CHAPTER 92. RENTAL-PURCHASE AGREEMENTS
BUSINESS AND COMMERCE CODE
TITLE 5. REGULATION OF BUSINESSES AND SERVICES
SUBTITLE B. RENTAL PRACTICES
CHAPTER 92. RENTAL-PURCHASE AGREEMENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 92.001. DEFINITIONS. In this chapter:
(1) "Advertisement" means a commercial message in any medium
that directly or indirectly promotes or assists a rental-purchase
agreement.
(2) "Commission" means the Texas Commission of Licensing and
Regulation.
(3) "Consumer" means an individual who leases personal property
under a rental-purchase agreement.
(4) "Department" means the Texas Department of Licensing and
Regulation.
(5) "Loss damage waiver" means a merchant's agreement to not
hold a consumer liable for loss from all or part of any damage to
merchandise.
(6) "Merchandise" means the personal property that is the
subject of a rental-purchase agreement.
(7) "Merchant" means a person who, in the ordinary course of
business, regularly leases, offers to lease, or arranges for the
leasing of merchandise under a rental-purchase agreement. The
term includes a person who is assigned an interest in a
rental-purchase agreement.
(8) "Rental-purchase agreement" means an agreement under which a
consumer may use merchandise for personal, family, or household
purposes for an initial period of four months or less, and that:
(A) is automatically renewable with each payment after the
initial period; and
(B) permits the consumer to become the owner of the merchandise.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.002. ADVERTISEMENT REQUIREMENTS. An advertisement for a
rental-purchase agreement that refers to or states the amount of
a payment or the right to acquire ownership of any one particular
item under the agreement must clearly and conspicuously state:
(1) that the transaction advertised is a rental-purchase
agreement;
(2) the total amount and number of payments necessary to acquire
ownership; and
(3) that the consumer does not acquire ownership rights unless
the merchandise is rented for a specified number of payment
periods.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
SUBCHAPTER B. FORM AND CONTENT OF AGREEMENTS
Sec. 92.051. FORM OF AGREEMENT. (a) A rental-purchase
agreement must be written in:
(1) plain English; and
(2) any other language used by the merchant in an advertisement
related to the agreement.
(b) A numerical amount included in a rental-purchase agreement
must be stated in figures.
(c) A disclosure required by this chapter must be printed or
typed in each rental-purchase agreement in a size equal to at
least 10-point boldfaced type.
(d) The attorney general shall provide a form agreement that may
be used to satisfy the requirements of a rental-purchase
agreement under this chapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.052. REQUIRED DISCLOSURES. (a) A rental-purchase
agreement must disclose:
(1) whether the merchandise is new or used;
(2) the price for which the merchant would have sold the
merchandise to the consumer for cash on the date of the
agreement;
(3) the amount and timing of payments;
(4) the total number of payments necessary and the total amount
to be paid to acquire ownership of the merchandise;
(5) that the consumer does not acquire ownership rights unless
the consumer complies with the ownership terms of the agreement;
(6) the amount and purpose of any payment, charge, or fee in
addition to the regular periodic payments; and
(7) whether the consumer is liable for loss or damage to the
merchandise and, if so, the maximum amount for which the consumer
may be liable.
(b) Notice of the right to reinstate the agreement must be
disclosed in the agreement.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.053. OTHER REQUIRED PROVISIONS. A rental-purchase
agreement must provide that:
(1) any charge in addition to periodic payments must be
reasonably related to the service performed; and
(2) a consumer who fails to make a timely payment may reinstate
an agreement, without losing any right or option previously
acquired, by taking the required action before the later of:
(A) one week after the due date of the payment; or
(B) the number of days after the due date of the payment that is
equal to half the number of days in a regular payment period.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.054. PROHIBITED PROVISIONS. (a) A rental-purchase
agreement may not:
(1) require a consumer to:
(A) pay a late charge or reinstatement fee except as provided by
Section 92.055(b);
(B) make a payment at the end of the scheduled rental-purchase
term in excess of or in addition to a regular periodic payment to
acquire ownership of the merchandise; or
(C) purchase insurance or a loss damage waiver from the merchant
to cover the merchandise;
(2) require a confession of judgment;
(3) authorize a merchant or an agent of the merchant to commit a
breach of the peace in repossessing merchandise; or
(4) waive a defense, counterclaim, or right the consumer may
have against the merchant or an agent of the merchant.
(b) A consumer may not in any event be required to pay a sum
greater than the total amount to be paid to acquire ownership of
the merchandise as disclosed under Section 92.052(a)(4).
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.055. RESTRICTIONS ON LATE CHARGES AND REINSTATEMENT
FEES. (a) Only one late charge or reinstatement fee may be
collected on a payment regardless of the period during which the
payment remains in default.
(b) A rental-purchase agreement may require the consumer to pay
a late charge or reinstatement fee only if:
(1) a periodic payment is delinquent for more than:
(A) seven days, if the payment is due monthly; or
(B) three days, if the payment is due more frequently than
monthly; and
(2) the charge or fee is in an amount not less than $5 and not
more than the lesser of:
(A) $10; or
(B) 10 percent of the delinquent payment.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
SUBCHAPTER C. REPOSSESSION AND REINSTATEMENT
Sec. 92.101. MERCHANT'S REPOSSESSION RIGHT. This chapter does
not prevent a merchant from attempting repossession of
merchandise during the reinstatement period.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.102. EFFECT OF REPOSSESSION DURING REINSTATEMENT PERIOD.
A consumer's right to reinstate a rental-purchase agreement is
not affected by the merchant's repossession of the merchandise
during the reinstatement period.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.103. EFFECT ON REINSTATEMENT PERIOD OF MERCHANDISE
RETURN. If merchandise is returned during the applicable
reinstatement period, other than through judicial process, the
right to reinstate the rental-purchase agreement is extended for
a period of not less than 30 days after the date of return.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.104. MERCHANT'S DUTIES ON REINSTATEMENT. (a) On
reinstatement, the merchant shall provide the consumer with:
(1) the same merchandise; or
(2) substitute merchandise of comparable quality and condition.
(b) A merchant who provides the consumer with substitute
merchandise shall also provide the consumer with the disclosures
required by Section 92.052(a).
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
SUBCHAPTER D. LOSS DAMAGE WAIVERS
Sec. 92.151. CONTRACT FOR WAIVER. In addition to other charges
permitted by this chapter, a consumer may contract for a loss
damage waiver.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.152. CHARGE FOR WAIVER. A merchant may charge a
periodic fee for a loss damage waiver in an amount not to exceed
10 percent of the periodic rental payment.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.153. RESTRICTIONS ON MERCHANT CONCERNING WAIVER. A
merchant may not:
(1) sell a loss damage waiver unless:
(A) the department has approved the form of the contract
containing the waiver; and
(B) the consumer agrees to the waiver in writing; or
(2) impose or require the purchase of a loss damage waiver as a
mandatory charge.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.154. REQUIRED NOTICE IN WAIVER. A contract that offers
a loss damage waiver must include the following notice:
"This contract offers an optional loss damage waiver for an
additional charge to cover your responsibility for loss of or
damage to the merchandise. You do not have to purchase this
coverage. Before deciding whether or not to purchase this loss
damage waiver, you may consider whether your homeowners' or
casualty insurance policy affords you coverage for loss of or
damage to rental merchandise and the amount of the deductible you
would pay under your policy."
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.155. STATEMENT OF TOTAL CHARGE. A loss damage waiver
agreement must include a statement of the total charge for the
loss damage waiver.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.156. AUTHORIZED EXCLUSIONS. A loss damage waiver may
exclude:
(1) loss or damage to the merchandise that is caused by an
unexplained disappearance or abandonment of the merchandise;
(2) damage that is intentionally caused by the consumer; or
(3) damage that results from the consumer's wilful or wanton
misconduct.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.157. RELATIONSHIP TO INSURANCE. A loss damage waiver is
not insurance.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.158. RULES FOR REVIEW OF CERTAIN CONTRACTS. The
commission by rule shall provide the method for annually
submitting to the department for review any contract, including
any amendment to a contract, that contains a loss damage waiver.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.159. FEES. The commission by rule shall set a
reasonable fee to be paid by a merchant for:
(1) the review of a contract form under Section 92.158; and
(2) the administration of this chapter by the department.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.160. ADMINISTRATIVE ENFORCEMENT OF SUBCHAPTER. (a) The
department shall enforce this subchapter and, as necessary, may
investigate a merchant who has one or more contracts that include
a loss damage waiver.
(b) A person may file a complaint with the department alleging a
violation of this subchapter. The department shall investigate
the alleged violation on receipt of the complaint and may inspect
any record relevant to the complaint.
(c) If, as a result of an investigation, the department
determines that a violation may have occurred, the commission
shall provide an opportunity for a hearing in the manner provided
for a contested case under Chapter 2001, Government Code.
(d) If, after opportunity for hearing, the commission determines
that the merchant has violated this subchapter, the commission
may:
(1) impose an administrative penalty under Chapter 51,
Occupations Code; or
(2) award the complainant damages in an amount not to exceed the
amount of the contract price for the merchandise.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
SUBCHAPTER E. CIVIL ENFORCEMENT
Sec. 92.201. ACTION FOR VIOLATION OF CHAPTER. (a) A consumer
damaged by a merchant's violation of this chapter is entitled to
recover from the merchant:
(1) actual damages;
(2) an amount equal to 25 percent of the total amount of
payments required to obtain ownership of the merchandise, except
that the amount recovered under this subdivision may not be less
than $250 or more than $1,000; and
(3) reasonable attorney's fees and court costs.
(b) A merchant is not liable under this section for a violation
of this chapter caused by the merchant's error if, subject to
Subsection (c), the merchant:
(1) provides the consumer written notice of the error; and
(2) makes adjustments in the consumer's account as necessary to
ensure:
(A) the consumer will not be required to pay an amount in excess
of the amount disclosed; and
(B) the agreement otherwise complies with this chapter.
(c) A merchant must take action under Subsection (b) before:
(1) the 31st day after the date the merchant discovers the
error; and
(2) the merchant receives written notice of the error from the
consumer or an action under this section is filed.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.
Sec. 92.202. DECEPTIVE TRADE PRACTICE. A violation of this
chapter is a deceptive trade practice under Subchapter E, Chapter
17.
Added by Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.01, eff. April 1, 2009.