or leases personal property shall be liable in tort to a |
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135 | 135 | | 106purchaser or lessee in treble the amount of damages sustained by such purchaser or lessee. |
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136 | 136 | | 107 SECTION 11. Chapter 255 of the general laws, as so appearing in the 2014 edition, shall |
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137 | 137 | | 108be amended by striking out section 13I and replacing it with the following section:- |
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138 | 138 | | 109 Section 13I. For the purposes of this section and section 13J |
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139 | 139 | | 110 “Collateral” shall mean consumer goods secured or motor vehicles leased by a consumer |
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140 | 140 | | 111credit transaction which are located in commonwealth at the time of default. |
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141 | 141 | | 112 “Consumer credit transaction” shall include a consumer lease of motor vehicle for a term |
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142 | 142 | | 113of more than one year; |
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143 | 143 | | 114 “creditor” and “secured creditor” shall include the lessor of a motor vehicle; and 7 of 11 |
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144 | 144 | | 115 “debtor” shall include a consumer lessee of a motor vehicle. |
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145 | 145 | | 116 (a) In any consumer credit transaction involving, or loan that is secured by, a non- |
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146 | 146 | | 117possessory security interest in consumer goods a provision relating to default is enforceable only |
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147 | 147 | | 118to the extent that the default is material and consists of the debtor’s failure to make one or more |
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148 | 148 | | 119payments as required by the agreement, or the occurrence of an event which substantially |
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149 | 149 | | 120impairs the value of the collateral. |
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150 | 150 | | 121 (b) After a default under a consumer credit transaction by a debtor the secured creditor |
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151 | 151 | | 122may not bring an action against the debtor or proceed against the collateral until he gives the |
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152 | 152 | | 123debtor the notice required by this section. Said notice shall be deemed to be delivered when |
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153 | 153 | | 124delivered to the debtor or when mailed to the debtor at the debtor’s address last known to the |
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154 | 154 | | 125creditor. If a debtor cures a default after receiving such notice and again defaults, the creditor |
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155 | 155 | | 126shall give another notice before bringing action or proceeding against the collateral with respect |
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156 | 156 | | 127to the subsequent default, but no notice is required in connection with a subsequent default if, |
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157 | 157 | | 128within the period commencing on the date of the consumer credit transaction subject to this |
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158 | 158 | | 129section and the date of the subsequent default, the debtor has cured a default after notice three or |
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159 | 159 | | 130more times. |
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160 | 160 | | 131 (c) The notice shall be in writing and shall be given to the debtor ten days or more after |
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161 | 161 | | 132the default. The notice shall conspicuously state the rights of the debtor upon default in |
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162 | 162 | | 133substantially the following form: |
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163 | 163 | | 134 The heading shall read:' 'Rights of Defaulting Consumer under Massachusetts Law.'' The |
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164 | 164 | | 135body of the notice shall read: ''You may cure your default in (describe transaction in a manner 8 of 11 |
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165 | 165 | | 136enabling debtor to identify it) by paying to (name and address of lessor or creditor) (amount due) |
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166 | 166 | | 137before (date which is at least twenty-one days after notice is mailed). |
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167 | 167 | | 138 If you pay this amount within the time allowed you are no longer in default and may |
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168 | 168 | | 139continue with the transaction (lease or loan) as though no default had occurred. |
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169 | 169 | | 140 (d) No court shall enter a deficiency judgment against a debtor which includes a finance |
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170 | 170 | | 141charge or insurance premiums allocable to installments due after repossession. A debtor whose |
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171 | 171 | | 142goods have been repossessed shall not be liable in a civil action for a deficiency unless the |
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172 | 172 | | 143secured party files an affidavit signed either by the purchaser at the sale or by the secured party |
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173 | 173 | | 144stating the price for which the goods were sold and the date and place of sale. Such affidavit |
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174 | 174 | | 145shall be filed with the complaint. |
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175 | 175 | | 146 (e) Unless the secured creditor has first notified the debtor that he has elected to |
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176 | 176 | | 147accelerate the unpaid balance of the obligation because of default, brought action against the |
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177 | 177 | | 148debtor, or proceeded against the collateral, the debtor may cure a default consisting of a failure to |
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178 | 178 | | 149pay money by tendering the amount of all unpaid sums due at the time of tender, without |
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179 | 179 | | 150acceleration, plus any unpaid delinquency or deferral charges. Cure shall restore the debtor to his |
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180 | 180 | | 151rights under the agreement as though the defaults cured have not occurred, subject to the |
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181 | 181 | | 152provisions of subsection (b). |
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182 | 182 | | 153 SECTION 12. Chapter 255 of the general laws, as so appearing in the 2014 edition, shall |
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183 | 183 | | 154be amended by striking out section 13J and replacing it with the following section:- |
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184 | 184 | | 155 Section 13J. (a) Subject to the provisions of this section and section 13I, a secured |
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185 | 185 | | 156creditor under a consumer credit transaction may take possession of collateral. In taking |
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186 | 186 | | 157possession the secured creditor under a consumer credit transaction may proceed without a prior 9 of 11 |
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187 | 187 | | 158hearing only if the default is material and consists of the debtor’s failure to make one or more |
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188 | 188 | | 159payments as required by the agreement or the occurrence of an event which substantially impairs |
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189 | 189 | | 160the value of the collateral, and only if possession can be obtained without use of force, without a |
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190 | 190 | | 161breach of peace and, unless the debtor consents to an entry, at the time of such entry, without |
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191 | 191 | | 162entry upon property owned by, or rented to the debtor. |
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192 | 192 | | 163 (b) Except as provided in subsection (a), a creditor under a consumer credit transaction |
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193 | 193 | | 164may proceed against collateral only after a prior hearing. In any proceeding where possession of |
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194 | 194 | | 165the collateral is part of the relief sought by a creditor no court shall allow a secured creditor or |
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195 | 195 | | 166lessor to take possession of collateral until the right of the creditor or lessor to take possession |
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196 | 196 | | 167has been determined at a hearing at which the consumer has an opportunity to be heard, having |
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197 | 197 | | 168been notified in writing of such hearing at least seven days in advance thereof. |
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198 | 198 | | 169 (c) The consumer under a secured consumer credit transaction may redeem the collateral |
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199 | 199 | | 170from the creditor or lessor at any time within twenty days of the creditor or lessor’s taking |
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200 | 200 | | 171possession of the collateral, or thereafter until the creditor or lessor has either disposed of the |
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201 | 201 | | 172collateral, entered into a contract for its disposition, or gained the right to retain the collateral. |
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202 | 202 | | 173 (d) The creditor or lessor may after gaining possession sell or otherwise dispose of the |
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203 | 203 | | 174collateral. Unless displaced by the provisions of this section and section thirteen I, the rights and |
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204 | 204 | | 175obligations of the parties, including redemption and disposition of the collateral shall be |
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205 | 205 | | 176governed by the provisions of Part 6 of Article 9 of chapter 106, including consumer leases of |
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206 | 206 | | 177motor vehicles, to the extent applicable. Notwithstanding the provisions in Part 6 of Article 9 of |
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207 | 207 | | 178chapter 106, if, in connection with a consumer credit transaction which involves an unpaid |
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208 | 208 | | 179balance of two thousand dollars or less and which is at the time of default secured by a non- 10 of 11 |
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209 | 209 | | 180possessory security interest in consumer goods, the creditor or lessor takes possession of or |
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210 | 210 | | 181accepts surrender of the collateral, the consumer shall not be liable for any deficiency. If the |
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211 | 211 | | 182agreement between the creditor or lessor and consumer provides that the consumer is to obtain |
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212 | 212 | | 183insurance protecting the collateral against fire, theft, collision or other hazards and naming the |
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213 | 213 | | 184creditor or lessor as loss payee and if, prior to the repossession or surrender of the collateral, loss |
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214 | 214 | | 185or damage occurs which would give rise to insurance proceeds under the terms of the policy in |
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215 | 215 | | 186force, then nothing in this section shall be deemed to limit the creditor or lessor’s rights to so |
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216 | 216 | | 187much of the insurance proceeds as does not exceed the fair market value of the collateral existing |
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217 | 217 | | 188just prior to the loss or damage and, if insurance as required by the agreement is not in force at |
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218 | 218 | | 189the time of the loss or damage, nothing in this section shall be deemed to limit the creditor or |
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219 | 219 | | 190lessor’s rights in proceeding against any third party who is responsible for the loss or damage in |
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220 | 220 | | 191the name of the consumer or otherwise. For the purposes of this section the unpaid balance of a |
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221 | 221 | | 192consumer credit transaction shall be that amount which the consumer would have been required |
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222 | 222 | | 193to pay upon prepayment. |
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223 | 223 | | 194 (e) (1) If the unpaid balance of the consumer credit transaction at the time of default was |
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224 | 224 | | 195two thousand dollars or more the creditor or lessor shall be entitled to recover from the consumer |
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225 | 225 | | 196the deficiency, if any, resulting from deducting the fair market value of the collateral from the |
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226 | 226 | | 197unpaid balance due and shall also be entitled to any reasonable repossession and storage costs, |
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227 | 227 | | 198provided he has complied with all provisions of this section. |
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228 | 228 | | 199 (2) In a proceeding for a deficiency the fair market value of the collateral shall be a |
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229 | 229 | | 200question for the court to determine. Periodically published trade estimates of the retail value of |
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230 | 230 | | 201goods shall, to the extent they are recognized in the particular trade or business, be presumed to |
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231 | 231 | | 202be the fair market value of the collateral. 11 of 11 |
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232 | 232 | | 203 (f) Any secured creditor or lessor obtaining possession of a motor vehicle under the |
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233 | 233 | | 204provisions of this section shall, within one hour after obtaining such possession, notify the police |
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234 | 234 | | 205department of the city or town in which such possession occurred, giving such police department |
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235 | 235 | | 206a description of the vehicle involved. |
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236 | 236 | | 207 SECTION 13: Sections 1 through 9 shall not apply to leases in existence before the |
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237 | 237 | | 208effective date of this Act. However, such sections shall apply when, after the effective date of |
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238 | 238 | | 209this Act, a consumer lease is renegotiated by the same lessee for the same motor vehicle. |
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239 | 239 | | 210 SECTION 14. Sections 10 and 11 shall not apply to leases in default before the effective |
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240 | 240 | | 211date of this Act. However, such sections shall apply where a lease in default before the effective |
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241 | 241 | | 212date of this Act at is cured, and then goes into default again after the effective date of this Act. |
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