Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S2284 Compare Versions

Only one version of the bill is available at this time.

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