BILL NUMBER: SB 338 CHAPTERED
BILL TEXT
CHAPTER 112
FILED WITH SECRETARY OF STATE JULY 28, 1997
APPROVED BY GOVERNOR JULY 27, 1997
PASSED THE SENATE JULY 11, 1997
PASSED THE ASSEMBLY JUNE 30, 1997
AMENDED IN ASSEMBLY MAY 28, 1997
INTRODUCED BY Senator Karnette
FEBRUARY 12, 1997
An act to amend Sections 1812.54 and 1812.623 of the Civil Code,
relating to contracts.
LEGISLATIVE COUNSEL'S DIGEST
SB 338, Karnette. Contracts: rental purchase; dance studio.
Existing law regulates the terms and conditions of contracts for
dance studio lessons and other services. Existing law requires these
contracts to contain a statement that the studio is bonded and that
information concerning the bond may be obtained from the Secretary of
State at a specified address.
This bill would revise the address to which the inquiry concerning
bond information should be directed.
Existing law, the Karnette Rental-Purchase Act, regulates the
contents of rental-purchase agreements, as defined. Existing law
requires these agreements to make specified disclosures on the
agreement in a prescribed manner.
This bill would make a clarifying change to conform to other
notice requirements required by the act.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1812.54 of the Civil Code is amended to read:
1812.54. (a) Every contract for dance studio lessons and other
services shall provide that performance of the agreed-upon lessons
will begin within 12 months from the date the contract is entered
into.
(b) Every contract for dance studio lessons and other services
shall further provide all of the following:
(1) That the contract may be canceled within 180 days after the
date of receipt by the customer of a copy of the contract by written
notice to the other party at the address specified in the contract,
and all moneys paid pursuant to the contract shall be refunded within
10 days of receipt of the notice of cancellation, except that
payment shall be made for any dance studio lessons and other services
received prior to the cancellation.
(2) That the contract may be canceled after 180 days after the
date of receipt by the customer of a copy of the contract by written
notice to the other party at the address specified in the contract,
and the student canceling the contract shall be thereafter entitled
to a refund, within 10 days of receipt by the dance studio of notice
of cancellation, of all moneys paid pursuant to the canceled contract
with the exception that the dance studio shall be entitled to 10
percent of the unpaid balance pursuant to the terms of the canceled
contract, and except further that, in addition to the foregoing,
payment shall be made for any dance studio lessons and other services
received prior to the cancellation.
(c) Every contract for dance studio lessons and other services
shall contain a written statement of the hourly rate charged for each
type of lesson for which the student has contracted. If the
contract includes dance studio lessons which are sold at different
per-hour rates, the contract shall contain separate hourly rates for
each different type of lesson sold. All other services for which the
student has contracted which are not capable of a per-hour charge
shall be set forth in writing in specific terms. The statement shall
be contained in the dance studio contract before the contract is
signed by the buyer.
(d) Every dance studio subject to Sections 1812.64 to 1812.66,
inclusive, shall include in every contract for dance studio lessons
or other services a statement that the studio is bonded and that
information concerning the bond may be obtained by writing to the
office of the Secretary of State, 1500 11th Street, Sacramento,
California 95814. If the studio has elected to make a cash deposit
in lieu of procuring a bond, the contract shall contain a description
of the cash deposit.
SEC. 2. Section 1812.623 of the Civil Code is amended to read:
1812.623. (a) Every rental-purchase agreement shall be contained
in a single document which shall set forth all of the agreements of
the lessor and the consumer with respect to the rights and
obligations of each party. Every rental-purchase agreement shall be
written in at least 10-point type in the same language as principally
used in any oral sales presentation or negotiations leading to the
execution of the agreement, and shall clearly and conspicuously
disclose all of the following:
(1) The names of the lessor and the consumer, the lessor's
business address and telephone number, the consumer's address, the
date on which the agreement is executed, and a description of the
property sufficient to identify it.
(2) Whether the property subject to the rental-purchase agreement
is new or used. If the property is new, the lessor shall disclose
the model year or, if the model year is not known by the lessor, the
date of the lessor's acquisition of the property. If the property is
used, the age or the model year shall be disclosed if known by the
lessor.
(3) The minimum period for which the consumer is obligated under
the rental-purchase agreement; the duration of the rental-purchase
agreement if all regularly scheduled periodic payments are made,
designated as the "rental period"; and the amount of each periodic
payment.
(4) The total number and the total amount of periodic payments
necessary to acquire ownership of the property if the renter makes
all regularly scheduled periodic payments.
(5) The cash price of the property subject to the rental purchase
agreement.
(6) The cost of rental.
(7) The amount and purpose of any other payment or fee permitted
by this title in addition to those specified pursuant to paragraphs
(3) and (4), including any late payment fee.
(8) A statement that the total number and dollar amount of
payments necessary to acquire ownership of the rental property
disclosed under paragraph (4) does not include other fees permitted
by this title, such as late payment fees, and that the consumer
should read the rental-purchase agreement for an explanation of any
applicable additional fees.
(9) Whether the consumer is liable for loss or damage to the
rental property and, if so, the maximum amount for which the consumer
may be liable as provided in subdivision (a) of Section 1812.627.
(10) The following notice:
NOTICE
You are renting this property. You will not own it until you make
all of the regularly scheduled payments or you use the early
purchase option.
You do not have the right to keep the property if you do not make
required payments or do not use the early purchase option. If you
miss a payment, the lessor can repossess the property, but, you may
have the right to the return of the same or similar property.
See the contract for an explanation of your rights.
(11) A description of the consumer's right to acquire ownership of
the property before the end of the rental period as provided in
subdivision (a) of Section 1812.632.
(12) A description of the consumer's reinstatement rights as
provided in Section 1812.631.
(13) If warranty coverage is transferable to a consumer who
acquires ownership of the property, a statement that the unexpired
portion of all warranties provided by the manufacturer, distributor,
or seller of the property that is the subject of the rental-purchase
agreement will be transferred by the lessor to the consumer at the
time the consumer acquires ownership of the property from the lessor.
(14) A description of the lessor's obligation to maintain the
rental property and to repair or replace rental property that is not
operating properly, as provided in Section 1812.633.
(b) (1) The disclosures required by paragraphs (3), (4), (5), and
(6) of subdivision (a) shall be printed in at least 10-point boldface
type or capital letters if typed and shall be grouped together in a
box formed by a heavy line in the following form:
____________________________________________________________________
' ' ' '
' TOTAL OF ' COST OF RENTAL ' CASH PRICE
'
' PAYMENTS ' '
'
' ' ' '
' $ ' $ ' $
'
' ' ' '
' ' Amount over cash ' Property available at this
'
' ' price you will pay if ' price for cash from
'
' ' you make all regular ' retailers in this area.
'
' ' payments. ' '
' '-----------------------'-----------------------------'
' You must ' AMOUNT OF ' NUMBER ' RENTAL
'
' pay this ' EACH PAYMENT ' OF ' PERIOD
'
' amount to ' ' PAYMENTS ' '
' own the ' ' ' '
' property if ' ' ' '
' you make all ' ' ' '
' the regular ' ' ' '
' payments. ' ' ' '
' ' ' '
'
' You can buy ' $ per ' '
'
' the property ' ' ' '
' for less ' ' ' '
' under the ' ___________________ ' '
'
' early ' (insert period) ' '
'
' purchase ' ' ' '
' option. ' ' ' '
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(2) The box described in paragraph (1) shall appear immediately
above the space reserved for the buyer's signature.
(c) The disclosures required by paragraphs (3), (4), (5), and (6)
of subdivision (a) shall be grouped together in a box formed by a
heavy line in the form prescribed in subdivision (b) and shall be
clearly and conspicuously placed on a tag or sticker affixed to the
property available for rental-purchase. If the property available
for rental-purchase is not displayed at the lessor's place of
business but appears in a photograph or catalog shown to consumers, a
tag or sticker shall be affixed to the photograph of the property or
catalog shown to consumers or shall be given to consumers. The
disclosure required by paragraph (2) of subdivision (a) also shall be
clearly and conspicuously placed on the tag or sticker.
(d) All disclosures required by this section shall be printed or
typed in a color or shade that clearly contrasts with the background.