By Brimer H.B. No. 2182
77R3872 DWS-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain sale-leaseback transactions subject to
1-3 regulation; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 35, Business & Commerce Code, is amended
1-6 by adding Subchapter J to read as follows:
1-7 SUBCHAPTER J. SALE-LEASEBACKS OF CERTAIN CONSUMER GOODS
1-8 Sec. 35.201. DEFINITIONS. In this subchapter:
1-9 (1) "Advertisement" means a commercial message in any
1-10 medium that directly or indirectly promotes or assists a
1-11 sale-leaseback transaction.
1-12 (2) "Consumer" means an individual who enters into a
1-13 sale-leaseback transaction primarily for personal, family, or
1-14 household purposes.
1-15 (3) "Consumer goods" means tangible personal property,
1-16 including an appliance, electronic entertainment equipment, and a
1-17 motor vehicle, used or bought for use primarily for personal,
1-18 family, or household purposes.
1-19 (4) "Merchant" means a person who, in the ordinary
1-20 course of business, regularly engages in the business of buying,
1-21 offering to buy, or arranging to buy consumer goods under a
1-22 sale-leaseback transaction.
1-23 (5) "Sale-leaseback transaction" means a transaction
1-24 that involves the sale by a consumer of a consumer good to a
2-1 merchant and the subsequent leaseback of the consumer good by the
2-2 merchant to the consumer.
2-3 Sec. 35.202. SCOPE, EXEMPTIONS, AND RELATION TO OTHER LAWS.
2-4 (a) This subchapter does not apply to a transaction that involves
2-5 an interest in or lease of real property or a manufactured home,
2-6 including a transaction governed by Section 41.006, Property Code,
2-7 or the Texas Manufactured Housing Standards Act (Article 5221f,
2-8 Vernon's Texas Civil Statutes).
2-9 (b) A sale-leaseback transaction subject to this subchapter
2-10 is also subject, to the extent applicable, to other federal and
2-11 state laws involving sales or leases of personal property,
2-12 including:
2-13 (1) Chapters 2 and 2A;
2-14 (2) Subchapter E, Chapter 17;
2-15 (3) the Consumer Leasing Act (15 U.S.C. Section 1667
2-16 et seq.);
2-17 (4) Regulation M (12 C.F.R. Part 213);
2-18 (5) Chapter 392, Finance Code; and
2-19 (6) the Fair Debt Collection Practices Act (15 U.S.C.
2-20 Section 1692 et seq.).
2-21 (c) A sale-leaseback transaction under this subchapter is
2-22 not a loan, credit sale, or other extension of credit, and is not
2-23 subject to:
2-24 (1) Subchapter F;
2-25 (2) Chapter 9; or
2-26 (3) Title 4, Finance Code.
2-27 (d) Except with respect to a motor vehicle, this subchapter
3-1 does not apply to a sale-leaseback transaction in which the value
3-2 of the consumer good at the time of the transaction exceeds
3-3 $25,000.
3-4 (e) If this subchapter conflicts with another law of this
3-5 state, this subchapter controls. If this subchapter conflicts with
3-6 federal law, federal law controls.
3-7 Sec. 35.203. REGISTRATION. (a) A merchant may not buy,
3-8 offer to buy, or arrange to buy consumer goods under a
3-9 sale-leaseback transaction unless the merchant has registered with
3-10 the secretary of state by filing a statement that:
3-11 (1) contains the name and address of the merchant and
3-12 each person who directly or indirectly owns or controls at least 10
3-13 percent of the outstanding ownership interests in the merchant; and
3-14 (2) contains:
3-15 (A) a statement that fully discloses any
3-16 litigation or unresolved complaint relating to the operation of the
3-17 merchant filed with a governmental authority of this state; or
3-18 (B) a notarized statement that there has been no
3-19 litigation or unresolved complaint of that type.
3-20 (b) The merchant shall keep a copy of the registration
3-21 statement in its files.
3-22 (c) The secretary of state may not require a merchant to
3-23 provide information other than information required by this section
3-24 to be in the registration statement.
3-25 (d) A registration certificate expires on the first
3-26 anniversary of its date of issuance. A registered merchant may
3-27 renew a registration certificate by filing a renewal application,
4-1 in the form prescribed by the secretary of state, and paying the
4-2 renewal fee.
4-3 (e) A merchant shall update information contained in the
4-4 registration statement not later than the 90th day after the date
4-5 on which the information changes.
4-6 (f) A merchant shall allow a consumer to inspect the
4-7 registration statement on request.
4-8 (g) The secretary of state may charge a merchant a
4-9 reasonable fee to cover the cost of filing a registration statement
4-10 or renewal application in an amount not to exceed $250.
4-11 (h) A merchant's failure to register or renew a registration
4-12 under this subchapter does not affect the validity of a
4-13 sale-leaseback transaction. A merchant who does not register is
4-14 liable to the secretary of state for a civil penalty not to exceed
4-15 $5,000 for each year that a registration was required. A merchant
4-16 who does not timely renew a registration is liable to the secretary
4-17 of state for a civil penalty not to exceed $1,000 for each year
4-18 that a renewal was required. A merchant may avoid a civil penalty
4-19 by registering or renewing, as applicable, before being assessed a
4-20 civil penalty and by paying the secretary of state an additional
4-21 fee not to exceed $1,000 with respect to registration and not to
4-22 exceed $250 with respect to each required renewal. A merchant who
4-23 avoids a civil penalty as provided by this subsection is considered
4-24 for all purposes to have had the required registration or renewal
4-25 for the applicable periods. The secretary of state may eliminate
4-26 or lessen a civil penalty or fee under this subsection for good
4-27 cause shown.
5-1 Sec. 35.204. SURETY BOND OR SURETY ACCOUNT. (a) A merchant
5-2 shall establish and maintain a surety bond or surety account as
5-3 provided in this subchapter. A surety bond must be issued by a
5-4 surety company authorized to do business in this state. A surety
5-5 account must be held in trust at a federally insured bank, savings
5-6 bank, savings and loan association, or credit union located in this
5-7 state.
5-8 (b) The merchant shall file with the secretary of state:
5-9 (1) a copy of the bond; or
5-10 (2) the name of the depository and the trustee and the
5-11 account number of the surety account.
5-12 (c) A separate surety bond or account of $10,000 shall be
5-13 established and maintained for each office at which the merchant
5-14 conducts sale-leaseback transactions.
5-15 (d) The surety bonds or accounts of a merchant must be in
5-16 favor of:
5-17 (1) this state for the benefit of a consumer damaged
5-18 by a violation of this subchapter; and
5-19 (2) a consumer damaged by a violation of this
5-20 subchapter.
5-21 (e) A consumer making a claim against a surety bond or
5-22 account of a merchant for a violation of this subchapter may file
5-23 suit against the merchant and the surety or trustee.
5-24 (f) A surety or trustee is liable only for actual damages,
5-25 reasonable attorney's fees, and court costs awarded as provided by
5-26 this subchapter.
5-27 (g) The aggregate liability of a surety or trustee for a
6-1 merchant's violation of this subchapter may not exceed the amount
6-2 of the applicable surety bond or account.
6-3 (h) The surety bond or account of a merchant must be
6-4 maintained until the second anniversary of the date on which the
6-5 merchant ceases operations.
6-6 (i) A depository may not pay money in a surety account to
6-7 the merchant that established the account or a representative of
6-8 the merchant unless the merchant or representative presents a
6-9 statement issued by the secretary of state indicating that the
6-10 requirement of Subsection (h) has been satisfied in relation to the
6-11 account.
6-12 (j) A merchant's failure to establish or maintain a surety
6-13 bond or account under this subchapter does not affect the validity
6-14 of a sale-leaseback transaction. A merchant who does not establish
6-15 and maintain a surety bond or account as required under this
6-16 subchapter is liable to the secretary of state for a civil penalty
6-17 not to exceed $5,000 for each year that a surety bond or account
6-18 was required. A merchant may avoid a civil penalty by taking
6-19 corrective action before being assessed a civil penalty and paying
6-20 the secretary of state a late fee not to exceed $1,000. A merchant
6-21 who avoids a civil penalty as provided by this subsection is
6-22 considered for all purposes to have had the required surety bond or
6-23 account for the applicable periods. The secretary of state may
6-24 eliminate or lessen a civil penalty or fee under this subsection
6-25 for good cause shown.
6-26 Sec. 35.205. PURCHASE BY MERCHANT. (a) The purchase of a
6-27 consumer's goods by a merchant must be in writing in plain English
7-1 and in any other language used by the merchant in an advertisement
7-2 related to the sale-leaseback transaction. Numerical amounts must
7-3 be stated in figures.
7-4 (b) Disclosures required by this subchapter must be printed
7-5 or typed in each sale-leaseback agreement in a size equal to at
7-6 least 10-point bold-faced type. The attorney general shall provide
7-7 a form agreement that may be used to satisfy the requirements of
7-8 this subchapter.
7-9 (c) The purchase must be documented by a written bill of
7-10 sale that contains:
7-11 (1) the title "bill of sale";
7-12 (2) the name and address of the consumer and the
7-13 merchant;
7-14 (3) a description of the consumer goods sold;
7-15 (4) the representations or warranties, if any,
7-16 provided by the consumer and any related disclaimers;
7-17 (5) the purchase price;
7-18 (6) a notice of the consumer's right to cancel as
7-19 provided by this subchapter;
7-20 (7) the notice required by Subsection (e);
7-21 (8) the date of the transaction; and
7-22 (9) the consumer's signature.
7-23 (d) Except for a warranty of title, the consumer is
7-24 considered not to provide any express or implied warranties not
7-25 set forth in the bill of sale.
7-26 (e) The bill of sale must conspicuously disclose
7-27 substantially the following notice in close proximity to the place
8-1 for the consumer's signature:
8-2 "NOTICE TO CONSUMER: THIS IS A BILL OF SALE BY WHICH YOU ARE
8-3 SELLING YOUR PERSONAL PROPERTY DESCRIBED ABOVE IN CONNECTION WITH A
8-4 SALE-LEASEBACK TRANSACTION UNDER SUBCHAPTER J, CHAPTER 35,
8-5 BUSINESS & COMMERCE CODE. YOU ARE ENTITLED TO ALL OF THE RIGHTS OF
8-6 A CONSUMER UNDER THAT SUBCHAPTER.
8-7 YOU HAVE THE RIGHT TO CANCEL THIS SALE-LEASEBACK TRANSACTION
8-8 AT ANY TIME BEFORE MIDNIGHT OF THE THIRD CALENDAR DAY AFTER THE
8-9 DATE OF THE TRANSACTION. SEE THE SEPARATE NOTICE OF CANCELLATION
8-10 FORM FOR AN EXPLANATION OF THIS RIGHT.
8-11 YOU ALSO HAVE THE RIGHT TO TERMINATE THE LEASE AGREEMENT
8-12 EARLY, AT ANY TIME, WITHOUT PENALTY BY RETURNING THE CONSUMER GOODS
8-13 TO THE MERCHANT IN THE SAME CONDITION AS RECEIVED, REASONABLE WEAR
8-14 AND TEAR EXCEPTED. IF YOU CHOOSE TO EXERCISE YOUR RIGHT TO
8-15 TERMINATE EARLY, YOU WOULD ONLY OWE RENTALS AND FEES UP TO THAT
8-16 DATE.
8-17 YOU MAY PERMANENTLY LOSE POSSESSION OF THIS PROPERTY IF YOU
8-18 DO NOT COMPLY WITH THE TERMS OF THE RELATED LEASE AGREEMENT."
8-19 Sec. 35.206. LEASEBACK TO CONSUMER. (a) Except as provided
8-20 by this subchapter, a merchant and consumer as part of a
8-21 sale-leaseback transaction may enter into a lease under which the
8-22 consumer leases from the merchant the consumer goods that the
8-23 consumer originally sold to the merchant, for the rental and on the
8-24 terms agreed on in writing between the consumer and merchant.
8-25 (b) A lease agreement must be in writing in plain English
8-26 and in any other language used by the merchant in an advertisement
8-27 related to the sale-leaseback transaction.
9-1 (c) Disclosures required by this subchapter must be printed
9-2 or typed in each sale-leaseback agreement in a size equal to at
9-3 least 10-point bold-faced type. The attorney general shall provide
9-4 a form agreement that may be used to satisfy the requirements of
9-5 this subchapter.
9-6 (d) The lease agreement must contain:
9-7 (1) the title "lease agreement";
9-8 (2) the name and address of the merchant and the
9-9 consumer;
9-10 (3) a description of the consumer goods leased;
9-11 (4) the representations or warranties, if any,
9-12 provided by the merchant and any related disclaimers;
9-13 (5) the original purchase price for the consumer goods
9-14 as shown in the consumer's bill of sale to the merchant;
9-15 (6) the amount or method of determining any rental,
9-16 fees, or charges related to the lease agreement;
9-17 (7) the amount and timing of payments;
9-18 (8) the notice required by Subsection (e);
9-19 (9) a right to cancel as provided by this subchapter;
9-20 (10) the other terms, conditions, and disclosures
9-21 required for lease agreements under this subchapter;
9-22 (11) the date of the transaction; and
9-23 (12) the merchant's and consumer's signatures.
9-24 (e) The original lease agreement must conspicuously disclose
9-25 substantially the following notice in close proximity to the place
9-26 for the consumer's signature:
9-27 "NOTICE TO CONSUMER: THIS IS A LEASE AGREEMENT OF CONSUMER
10-1 GOODS IN CONNECTION WITH A SALE-LEASEBACK TRANSACTION UNDER
10-2 SUBCHAPTER J, CHAPTER 35, BUSINESS & COMMERCE CODE. YOU ARE
10-3 ENTITLED TO ALL OF THE RIGHTS OF A CONSUMER UNDER THAT SUBCHAPTER.
10-4 YOU HAVE THE RIGHT TO CANCEL THIS SALE-LEASEBACK TRANSACTION
10-5 AT ANY TIME BEFORE MIDNIGHT OF THE THIRD CALENDAR DAY AFTER THE
10-6 DATE OF THE TRANSACTION. SEE THE SEPARATE NOTICE OF CANCELLATION
10-7 FORM FOR AN EXPLANATION OF THIS RIGHT.
10-8 YOU ALSO HAVE THE RIGHT TO TERMINATE THE LEASE AGREEMENT
10-9 EARLY, AT ANY TIME, WITHOUT PENALTY BY RETURNING THE CONSUMER GOODS
10-10 TO THE MERCHANT IN THE SAME CONDITION AS RECEIVED, REASONABLE WEAR
10-11 AND TEAR EXCEPTED. IF YOU TERMINATE EARLY, YOU WOULD ONLY OWE
10-12 RENTALS AND OTHER CHARGES UP TO THAT DATE.
10-13 YOU MAY PERMANENTLY LOSE POSSESSION OF THIS PROPERTY IF YOU
10-14 DO NOT COMPLY WITH THE TERMS OF THE RELATED LEASE AGREEMENT."
10-15 (f) The merchant is considered not to provide any express or
10-16 implied warranties not set forth in the lease agreement.
10-17 (g) The lease agreement must provide that the consumer may
10-18 terminate the lease at any time without penalty by returning the
10-19 consumer goods to the merchant in the same condition as received,
10-20 reasonable wear and tear excepted. If the lease is terminated
10-21 early, the consumer is only obligated to pay the merchant any
10-22 rental or other fees or charges accrued through the date of the
10-23 return.
10-24 (h) With respect to consumer goods other than a motor
10-25 vehicle, the lease agreement must provide that the merchant shall
10-26 repair or replace the consumer goods during the term of the lease,
10-27 if requested by the consumer, or terminate the lease agreement
11-1 without further obligation by the consumer except as to rentals and
11-2 other charges accrued up to that date.
11-3 (i) The lease agreement may provide that there is no grace
11-4 period.
11-5 (j) With respect to consumer goods other than a motor
11-6 vehicle, the lease agreement may provide for a daily late rental
11-7 fee not to exceed $4 for each item of consumer goods. With respect
11-8 to a motor vehicle, the lease agreement may provide for a late
11-9 rental fee not to exceed the greater of five percent of the rental
11-10 payment or $15 if the rental payment remains unpaid after the fifth
11-11 day after its due date. Only one late charge or late fee may be
11-12 collected on a payment regardless of the period during which the
11-13 payment remains in default.
11-14 (k) The lease agreement may provide for a dishonored check
11-15 charge not to exceed $25 as permitted by Chapter 617, Acts of the
11-16 68th Legislature, Regular Session, 1983 (Article 9022, Vernon's
11-17 Texas Civil Statutes).
11-18 (l) The lease agreement must provide the consumer a right to
11-19 reinstate the lease following default, without losing rights or
11-20 options previously acquired, by taking the required action within
11-21 seven calendar days, except that the merchant may seek repossession
11-22 and sale of the consumer goods during the reinstatement period and
11-23 the consumer's right to reinstate does not expire because of the
11-24 repossession. If the consumer goods are returned by the consumer
11-25 during the applicable reinstatement period, other than through
11-26 judicial process, the consumer's right to reinstate is extended for
11-27 a period of seven calendar days after the date of the return. On
12-1 reinstatement, the merchant shall provide the consumer with the
12-2 same consumer goods or consumer goods of comparable quality and
12-3 condition and the lease agreement shall be amended correspondingly.
12-4 (m) A renewal, extension, or modification of a lease
12-5 agreement must be in writing, signed by the consumer and the
12-6 merchant, and must conspicuously disclose substantially the
12-7 following notice in close proximity to the place for the consumer's
12-8 signature:
12-9 "NOTICE TO CONSUMER: THIS IS A RENEWAL, EXTENSION, OR
12-10 MODIFICATION OF A LEASE AGREEMENT OF CONSUMER GOODS IN CONNECTION
12-11 WITH A SALE-LEASEBACK TRANSACTION UNDER SUBCHAPTER J, CHAPTER 35,
12-12 BUSINESS & COMMERCE CODE. YOU ARE ENTITLED TO ALL OF THE RIGHTS OF
12-13 A CONSUMER UNDER THAT SUBCHAPTER.
12-14 YOU ARE NOT REQUIRED TO RENEW, EXTEND, OR MODIFY THE LEASE
12-15 AGREEMENT.
12-16 YOU HAVE THE RIGHT TO TERMINATE THE LEASE AGREEMENT EARLY, AT
12-17 ANY TIME, WITHOUT PENALTY BY RETURNING THE CONSUMER GOODS TO THE
12-18 MERCHANT IN THE SAME CONDITION AS RECEIVED, REASONABLE WEAR AND
12-19 TEAR EXCEPTED. IF YOU TERMINATE EARLY, YOU WOULD ONLY OWE RENTALS
12-20 AND OTHER CHARGES UP TO THAT DATE.
12-21 YOU MAY PERMANENTLY LOSE POSSESSION OF THIS PROPERTY IF YOU
12-22 DO NOT COMPLY WITH THE TERMS OF THE RELATED LEASE AGREEMENT."
12-23 (n) The lease agreement must set forth each option, if any,
12-24 that the consumer has to purchase the consumer goods from the
12-25 merchant during or at the end of the lease term. The inclusion of
12-26 an option to purchase does not change the character of the
12-27 agreement as a lease.
13-1 Sec. 35.207. REPURCHASE BY CONSUMER. (a) A repurchase must
13-2 be documented by a written bill of sale that contains:
13-3 (1) the title "bill of sale";
13-4 (2) the name and address of the merchant and the
13-5 consumer;
13-6 (3) a description of the consumer goods sold;
13-7 (4) the representations or warranties, if any,
13-8 provided by the merchant and any related disclaimers;
13-9 (5) the purchase price;
13-10 (6) a notice of the consumer's right to cancel as
13-11 provided by this subchapter;
13-12 (7) the notice required by Subsection (c);
13-13 (8) the date of the transaction; and
13-14 (9) the merchant's signature.
13-15 (b) The merchant is considered not to provide any express or
13-16 implied warranties not set forth in the bill of sale.
13-17 (c) The bill of sale must conspicuously disclose
13-18 substantially the following notice:
13-19 "NOTICE TO CONSUMER: THIS IS A BILL OF SALE BY WHICH YOU ARE
13-20 REPURCHASING PERSONAL PROPERTY DESCRIBED ABOVE IN CONNECTION WITH A
13-21 SALE-LEASEBACK TRANSACTION UNDER SUBCHAPTER J, CHAPTER 35, BUSINESS
13-22 & COMMERCE CODE. YOU ARE ENTITLED TO ALL OF THE RIGHTS OF A
13-23 CONSUMER UNDER THAT SUBCHAPTER."
13-24 Sec. 35.208. CONSUMER'S RIGHT TO CANCEL. (a) A consumer may
13-25 cancel the original transaction at any time before midnight of the
13-26 third calendar day after the date of the original transaction by
13-27 providing the merchant with a notice of cancellation and
14-1 immediately returning any money received from the merchant.
14-2 (b) The original bill of sale and lease agreement must
14-3 include two copies of a cancellation notice. The notice of
14-4 cancellation must be written in plain English and in any other
14-5 language used by the merchant in an advertisement related to the
14-6 sale-leaseback transaction.
14-7 (c) The notice of cancellation must be printed or typed in a
14-8 size equal to at least 10-point bold-faced type and in
14-9 substantially the following form:
14-10 "NOTICE OF CANCELLATION: THIS IS A SALE-LEASEBACK
14-11 TRANSACTION UNDER SUBCHAPTER J, CHAPTER 35, BUSINESS & COMMERCE
14-12 CODE. YOU HAVE ALL THE RIGHTS OF A CONSUMER UNDER THAT SUBCHAPTER.
14-13 YOU MAY PERMANENTLY LOSE POSSESSION OF THE PERSONAL PROPERTY
14-14 IF YOU DO NOT COMPLY WITH THE TERMS OF THE LEASE AGREEMENT.
14-15 YOU MAY CANCEL THIS SALE-LEASEBACK TRANSACTION, WITHOUT ANY
14-16 PENALTY, OBLIGATION, OR CHARGE, BEFORE MIDNIGHT OF THE THIRD
14-17 CALENDAR DAY AFTER THE DATE OF THIS TRANSACTION BY PROVIDING THE
14-18 NOTICE DESCRIBED AND RETURNING TO THE MERCHANT ALL MONEY RECEIVED
14-19 BY YOU.
14-20 IF YOU CHOOSE TO EXERCISE YOUR RIGHT TO CANCEL, ANY BILL OF
14-21 SALE BY YOU UNDER THIS TRANSACTION WILL BE CANCELED WITHIN FIVE
14-22 BUSINESS DAYS AFTER THE DATE OF RECEIPT BY THE MERCHANT OF YOUR
14-23 CANCELLATION NOTICE AND YOUR RETURN OF THE MONEY YOU RECEIVED. TO
14-24 CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED DATED COPY OF
14-25 THIS CANCELLATION NOTICE, OR OTHER WRITTEN NOTICE, TO: (NAME OF
14-26 SELLER) AT (ADDRESS OF SELLER) (PLACE OF BUSINESS) NOT LATER THAN
14-27 MIDNIGHT (DATE--THIRD CALENDAR DAY AFTER THE DATE OF THE ORIGINAL
15-1 TRANSACTION). I CANCEL THIS TRANSACTION, SUBJECT TO MY IMMEDIATELY
15-2 RETURNING TO YOU THE MONEY I RECEIVED. (DATE) (PURCHASER'S
15-3 SIGNATURE)"
15-4 (d) Not later than the fifth business day after the date of
15-5 the merchant's timely receipt of the consumer's notice of
15-6 cancellation and return of the money received by the consumer, the
15-7 merchant shall cancel the transaction without penalty, obligation,
15-8 or charge to the consumer.
15-9 (e) The right to cancel does not apply to a renewal,
15-10 extension, or modification of a lease agreement.
15-11 Sec. 35.209. ADVERTISEMENT. An advertisement for a
15-12 sale-leaseback transaction must clearly state that the transaction
15-13 advertised is a sale-leaseback transaction and that the business is
15-14 registered with the secretary of state.
15-15 Sec. 35.210. OTHER PROVISIONS. (a) A notice, term, or other
15-16 written material required by this subchapter may:
15-17 (1) include proper names instead of personal pronouns;
15-18 (2) interchange third-person pronouns and first-person
15-19 pronouns; and
15-20 (3) consist of more than one page or document.
15-21 (b) The bill of sale, the lease agreement, or a separate
15-22 written statement must explain the consumer's right to proceed
15-23 against the surety bond or account required under this subchapter,
15-24 including the name and address of the surety company or depository
15-25 and trustee as applicable.
15-26 (c) A sale-leaseback transaction may include an agreement to
15-27 submit any disputes to mediation or binding arbitration.
16-1 (d) At the time of the transaction the consumer shall be
16-2 provided a copy of the bill of sale, lease agreement, and other
16-3 transaction documents without any spaces to be filled in after
16-4 consummation of the transaction.
16-5 (e) A merchant is not responsible for a consumer's use or
16-6 operation of a consumer good.
16-7 (f) Except as provided by Section 35.211(b), a merchant may
16-8 pursue all lawfully permitted process and remedies for enforcement
16-9 of the merchant's rights in connection with the sale-leaseback
16-10 transaction, including any civil and criminal process regarding the
16-11 merchant's ownership of the consumer goods.
16-12 (g) A sale-leaseback transaction under this subchapter is a
16-13 lease for which sales tax is due on the rental, but sales tax is
16-14 not due on the original sale to the merchant or any repurchase by
16-15 the consumer.
16-16 (h) An act or agreement of the consumer before or at the
16-17 time of the making of a sale-leaseback transaction does not waive
16-18 any provision of this subchapter.
16-19 Sec. 35.211. PROHIBITED PRACTICES. (a) A bill of sale or
16-20 lease agreement associated with a sale-leaseback agreement may not
16-21 contain a provision:
16-22 (1) requiring a confession of judgment;
16-23 (2) authorizing a merchant or anyone acting on the
16-24 merchant's behalf to commit a breach of the peace in the
16-25 repossession of the consumer goods; or
16-26 (3) waiving any claim or defense the consumer may have
16-27 arising out of the sale-leaseback transaction.
17-1 (b) A merchant may not take a security deposit without
17-2 disclosing in writing the amount of the security deposit and the
17-3 terms on which the security deposit may be applied by the merchant.
17-4 A security deposit that is a check, draft, share draft, or other
17-5 instrument drawn by a consumer on a depository account of the
17-6 consumer must be made payable to the merchant and dated as of the
17-7 date of transaction. Criminal proceedings may not be instituted
17-8 because the security deposit instrument is returned or dishonored
17-9 due to insufficient funds, closed account, or stop payment order,
17-10 but the merchant may pursue all available civil process for
17-11 collection of the instrument.
17-12 Sec. 35.212. CONSUMER REMEDIES. (a) A consumer damaged by a
17-13 violation of this subchapter by a merchant may recover from the
17-14 merchant:
17-15 (1) actual damages; and
17-16 (2) reasonable attorney's fees and court costs.
17-17 (b) A violation of this subchapter is a deceptive trade
17-18 practice under Subchapter E, Chapter 17. A consumer may recover
17-19 damages as provided by that subchapter.
17-20 (c) As part of a consumer's recovery, a consumer may proceed
17-21 against a merchant's surety bond or surety account as provided by
17-22 Section 35.204.
17-23 (d) An action under this subchapter must be brought within
17-24 two years of the date of violation.
17-25 SECTION 2. This Act takes effect September 1, 2001.