South Carolina General Assembly
109th Session, 1991-1992

Bill 693

                    Current Status

Introducing Body:               Senate
Bill Number:                    693
Ratification Number:            201
Act Number:                     132
Primary Sponsor:                Lourie
Type of Legislation:            GB
Subject:                        Motor vehicle, subleasing and loan
                                assumption of
Date Bill Passed both Bodies:   May 27, 1991
Computer Document Number:       436/11151.DW
Governor's Action:              S
Date of Governor's Action:      Jun 12, 1991
Introduced Date:                Feb 20, 1991
Date of Last Amendment:         May 22, 1991
Last History Body:              ------
Last History Date:              Jun 12, 1991
Last History Type:              Act No. 132
Scope of Legislation:           Statewide
All Sponsors:                   Lourie
Type of Legislation:            General Bill


 Bill  Body    Date          Action Description              CMN
 ----  ------  ------------  ------------------------------  ---
 693   ------  Jun 12, 1991  Act No. 132
 693   ------  Jun 12, 1991  Signed by Governor
 693   ------  Jun 06, 1991  Ratified R 201
 693   Senate  May 27, 1991  Concurred in House amendment,
                             enrolled for ratification
 693   House   May 23, 1991  Read third time, returned
                             with amendment
 693   House   May 22, 1991  Amended, read second time
 693   House   May 15, 1991  Committee Report: Favorable     26
                             with amendment
 693   House   Apr 17, 1991  Introduced, read first time,    26
                             referred to Committee
 693   Senate  Apr 16, 1991  Read third time, sent to House
 693   Senate  Apr 10, 1991  Amended, read second time
 693   Senate  Apr 09, 1991  Committee Report: Favorable     15
                             with amendment
 693   Senate  Feb 20, 1991  Introduced, read first time,    15
                             referred to Committee

View additional legislative information at the LPITS web site.

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A132, R201, S693)


Be it enacted by the General Assembly of the State of South Carolina:

Regulation of subleasing and loan assumption

SECTION 1. Title 37 of the 1976 Code is amended by adding:


Regulation of the Subleasing and Loan Assumption

of Motor Vehicles

Section 37-13-10. As used in this chapter:

(1) `Buyer' means a purchaser of a motor vehicle under the terms of a retail installment contract. It includes a co-buyer on the retail installment contract.

(2) `Lease' means an agreement between a lessor and lessee where the lessee obtains the possession and use of a motor vehicle for the period of time, for the purposes, and for the consideration set forth in the agreement whether or not the agreement includes an option to purchase the motor vehicle. However, `lease' does not include a residential rental agreement of a manufactured home subject to Chapter 40 of Title 27.

(3) `Lessor' means a person who in the regular course of business or as a part of regular business activity leases motor vehicles under motor vehicle lease agreements or purchases motor vehicle lease agreements or a sales finance company that purchases motor vehicle lease agreements.

(4) `Lessee' means a person who obtains possession and use of a motor vehicle through a motor vehicle lease agreement.

(5) `Person' means an individual, a partnership, a corporation, an association, or other group however organized.

(6) `Security interest' means an interest in personal property that secures performance of an obligation.

(7) `Secured party' means a lender, a seller, or other person in whose favor there is a security interest including a person to whom accounts or retail installment sales contracts have been sold.

(8) `Sublease' means an agreement whether written or oral to transfer:

(a) to a third party possession of a motor vehicle which is and, while in that third party's possession, remains the subject of a security interest which secures performance of a retail installment contract or consumer loan;

(b) or assign to a third party any of the buyer's rights, interests, or obligations under the retail installment contract or consumer loan;

(c) to a third party possession of a motor vehicle which is and, while in the third party's possession, remains the subject of a motor vehicle lease agreement; or

(d) or assign to a third party any of the lessee's or buyer's rights, interests, or obligations under the motor vehicle lease agreement.

(9) `Sublease arranger' means a person who engages in the business of inducing by any means buyers and lessees to enter into subleases as sublessors and inducing third parties to enter into subleases or sublessees, however these contracts are called.

(10) `Third party' means a person other than the buyer or the lessee of the vehicle.

(11) `Transfer' means to transfer possession of a motor vehicle by sale, loan assumption, lease, sublease, or lease assignment.

Section 37-13-20. A sublease arranger commits an offense if the sublease arranger arranges a sublease of a motor vehicle and:

(1) first does not obtain written authorization for the sublease from the vehicle's secured party or lessor;

(2) accepts a fee without first having obtained written authorization for the sublease from the vehicle's secured party or lessor;

(3) accepts a fee in excess of the amount allowed by regulations promulgated pursuant to this chapter;

(4) does not disclose the location of the vehicle on the request of the vehicle's buyer, lessee, secured party, or lessor;

(5) does not provide to the third party new, accurate disclosures under the Consumer Protection Act, 15 U.S.C. Section 1601, et seq.; (6) does not provide oral and written notice to the buyer or lessee that he is not released from liability;

(7) does not ensure that all rights under warranties and service contracts regarding the motor vehicle transfer to the third party unless a pro rata rebate for unexpired coverage is applied to reduce the third party's cost under the sublease;

(8) does not take reasonable steps to ensure that the third party is financially able to assume the payment obligations of the buyer or lessee according to the terms of the lease agreement, retail installment contract, or consumer loan; or

(9) violates a regulation promulgated by the South Carolina Department of Consumer Affairs pursuant to this chapter.

Section 37-13-30. It is not a defense to prosecution under Section 37-13-20 that the motor vehicle's buyer or lessee, secured party, or lessor has violated a contract creating a security interest or lease in the motor vehicle, nor may a sublease arranger shift to the lessee, buyer, or third party the arranger's duty under Section 37-13-20(1) or (2) to obtain prior written authorization for formation of sublease.

Section 37-13-40. A buyer, lessee, sublessee, secured party, or lessor injured or damaged by an act in violation of this chapter or regulations promulgated pursuant to it, whether or not there is a conviction for the violation, may file a civil action to recover damages based on the violation with the following available remedies:

(1) three times the amount of actual damages or fifteen hundred dollars, whichever is greater;

(2) equitable relief, including a temporary restraining order, a preliminary or permanent injunction, or restitution of money or property;

(3) reasonable attorney fees and costs and other relief the court considers just.

Section 37-13-50. A person violating this chapter or regulations promulgated pursuant to it is guilty of a misdemeanor and, upon conviction, must be fined not more than five thousand dollars or imprisoned not more than five years, or both.

Section 37-13-60. The Department of Consumer Affairs may promulgate regulations governing:

(1) the conduct of the business of sublease arranging;

(2) licensing requirements of sublease arrangers;

(3) forms for use by sublease arrangers;

(4) maximum fees and charges which may be charged by sublease arrangers;

(5) performance bond or other guaranty requirements from sublease arrangers;

(6) notification requirements to interested parties notifying them of a sublease under this chapter.

Section 37-13-70. Consistent with this chapter, the Department of Consumer Affairs may use all powers in Chapter 6 of this title to educate the public and enforce this chapter subject to the duties imposed on the department in Chapter 6.

Section 37-13-80. If the Department of Consumer Affairs promulgates regulations on licensing requirements under this chapter, it may require payment of a licensing fee from each applicant for each location not to exceed two hundred fifty dollars a year.

Section 37-13-90. The rights and remedies in this chapter are in addition to other rights and remedies provided by law."

Time effective

SECTION 2. This act takes effect upon approval by the Governor.

Approved the 12th day of June, 1991.