Connecticut General Statutes 42-420 – Determining realized value
(a) Subject to subsection (b) of this section, the amount of the realized value, if used to determine the lessee’s liability on termination of a consumer lease, is the sum of:
Terms Used In Connecticut General Statutes 42-420
- Contract: A legal written agreement that becomes binding when signed.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
(1) The amount of the rebate of premiums or charges for insurance, extended warranty, or service or maintenance contract to the extent the rebates are received by the holder; and
(2) One of the following:
(A) The price received by the holder on disposition of the leased goods by sale;
(B) If the goods are re-leased, the total of periodic payments plus the residual value under the new lease, reduced to present value; or
(C) If the goods are not disposed of, the higher of: (i) The best offer for disposition of the goods; or (ii) the fair market value of the goods.
(b) A lessee and holder under a consumer lease may agree at the time of termination on the realized value of the goods, or may agree in the lease or at the time of termination on a method for determining it, and the value so agreed upon or determined, unless unreasonable, is the realized value. An agreed realized value is not unreasonable if the value is determined by an appraiser agreed to by the holder and lessee, or by reference to a generally accepted reference source for goods of the kind.
(c) If the realized value is determined under subparagraph (A) or (B) of subdivision (2) of subsection (a) of this section, the disposition may be by public or private sale or re-lease, at any time and place and on any terms. Every aspect of the disposition, including the method, manner, time, place and terms must be commercially reasonable. Disposition in a wholesale market is not unreasonable.
(d) If a disposition is to a person related to the holder, or a person obligated to the holder under an agreement for recourse, repurchase or the like, the realized value is not less than the fair market value of the goods.
(e) If a disposition is not commercially reasonable, the realized value must be established by reference to the retail market value of goods of the kind and condition at issue.