N.Y. Personal Property Law 340 – Establishment of realized value at lease termination when purchase option not exercised; notice of intention to sell motor vehicle
§ 340. Establishment of realized value at lease termination when purchase option not exercised; notice of intention to sell motor vehicle. 1. If an agreement is terminated early and there is no option to purchase the vehicle or the lessee does not exercise any option he or she may have to purchase the vehicle, or if the lessee's liability at the scheduled end of the lease term is based upon the estimated residual value of the vehicle and the lessee does not exercise any option he or she may have to purchase the vehicle, the holder shall act in a commercially reasonable manner when disposing of the vehicle or obtaining cash bids for the purpose of establishing the realized value of the vehicle, which may be its value in the customary wholesale market. A lessee whose agreement is terminated early without the exercise of a purchase option or whose liability at the scheduled end of the lease term is based upon the estimated residual value of the vehicle may obtain, at his or her expense, a professional appraisal by an independent third party agreed to by the lessee and the holder of the wholesale value which could be realized at sale of the leased vehicle. If a professional appraisal is obtained by such a lessee, the appraised value shall be final and binding upon the parties and shall be used as the realized value in determining the liability of the lessee at early termination or at the scheduled end of the lease term.
Terms Used In N.Y. Personal Property Law 340
- Appraisal: A determination of property value.
- 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
2. If an agreement is terminated early and there is no option to purchase the vehicle or the lessee does not exercise any option he or she may have to purchase the vehicle, or if the lessee's liability at the scheduled end of the lease term is based upon the estimated residual value of the vehicle and the lessee does not exercise any option he or she may have to purchase the vehicle, the holder shall give the lessee at least ten days written notice of its intention to sell the motor vehicle. A notice of intention to sell the vehicle need not be given if the holder and lessee have agreed in writing to the amount of the lessee's liability under the retail lease agreement after the lessee returns the vehicle to the holder or the lessee has fully satisfied his or her obligations under the agreement. A holder gives notice to the lessee under this subdivision when he or she delivers the notice to the lessee or mails the notice to him or her at his or her last known address.
3. The notice of intention to sell the vehicle shall set forth separately any charges or sums due under the agreement and shall clearly and conspicuously state that the lessee will be liable for the difference between the estimated residual value of the vehicle and its realized value, if such liability exists. The notice also shall state that the lessee has the right to submit a cash bid for the purchase of the vehicle.