The Consumer Leasing Act (CLA) requires the seller of goods to disclose certain information. The CLA applies to leases extending beyond four months. This information can help you compare different leasing opportunities and whether leasing or buying is best for you. The required information includes:
- Number of monthly payments
- Penalties for default
- Amount of initial payment
- Total amount for fees
- Other disclosures
What Are Common Violations of the CLA?
Violations of the CLA may include:
- Unreasonable early termination formula – If you wish to terminate the lease before the termination date, the amount due to the lessor is determined by the early termination formula set down in the lease. If the lessor unreasonably charges or penalizes you, this may be a violation of the CLA.
- Failure to follow the early termination formula – In some jurisdictions, a failure to apply the early termination formula as set forth in the lease may violate the CLA.
- Disclosure of warranties – All warranties available on vehicles must be stated in the lease.
- Failure to disclose the trade-in or down payment – If the lessor fails to state the trade-in or down payment of the lease, the CLA may have been violated.
- Disclosure of interest on security deposits – In certain jurisdictions, it may be required to disclose whether interest on a security deposit will be paid and to whom. If it is not disclosed, the lessor may be violating the CLA.
What Is Not Covered under the CLA?
Although the CLA covers personal property leased for more than 4 months, it does not cover:
- Apartment or house leases
- Daily or month-to-month car rentals
- Property leased to companies for business use
What Can I Do if the Lessor Failed to Provide Me the Required Information?
If the lessor fails to provide the required information, you may sue the company. You may ask for 25% of the total of the monthly payments (and not less than $100 or more than $1000) in addition to any actual damages. If you are successful, you may also be awarded court costs and attorney’s fees. Furthermore, the lessor may possibly face criminal penalties.
Do I Need a Lawyer Experienced with Leasing Issues?
A consumer lawyer would be able to discuss with you your various options and your legal rights under the CLA. If you face a company or lessor who fails to disclose required information, a lawyer would be able to help you with your claim.