SEC. 3. DEFINITIONS

.01 A ‘‘rent-to-own dealer’’ is a person that, in the ordinary course of business, regularly enters into ‘‘rent-toown contracts’’ with customers for the use of ‘‘consumer durable property,’’ provided that a substantial portion of those contracts terminate and the property is returned to such person before

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the receipt of all payments required to transfer ownership of the property from such person to the customer.

.02 ‘‘Consumer durable property’’ is tangible personal property generally used in the home, including televisions, video cassette recorders, stereos, camcorders, appliances, furniture, washing machines and dryers, refrigerators, and other similar consumer property. Consumer durable property does not include, for example, real property, aircraft, boats, motor vehicles, or trailers.

.03 A ‘‘rent-to-own contract’’ (1) is a contract between a rent-toown dealer and a customer who is an individual;

(2) is for the use of an item or items of consumer durable property;

(3) is titled ‘‘Rent-to-Own Agreement’’ or ‘‘Lease Agreement with Ownership Option,’’ or uses other similar language;

(4) denominates the rent-to-own dealer as the ‘‘lessor’’ and the customer as the ‘‘lessee,’’ or uses other similar language;

(5) provides for a weekly or monthly payment period and a level payment rate;

(6) provides that legal title to an item of consumer durable property remains with the rent-to-own dealer until the customer makes all the weekly, or monthly, or early purchase payments required under the contract to acquire legal title to the item of property;

(7) provides a beginning date and a maximum period of time for which the contract may be in effect that does not exceed 156 weeks or 36 months from such beginning date (including renewals or options to extend);

(8) provides for level payments within the 156-week or 36-month period that, in the aggregate, generally exceed the normal retail price of the consumer durable property plus interest;

(9) provides for payments under the contract that, in the aggregate, do not exceed $10,000 per item of consumer durable property;

(10) provides that the customer does not have any legal obligation to make all the weekly or monthly level payments set forth under the contract, and that at the end of each week or month the customer may either (a) continue to use the consumer durable property by making the next weekly or monthly

payment, or (b) return such property to the rent-to-own dealer in good working order, in which case the customer does not incur any further obligations under the contract and is not entitled to a return of any payments previously made under the contract; and

(11) provides that the customer has no right to sell, sublease, mortgage, pawn, pledge, encumber, or otherwise dispose of the consumer durable property until all the payments stated in the contract have been made.