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A BILL TO BE ENTITLED
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AN ACT
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relating to rental agreements. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Business and Commerce Code Title 5, Regulation |
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of Businesses and Services, Subtitle B, Rental Practices, is |
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amended by adding Chapter 93 to read as follows: |
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CHAPTER 93. RENTAL AGREEMENTS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 93.001. DEFINITIONS. In this chapter: |
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(1) "Commission" means the Texas Commission of |
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Licensing and Regulation. |
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(2) "Consumer" means an individual who rents personal |
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property under a rental agreement. |
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(3) "Department" means the Texas Department of |
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Licensing and Regulation. |
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(4) "Loss damage waiver" means a rental company's |
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agreement to not hold a consumer liable for loss from all or part of |
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any damage to merchandise. |
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(5) "Merchandise" means the personal property that is |
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the subject of a rental agreement. |
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(6) "Rental agreement" means an agreement for 30 days |
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or less that states the terms governing the consumers use of |
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merchandise rented by a rental company and that does not permit the |
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consumer to become the owner of the merchandise. |
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(7) "Rental Company" means a person who, in the |
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ordinary course of business, regularly rents, offers to rent, or |
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arranges for the renting of merchandise under a rental agreement. |
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SUBCHAPTER B. FORM AND CONTENT OF AGREEMENTS |
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Sec. 93.051. FORM OF AGREEMENT. (a) A rental agreement |
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must be written in plain English. |
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(b) A numerical amount included in a rental agreement must |
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be stated in figures. |
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(c) A disclosure required by this chapter must be printed or |
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typed in each rental agreement in a size equal to at least 10-point |
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boldfaced type. |
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Sec. 93.052. REQUIRED DISCLOSURES. (a) A rental agreement |
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must disclose: |
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(1) the rental time period; |
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(2) the base charge for the rental time period; |
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(3) the amount and purpose of any payment, charge, or |
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fee in addition to the base charge for the rental time period; and |
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(4) whether the consumer is liable for loss or damage |
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to the merchandise and, if so, the maximum amount for which the |
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consumer may be liable. |
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Sec. 93.053. OTHER REQUIRED PROVISIONS. A rental agreement |
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must provide that any payment, charge, or fee in addition to the |
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base charge for the rental time period must be reasonably related to |
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the service performed. |
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Sec. 93.054. PROHIBITED PROVISIONS. (a) A rental |
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agreement may not: |
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(1) require a consumer to purchase insurance or a loss |
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damage waiver from the rental company to cover the merchandise; |
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(2) require a confession of judgment; or |
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(3) waive a defense, counterclaim, or right the |
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consumer may have against the rental company or an agent of the |
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rental company. |
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SUBCHAPTER C. LOSS DAMAGE WAIVERS AND MANDATORY CHARGES |
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Sec. 93.101. LOSS DAMAGE WAIVER MUST BE AGREED TO IN |
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WRITING. The purchase of a loss damage waiver must be agreed to in |
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writing by the consumer at or before the time the rental agreement |
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is executed. |
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Sec. 93.102. NOTICE TO CONSUMER. A rental agreement that |
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offers a loss damage waiver must include the following notice: |
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NOTICE: Your rental agreement offers, for an additional |
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charge, an optional waiver to cover all or a part of your |
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responsibility for damage to or loss to the merchandise rented. |
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Before deciding whether to purchase the waiver, you may wish to |
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determine whether your own homeowners or renters insurance or |
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credit card agreement provides you coverage for loss or damage to |
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rental merchandise and the amount of the deductible you would pay |
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under your own insurance coverage. The purchase of the waiver is |
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not mandatory. The waiver is not insurance. |
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Sec. 93.103. POSTED NOTICE. In addition to providing the |
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notice required by Section 91.052, a rental company shall post in a |
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conspicuous location where the damage waiver is offered the |
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following notice: |
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Notice to Texas Residents Regarding Loss Damage Waivers |
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Your homeowners or renters insurance policy may or may |
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not provide coverage for your responsibility for the loss of or |
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damage to rented merchandise during the rental term. Before |
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deciding whether to purchase a loss damage waiver, you may wish to |
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determine whether your homeowners or renters insurance policy |
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provides you coverage for damage or loss to the rented merchandise. |
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Sec. 93.104. PROHIBITED REPRESENTATIONS AND COERCION. (a) |
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An employee or agent of a rental company may not: |
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(1) make an oral or written representation that |
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contradicts this chapter; or |
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(2) use coercive language or a coercive act in an |
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attempt to persuade a consumer to purchase a damage waiver. |
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(b) For purposes of this section, if the consumer has |
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declined the damage waiver, a further statement or question by the |
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employee or agent that refers to the damage waiver, other than a |
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statement made in conjunction with review of the rental agreement |
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that the waiver has been declined, is considered coercive. |
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Sec. 93.105. MANDATORY CHARGE. (a) A rental company that |
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includes a mandatory charge in a rental agreement shall prominently |
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display and fully disclose the charge: |
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(1) separately on the face of the agreement; and |
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(2) in all of the rental company's price advertising, |
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price quotes, price offers, and price displays, including displays |
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in computerized reservation systems. |
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(b) A rental company may not impose or require the purchase |
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of a loss damage waiver as a mandatory charge. |
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Sec. 93.106. AUTHORIZED EXCLUSIONS. A loss damage waiver |
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may exclude: |
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(1) damage that is intentionally caused by the |
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consumer or; |
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(2) damage that results from the consumer's wilful or |
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wanton misconduct. |
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Sec. 93.107. RELATIONSHIP TO INSURANCE. A loss damage |
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waiver is not insurance. |
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Sec. 93.108. RULES. The commission may adopt rules |
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consistent with this chapter relating to loss damage waivers in |
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rental agreements. |
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Sec. 93.109. FEES. The commission may by rule establish a |
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fee for the administration of this chapter by the department. |
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SUBCHAPTER D. ENFORCEMENT PROVISIONS |
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Sec. 93.151. ADMINISTRATIVE ENFORCEMENT OF CHAPTER. (a) The |
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department shall enforce this chapter and, as necessary may |
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investigate a rental company who has one of more rental agreements |
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that include a loss damage waiver. |
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(b) A person may file a complaint with the department |
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alleging a violation of this chapter. The department shall |
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investigate the alleged violation on receipt of the complaint and |
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may inspect any record relevant to the complaint. |
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(c) If, as a result of an investigation the department |
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determines that a violation may have occurred, the commission shall |
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provide an opportunity for a hearing in the manner provided for a |
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contested case under Chapter 2001, Government Code. |
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(d) If, after opportunity for hearing, the commission |
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determines that the rental company has violated this chapter, the |
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commission may: |
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(1) impose an administrative penalty under Chapter 51, |
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Occupations Code; and |
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(2) award the complainant damages in an amount not to |
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exceed the amount of the price in the rental agreement. |
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Sec. 93.152. CIVIL ACTION FOR VIOLATION OF CHAPTER. (a) A |
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consumer damaged by a rental company's violation of this chapter is |
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entitled to recover from the rental company: |
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(1) actual damages; and |
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(2) reasonable attorney's fees and court costs. |
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(b) A rental company is not liable under this section for a |
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violation of this chapter caused by the rental company's error if, |
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subject to Subsection (c), the rental company: |
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(1) provides the consumer written notice of the error; |
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and |
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(2) makes adjustments in the consumer's account as |
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necessary to ensure: |
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(A) the consumer will not be required to pay an |
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amount in excess of the amount disclosed; and |
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(B) the agreement otherwise complies with this |
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chapter. |
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(c) A rental company must take action under Subsection (b) |
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before: |
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(1) the 31st day after the date the rental company |
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discovers the error; and |
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(2) the rental company receives written notice of the |
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error from the consumer or an action under this section is filed. |
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Sec. 93.153. DECEPTIVE TRADE PRACTICE. A violation of this |
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chapter is a deceptive trade practice under Subchapter E, Chapter |
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17. |
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SECTION 2. Business and Commerce Code Title 5, Regulation |
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of Businesses and Services, Subtitle B, Rental Practices, is |
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amended by adding Chapter 94 to read as follows: |
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CHAPTER 94. COMMERCIAL RENTAL AGREEMENTS |
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Sec. 94.001. DEFINITIONS. In this chapter: |
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(1) "Business" means a trade, occupation, profession, |
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or other commercial activity. |
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(2) "Department" means the Texas Department of |
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Licensing and Regulation. |
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(3) "Loss damage waiver" means a rental company's |
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agreement to not hold a business liable for loss from all or part of |
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any damage to merchandise. |
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(4) "Rental agreement" means an agreement that states |
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the terms governing the use of merchandise rented by a rental |
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company and that does not permit the consumer to become the owner of |
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the merchandise. |
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(5) "Rental Company" means a person who, in the |
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ordinary course of business, regularly rents, offers to rent, or |
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arranges for the renting of merchandise under a rental agreement. |
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Sec. 94.002. RENTAL AGREEMENTS WITH BUSINESSES EXEMPTED |
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FROM DEPARTMENT REGULATION. The Department shall not regulate |
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rental agreements with businesses. |
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Sec. 94.003. RELATIONSHIP OF LOSS DAMAGE WAIVERS TO |
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INSURANCE. A loss damage waiver in a rental agreement with a |
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business is not insurance. |
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SECTION 3. This Act applies to rental agreements entered |
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into on or after January 1, 2010. A rental agreement entered into |
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before January 1, 2010, is governed by the law in effect immediately |
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before the effective date, and the former law is continued in effect |
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for that purpose. |
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SECTION 4. This Act takes effect September 1, 2009. |