Currently, Nevada law on vehicle leasing (NRS Chapter 100) only applies to vehicle leases for business or commercial purposes. The bill would amend Chapter 100 to cover a “consumer vehicle lease” which would be defined as “a contract in the form of a bailment or lease of a single vehicle by a person for a period of more than 4 months, primarily for personal, family or household purposes, whether or not the lessee has the option to purchase or otherwise become the owner of the vehicle at the expiration of the lease.”
As amended by the bill, Chapter 100 would impose the following requirements and limitations on “consumer vehicle leases”:
- Form of lease agreement.
- All leases. Subject to an exception for electronic tracking devices, all consumer vehicle leases would have to be contained in a single document that contains the entire lease agreement, including the promissory note. All essential provisions would have to be filled in before the lessee signs the agreement and the agreement would be subject to an 8-point minimum type size requirement.
- Leases of used vehicles. Additional requirements would be imposed on consumer vehicle leases of used vehicles entered into by dealers, including (1) required notices that must be provided before the lessee signs the lease agreement and acknowledged by the lessee, (2) specified language to be included in the agreement regarding residual value, early termination, and default charges, and (3) a late fee limit equal to the lesser of $15 or 8 percent of any lease payment in default for more than 10 days. If a dealer failed to obtain the lessee’s signature on the required notices before obtaining the lessee’s signature on the lease agreement, the agreement would “be deemed a retail installment contract for the sale of the vehicle.”
- Default limitations. A default by the lessee in any consumer vehicle lease would only be enforceable if (1) the lessee is at least 30 days past due on a lease payment, or (2) the prospect of payment, performance or realization of collateral is significantly impaired. The lessor would have the burden of establishing the prospect of significant impairment.
- Civil liability. The bill would make a violation of Chapter 100 a deceptive trade practice for purposes of Nevada’s UDAP law and allow “a lessee or other person who is a debtor or secondary obligor under the consumer vehicle lease [to] bring a civil action in any court of competent jurisdiction for such violation.” It would also provide that a court “shall award” a prevailing plaintiff in such an action any damages sustained, any equitable relief the court deems appropriate, and the plaintiff’s costs and reasonable attorney’s fees.