101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5177

 

Introduced , by Rep. Daniel Didech

 

SYNOPSIS AS INTRODUCED:
 
815 ILCS 636/25
815 ILCS 636/45

    Amends the Motor Vehicle Leasing Act. Provides that a lessee is not liable for charges for the early termination of a lease agreement if the lessee has died before the end of the lease.


LRB101 18451 JLS 67899 b

 

 

A BILL FOR

 

HB5177LRB101 18451 JLS 67899 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Motor Vehicle Leasing Act is amended by
5changing Sections 25 and 45 as follows:
 
6    (815 ILCS 636/25)
7    Sec. 25. Requirements for a consumer lease.
8    (a) A consumer lease shall be in writing and signed by the
9lessor and the lessee.
10    (b) The printed portion of the consumer lease, other than
11directions for completion of the consumer lease, shall be
12printed in a size equal to at least eight-point type. The
13consumer lease shall contain the following items printed or
14written in a conspicuous manner:
15        (1) At the top of the consumer lease, in at least
16    10-point bold capitalized type, the words "MOTOR VEHICLE
17    LEASE AGREEMENT".
18        (2) If physical damage or liability insurance coverage
19    for bodily injury and property damage caused to others is
20    not included in the consumer lease, a notice in at least
21    10-point bold capitalized type, substantially similar to
22    the following: "NO PHYSICAL DAMAGE OR LIABILITY INSURANCE
23    COVERAGE FOR BODILY INJURY OR PROPERTY DAMAGE CAUSED TO

 

 

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1    OTHERS IS INCLUDED IN THIS LEASE."
2        (3) Directly above the acknowledgement permitted by
3    subsection (c) of this Section to appear above the space
4    reserved for the lessee's signature, a written notice
5    substantially similar to the following:
6            "NOTICE TO THE LESSEE: This is a lease. You have no
7        ownership rights in the vehicle unless and until you
8        exercise your option to purchase the vehicle, if this
9        lease contains a purchase option. Do not sign this
10        lease before you read it. Early termination may require
11        you to pay a substantial amount. You are entitled to a
12        completed copy of this lease when you sign it."
13        (4) If the lease contains a provision imposing a fee or
14    penalty for early termination of the lease, a notice in at
15    least 10-point bold capitalized type stating: "THE LESSEE
16    IS NOT LIABLE FOR AN EARLY TERMINATION FEE IF THE LESSEE
17    HAS DIED BEFORE THE END OF THE LEASE.".
18    (c) The lessor shall deliver to the lessee a completed copy
19of the consumer lease signed by the lessor. Any acknowledgement
20by the lessee of delivery of a copy of the consumer lease shall
21be conspicuous and shall appear directly above the space
22reserved for the lessee's signature.
23    (d) The consumer lease shall contain the names of the
24lessor and the lessee, the place of business of the lessor, the
25residence or place of business of the lessee as specified by
26the lessee, and a description of the vehicle, including its

 

 

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1make, model year, model, and, if known, the vehicle's
2identification number or marks.
3    (e) The consumer lease shall contain the following:
4        (1) All items required to be disclosed by the Consumer
5    Leasing Act and, in addition, the following items if the
6    items or substantially similar items are not required to be
7    disclosed by the Consumer Leasing Act.
8        (2) The capitalized cost, identified as "capitalized
9    cost", and a descriptive explanation such as "the agreed
10    upon amount determined at lease inception for all items and
11    services included in the lease".
12        (3) Any capitalized cost reduction, using the term
13    "capitalized cost reduction".
14        (4) The adjusted capitalized cost, using the term
15    "adjusted capitalized cost" and a descriptive explanation,
16    as applicable, such as "the agreed upon amount which serves
17    as the basis for determining the base lease payment. If you
18    are not in default, this amount plus any applicable early
19    termination charges determines your maximum early
20    termination obligation".
21        (5) If the lessee is not permitted to terminate the
22    lease at any time, the consumer lease shall contain a
23    conspicuous statement setting forth any prohibitions upon
24    the lessee's ability to terminate the consumer lease at any
25    time before the end of the scheduled term.
26        (6) The vehicle's residual value, using the term

 

 

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1    "residual value".
2    (f) (1) (A) Any insurance for which a charge is included in
3        the consumer lease shall be issued by an insurance
4        company authorized to do that kind of insurance
5        business in this State.
6            (B) The lessee shall have the privilege of
7        purchasing the insurance from an agent or broker of the
8        lessee's own selection and of selecting an insurance
9        company acceptable to the lessor provided, however,
10        that the inclusion of the insurance premium in the
11        consumer lease when the lessee selects the agent,
12        broker, or company shall be optional with the lessor
13        and in such case the lessor or assignee shall have no
14        obligation to send or cause to be sent to the lessee a
15        copy of the insurance policy.
16        (2) If the policy of liability insurance or other
17    insurance on the vehicle is canceled, any unearned
18    insurance premium refund received by the holder shall be
19    either (i) refunded to the lessee or (ii) credited,
20    together with the unearned portion of the lease charge
21    applicable thereto, to the lessee's obligations,
22    including, without limitation, to the final maturing lease
23    payments or, at the holder's option, to the obligations of
24    the lessee upon early or scheduled termination except to
25    the extent applied toward payment for similar insurance
26    protecting the interests of the lessee and the holder or

 

 

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1    either of them, provided that no such credit or refund need
2    be made if the amount thereof would be less than one
3    dollar.
4        (3) The amount, if any, included as a charge for group
5    credit insurance, liability insurance, or other insurance
6    on the vehicle shall not exceed the premiums permitted by
7    law for the insurance. If the group credit or other
8    insurance is canceled, the refund for unearned insurance
9    premiums received by the holder shall be either (i)
10    refunded to the lessee or (ii) credited, together with the
11    unearned portion of the lease charge applicable thereto,
12    either to the lessee's obligations, including, without
13    limitation, to the final maturing lease payments or, at the
14    holder's option, to the obligations of the lessee upon
15    early or scheduled termination, provided that no such
16    credit or refund need be made if the amount thereof would
17    be less than one dollar.
18    (g) If the lessee is obligated under the consumer lease to
19maintain insurance on the vehicle and if subsequent to the
20execution of the consumer lease the lessee fails to maintain
21the required insurance, the holder, at its option, may buy
22insurance insuring substantially the same risks for either the
23interest of the lessee and the holder or the interest of either
24of them. Any amount paid by the holder for insurance may be the
25subject of a lease charge from the date the amount was paid by
26the holder, as though the amount was part of the capitalized

 

 

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1cost, shall be subject to the default provisions of the
2consumer lease and shall be repayable by the lessee to the
3lessor as provided in the consumer lease. Nothing in this
4subsection shall prevent the holder from pursuing any other
5remedy for default set forth in the consumer lease or provided
6by law.
7    (h) (1) The holder may, if the consumer lease so provides,
8collect a late charge on each lease payment in default for a
9period of 10 days in the amount or amounts agreed to in the
10consumer lease.
11        (2) The holder may not assess or collect a late charge
12    under paragraph (1) of this subsection when the only
13    delinquency is late charges assessed on an earlier lease
14    payment or payments.
15        (3) The consumer lease may provide that in the event of
16    default by the lessee, the lessee shall pay collection
17    costs, court costs, and, where the consumer lease is
18    referred to an attorney not a salaried employee of the
19    holder for collection, reasonable attorneys' fees.
20    (i) No consumer lease shall be signed by any party thereto
21when it contains blank spaces to be filled in after it has been
22signed except that, if delivery of the vehicle is not made at
23the time of the execution of the consumer lease, the vehicle's
24identifying numbers or marks or similar information and the due
25date of the first payment may be inserted in the consumer lease
26after its execution. The lessee's written acknowledgement,

 

 

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1conforming to the requirements of subsection (c) of this
2Section, of delivery of a copy of the consumer lease shall be
3conclusive proof of the delivery of a copy of the consumer
4lease and of compliance with this subsection in any action or
5proceeding by or against the holder, lessor, or an assignee of
6the consumer lease without knowledge to the contrary at the
7time of the assignment.
8    (j) Notwithstanding any contrary provision of this Act or
9other laws of this State, (a) a holder may purchase, sell, or
10otherwise acquire or transfer an interest in a consumer lease
11or a vehicle subject to a consumer lease, on such terms and
12conditions and for such price as may be mutually agreed upon,
13and (b) no filing of the sale or transfer, no notice to the
14lessee of the sale or transfer, and no requirement that the
15holder be deprived of dominion over payments due under the
16consumer lease or over the vehicle if repossessed by or
17returned to the holder shall be necessary to the validity of a
18written sale or transfer of a consumer lease as against
19creditors, subsequent purchasers, pledgees, mortgagees, or
20encumbrancers of the holder.
21    (k) Unless the lessee has notice of actual or intended sale
22or transfer of a consumer lease, payment thereunder made by the
23lessee to the last known holder of the consumer lease shall be
24binding upon all subsequent holders or assignees. A person who
25sells or transfers a lease and thereafter receives payment from
26the lessee shall forward the payment in the form in which it

 

 

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1was received to the person to whom the lease had been sold or
2transferred, unless the person to whom the lease has been sold
3or transferred agrees in writing that the person who sells or
4transfers the lease may retain the payment.
5    (l) (1) Upon written request from the lessee, the holder
6shall give or forward to the lessee a written statement of the
7dates and amounts of the periodic lease payments that have been
8received by the holder under the consumer lease and the total
9amount of the remaining periodic lease payments. Any amounts in
10the statement that are estimated shall be identified as
11estimated. A lessee shall be given a written receipt for any
12payment made in cash.
13        (2) Upon written request from a lessee who is then
14    entitled to terminate the consumer lease early, the holder
15    shall give or forward to the lessee a written statement of
16    the lessee's projected early termination obligation under
17    the consumer lease without consideration on the value of
18    the vehicle.
19        (3) No charge shall be imposed on the lessee for
20    preparation by the holder of the lease of a single
21    statement under paragraph (1) or (2) in a 12-month period.
22    A holder may impose a reasonable fee, not to exceed $20 per
23    statement, for the preparation of additional early
24    termination statements in a 12-month period, provided that
25    the charge has been disclosed to the lessee either orally
26    or in writing.

 

 

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1    (m) No consumer lease shall contain any of the following
2provisions:
3        (1) In the absence of the lessee's default, the holder
4    may, arbitrarily and without reasonable cause, accelerate
5    the maturity of any part or all of the amount owing
6    thereon.
7        (2) A power of attorney is given to confess judgment or
8    an assignment of wages is given.
9        (3) The lessee waives any right of action against the
10    holder for any illegal act committed in the collection of
11    payments under the consumer lease or in the repossession of
12    the vehicle.
13        (4) The lessee executes a power of attorney appointing
14    the holder or other person acting on behalf of the holder
15    as the lessee's agent in collection of payments under the
16    consumer lease or in the repossession of the vehicle,
17    provided, however, that this paragraph shall not prohibit
18    the inclusion in a consumer lease of a limited power of
19    attorney or other provision authorizing the holder to
20    execute in the lessee's name any proofs of insurance claims
21    or losses, titling and registration documents, odometer
22    statements, or for any other purpose properly associated
23    with the lease transaction or to endorse the lessee's name
24    on any insurance settlement or premium, rebate draft,
25    refund, or check.
26        (5) The holder is relieved from liability for any legal

 

 

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1    remedy which the lessee may have had against the holder
2    under the consumer lease, or any separate instrument
3    executed in connection therewith.
4        (6) The lessee waives any provision of this Act.
5    (n) Any provision prohibited by this Act shall be
6unenforceable but shall not otherwise affect the validity of a
7consumer lease.
8(Source: P.A. 89-625, eff. 1-1-97.)
 
9    (815 ILCS 636/45)
10    Sec. 45. Restriction on early termination liability.
11    (a) The lessee shall have the right to terminate the
12consumer lease at any time after the lessee has made 12 full
13periodic lease payments for which lease charges have been
14accrued by the holder or, in the case of a single payment
15lease, at the expiration of 12 months from the consummation of
16the lease. Nothing in this Section shall be deemed to prohibit
17the holder from permitting the lessee to terminate the consumer
18lease before the expiration of 12 months. A lessee may not be
19held liable for early termination fees if the lessee has died
20before the end of the lease.
21    (b) If a consumer lease is terminated early and there is no
22purchase option or the lessee does not exercise a purchase
23option, the lessee's early termination obligation may not
24exceed an amount equal to the sum of the following:
25        (1) Any unpaid lease payments that accrued through the

 

 

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1    date of early termination.
2        (2) Any other unpaid amounts, other than excess mileage
3    charges, arising under the terms of the lease.
4        (3) Any official fees and taxes imposed in connection
5    with lease termination.
6        (4) A disposition fee in an amount set forth in the
7    consumer lease.
8        (5) The reasonable costs of retaking, storing,
9    preparing for sale, and selling the vehicle, including
10    reasonable attorneys' fees and collection and court costs
11    incurred by the lessor in recovering or securing possession
12    of the vehicle.
13        (6) The amount, if any, by which (i) the balance
14    subject to lease charge plus the lease charge earned in
15    advance for the computational period in which the early
16    termination occurs, calculated in accordance with the
17    constant yield method or any other generally accepted lease
18    accounting method exceeds (ii) the realized value of the
19    vehicle.
20        (7) Any other early termination charge expressly
21    disclosed in the consumer lease.
22    (c) As an alternative to the constant yield and other
23generally accepted lease accounting methods of determining the
24depreciation amounts accrued through the date of early
25termination of a precomputed lease transaction, those amounts
26may be determined under paragraph (6) of subsection (b) of this

 

 

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1Section by using a lease provision under which the lease charge
2is calculated on the adjusted capitalized cost for the time
3outstanding according to a generally accepted actuarial
4method.
5    (d) This Section does not limit or restrict the manner of
6calculating the lessee's early termination obligation, whether
7by way of unamortized capitalized cost, discounted present
8value of remaining lease payments, multiples of monthly
9payments, or otherwise.
10    (e) Any refundable security deposit or advance lease
11payment held by the holder may be retained by the holder or
12lessor and shall be credited against the lessee's early
13termination obligation. The amount of the security deposit or
14advance lease payment in excess of the amount of the lessee's
15early termination obligation shall be returned to the lessee.
16The holder or lessor is not obligated to pay interest to the
17lessee on the security deposit.
18(Source: P.A. 89-625, eff. 1-1-97.)