1.

1. (a) Upon the scheduled termination of a retail lease agreement, the holder shall not charge, receive or collect a charge for excess wear and damage to the vehicle which exceeds: (i) the actual cost of repairs, reduced by all discounts, paid by the holder; or (ii) a true itemized estimate of the cost of such repairs by an appraiser licensed pursuant to section three hundred ninety-eight-d of the vehicle and traffic law selected by the holder, of the cost of such repairs.
2. (b) Upon early termination of a retail lease agreement, the holder shall not charge, receive or collect a charge for excess wear and damage to the vehicle which exceeds the actual costs of repairs, reduced by all discounts, paid by the holder.

2. In order for a holder to impose a charge for excess wear and damage to a vehicle subject to a retail lease agreement, such agreement shall contain a clause describing the excess wear and damage to the vehicle for which the lessee may be liable. Such holder shall, not more than forty days nor less than twenty days prior to the scheduled termination date, or, not more than ten business days after the date of an early termination of a lease agreement, mail or deliver to the lessee a notice advising the lessee of the following rights and obligations of the parties, herein granted and imposed:

1. (a) Such notice shall include the following statement, as set forth herein, at the beginning of the notice in at least ten-point bold type: "YOUR LEASE AGREEMENT ALLOWS (HOLDER) TO ASSESS A CHARGE FOR EXCESS WEAR AND DAMAGE TO THE VEHICLE. YOU SHOULD OBTAIN YOUR OWN EVIDENCE OF THE CURRENT CONDITION OF THE VEHICLE NOT MORE THAN TWENTY (20) DAYS PRIOR TO THE SCHEDULED TERMINATION OF YOUR LEASE. YOU ALSO WILL HAVE THE RIGHT TO SUBMIT DISPUTES TO THE ALTERNATE ARBITRATION MECHANISM ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW YORK STATE ATTORNEY GENERAL."
2. (b) In the case of a scheduled termination, of the lessee's right to turn the vehicle in with a copy of an itemized appraisal of excess wear and damage to the vehicle prepared by an appraiser licensed under section three hundred ninety-eight-d of the vehicle and traffic law, selected by the lessee and conducted not more than twenty days prior to the scheduled termination date;
3. (c) Of the right of the holder to, within thirty days after the date on which the vehicle comes into the actual physical possession of the holder, obtain a written itemized appraisal of excessive wear and damage to the vehicle prepared by an appraiser licensed under section three hundred ninety-eight-d of the vehicle and traffic law selected by the holder;
4. (d) That if the lessee had not previously obtained and submitted to the holder a written itemized appraisal on the lessee's own behalf in accordance with paragraph (b) of this subdivision, the lessee will have the greater of ten business days after the lessee has received or fourteen business days to do so after the holder has sent, in conformance with subdivision three of this section, an itemized bill for excess wear and damage and a copy of the itemized appraisal prepared on behalf of the holder, unless the lessee does not dispute any of the items contained therein. In the case where the holder bases the charge for excess wear and damage on the actual cost of repairs, the notice shall also inform the lessee that should the lessee fail to obtain an itemized written appraisal, he or she is entitled to dispute only whether any items claimed exist and/or are excess wear and damage to the vehicle, but not the actual cost of making the repairs;
5. (e) That if the lessee disputes that any of the items claimed for excess wear and damage to the vehicle exist or are excessive in nature, the lessee may submit the dispute within sixty days of the date on which the vehicle comes into the actual physical possession of the holder to the holder's informal dispute settlement procedure, if any, or, upon the payment of the prescribed filing fee which is refundable if the arbitrator finds in the lessee's favor, to an alternative arbitration mechanism established under regulations promulgated by the attorney general of the state of New York;
6. (f) That if there exists a discrepancy between the itemized appraisals obtained by the holder and the lessee, if any, the holder shall submit the dispute within sixty days of the date on which the vehicle comes into the actual physical possession of the holder to the holder's informal dispute settlement procedure, if any, unless the lessee exercises the option granted by paragraph (b) of subdivision five of this section; provided, however, that in the event the holder has complied with the provisions of this subdivision, a lessee who has failed to obtain an itemized appraisal of the excessive wear and damage to the vehicle in accordance with either paragraph (b) or (c) of this subdivision may dispute only the existence of any item or whether the wear is excessive in nature, but may not dispute the actual cost of repairs.

3.

1. (a) Itemized bill. (i) In the event that the holder wishes to impose a charge for excess wear and damage to the vehicle, the holder shall send by registered mail or hand-deliver to the lessee a bill containing an itemized list of the estimated or actual cost of repairing or replacing each item as to which an excess wear and damage charge is claimed and specifying the address to which any response must be mailed. The bill shall be mailed or hand-delivered to the lessee within thirty days after the date on which the vehicle comes into the actual possession of the holder.
2. (ii) The itemized bill shall include the following statements printed in at least ten-point type: "You are being asked to pay an amount claimed for excess wear and damage to the vehicle. If you wish to contest this amount, you must obtain an itemized appraisal from an appraiser licensed by the New York State Department of Motor Vehicles, and mail or deliver a copy of such appraisal to (NAME AND ADDRESS OF HOLDER) within the greater of fourteen business days after (NAME OF HOLDER) has sent, or ten business days of receipt of this bill and (NAME OF HOLDER'S) itemized appraisal. If you fail to do so, you will forfeit your right to contest in arbitration any actual repair costs incurred by the (HOLDER) for excess wear and damage; however, you do not forfeit your right to contest the existence of any item or whether the wear is excessive in nature."
3. (iii) The itemized bill shall also notify lessees of their material rights and obligations for dispute resolution in arbitration.
4. (b) Itemized appraisal. (i) A holder who imposes a charge for excess wear and damage to the vehicle shall send by registered mail or hand-deliver, within thirty days after the date on which the vehicle comes into actual physical possession of the holder, a written itemized appraisal prepared by an appraiser licensed under section three hundred ninety-eight-d of the vehicle and traffic law. The appraisal shall be dated, signed by the holder or its agent, and identify by type each item of excess wear and damage.
5. (ii) The following notice shall be included at the beginning of the itemized appraisal prepared on behalf of the holder and furnished to the lessee, "ALL ITEMS OF DAMAGE FOR WHICH A CHARGE FOR EXCESSIVE WEAR OR DAMAGE WILL BE CLAIMED BY THE HOLDER MUST BE NOTED IN THIS APPRAISAL. IF YOU DISPUTE THE EXISTENCE OR NATURE OF ANY ITEM OF DAMAGE IDENTIFIED IN THIS NOTICE, YOU MAY SUBMIT THE DISPUTE TO THE ALTERNATE ARBITRATION MECHANISM ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW YORK STATE ATTORNEY GENERAL."

4.

1. (a) The itemized bill and appraisal required by subdivision three of this section may be combined into a single document. Mere acknowledgement by the lessee of receipt of an itemized bill, an appraisal, or a combination of the two shall not operate as an admission of the existence, nature or amount of any of the items therein.

2. (b)

   1. (i) The holder shall grant the lessee access to the vehicle at a reasonable time and place in order for the lessee to obtain an itemized appraisal on the lessee's own behalf. The holder shall not be required, however, to deliver the vehicle to, or produce the vehicle at, a destination designated by the lessee for such purpose.
   2. (ii) A holder may not fail to provide, either intentionally or by actions or omissions, reasonable access to the vehicle by the licensed appraiser chosen by the lessee within the period during which a lessee must obtain and submit an appraisal. If the holder fails to so provide reasonable access to the vehicle, the holder shall be deemed to have forfeited its contractual right to charge, receive or collect any charge for excessive wear and damage to the vehicle from the lessee.
3. (c) A lessor or holder of a retail lease agreement shall not report an unsatisfied claim for excess wear and damage to a credit reporting agency as a derogatory item of information until: (i) the expiration of the time granted under article seventy-five of the civil practice law and rules for the filing of a petition to vacate or modify an arbitrator's award; (ii) the issue has been a subject of a final judgment; or (iii) where the holder and the lessee execute a settlement, thirty days after the date a payment is due under the settlement if no payment has been made.

5.

1. (a) Arbitration and enforcement. If a holder has established or participates in an informal dispute settlement procedure which is consistent in all respects with the provisions of part seven hundred three of title sixteen of the code of federal regulations, any dispute, disparity or conflict between any appraisal report prepared by an appraiser licensed by the state department of motor vehicles on behalf of the holder and one prepared on behalf of the lessee shall be decided by such informal dispute settlement procedure. Holders utilizing informal dispute settlement procedures pursuant to this subdivision shall insure that the arbitrators participating in such informal dispute settlement procedures are familiar with the provisions of this section.
2. (b) Upon the payment of a prescribed filing fee, a consumer shall have the option of submitting any dispute arising under this section to an alternate arbitration mechanism established pursuant to regulations to be promulgated hereunder by the attorney general. Upon application of the consumer and payment of the filing fee, the holder shall submit to such alternate arbitration. Such alternate arbitration shall be conducted by a professional arbitrator or arbitration firm appointed by and under regulations established by the attorney general. Such alternate arbitration mechanism shall ensure the personal objectivity of its arbitrators and the right of each party to present its case, to be in attendance during any presentation made by the other party and to rebut or refute such presentation. In all other respects, such alternate arbitration mechanism shall be governed by article seventy-five of the civil practice law and rules. Holder or lessee shall have thirty days from the date of mailing of a copy of the arbitrator's decision to such holder or lessee to comply with the terms of such decision.
3. (c) In no event shall any person who has participated in an informal dispute settlement procedure be precluded from seeking the rights or remedies available to such person under applicable law.
4. (d) Nothing in this section shall be deemed to prohibit: (i) the holder and the lessee from agreeing upon termination of the agreement to the payment by the lessee, in satisfaction of his or her obligation under the provisions of the agreement, of an amount which the lessor and the lessee agree is a reasonable figure to compensate for damage to the vehicle; (ii) the holder from retaining any portion of a security deposit in satisfaction of amounts owed to the holder that are not attributable to excess wear and tear; or (iii) to restrict or otherwise regulate the assessment of charges for excess mileage.