(1) A lessee who breaches any rental purchase agreement, including but not limited to the failure to make timely rental payments, has the right to reinstate the original rental purchase agreement without losing any rights or options previously acquired under the rental purchase agreement if both of the following apply:
Subsequent to having failed to make a timely rental payment, the lessee has promptlysurrendered the property to the lessor, in the manner as set forth in the rental purchase agreement, and if and when requested by lessor; and
Not more than sixty days have passed since the lessee returned the lease property;except that if the lessee has made more than sixty percent of the total number of payments required under the rental purchase agreement to acquire ownership, such sixty-day period shall be extended to a one-hundred-twenty-day period.
As a condition precedent to reinstatement of the rental purchase agreement, a lessormay collect a reinstatement fee as set forth in section 5-10-602, plus delivery charges allowable by section 5-10-601 (2) if redelivery of the item is necessary.
If reinstatement occurs pursuant to this section, the lessor shall provide the lesseewith either the same item leased by the lessee prior to reinstatement or a substitute item of equivalent quality and condition. If a substitute item is provided, the lessor shall provide the lessee with all the information required by section 5-10-401.
Source: L. 90: Entire article added, p. 373, § 1, effective January 1, 1991.
Limitations on lessor's remedies. With respect to a debt arising from a rental purchase agreement, regardless of where made, the lessor may not attach unpaid earnings of the debtor by garnishment or like proceedings prior to the entry of judgment in an action against the lessee arising from the said rental purchase agreement.
Source: L. 90: Entire article added, p. 374, § 1, effective January 1, 1991.
Assignee liability. (1) With respect to a rental purchase agreement, an assignee of the rights of the lessor is subject to all claims and defenses of the lessee against the lessor arising from the lease of property or services, notwithstanding that the assignee is the holder in due course of a negotiable instrument issued in violation of the provisions prohibiting certain negotiable instruments.
A claim or defense of a lessee specified in subsection (1) of this section may beasserted against the assignee under this section only to the extent of the amount owing and paid to the assignee and assignor.
An agreement may not limit or waive the claims or defenses of a lessee under thissection.
Source: L. 90: Entire article added, p. 374, § 1, effective January 1, 1991.