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It is a written agreement which provides for the lease or use of personal property by a lessee; had an initial period of four (4) months or less, whether or not there is any additional obligation; is automatically renewable with each rental payment; and permits the lessee to become the owner of the property. Property is not real property or intangible personal property under the Indiana law. At any time after the first rental payment is made, the lessee may acquire ownership of the property under the terms specified in the rental purchase agreement. A rental purchase agreement may not contain a provision that conflicts with the rights and duties imposed under the Rental Purchase Agreement Act. The Rental Purchase Agreement Act does not apply to rental purchase agreements involving motor vehicles (as defined in IC 9-1-1-2).
Person/s soliciting, engaging, or taking assignments of Rental Purchase Agreements for a personal, family, or household purpose under the Indiana Rental Purchase Agreement Act. Each operating location (branch) in Indiana where rental purchase agreements are made must be listed on registration form. Attach a separate sheet if necessary. Each legal entity involved in rental purchase activities must complete a separate registration.
Registration must be made within thirty (30) days after soliciting or engaging in rental purchase agreements.
There is presently an initial registration fee of $600.
A registrant will annually receive a Notification Return Form 2 to be filed with an annual renewal fee determined by the Department. The annual fee is due on or before February 1 of each year. The Department may impose a fee of five dollars $5 for each day a lessor is late in paying a fee.
If the Department examines the books and records of the lessor and requires more than three (3) days per location to conduct the examination, the lessor shall pay to the department a fee fixed by the department for each day or part of a day after the third day of the examination.
The Indiana Rental Purchase Agreement Act, IC 24-7 requires all registered lessors with the Department of Financial Institutions to file an Annual Notification Return - RPAA Form 2 before February 1 in each subsequent year that the lessor solicits or enters into Rental Purchase Agreements subject to the Rental Purchase Agreement Act.
Department of Financial Institutions
30 South Meridian Street, Suite 300
Indianapolis, IN 46294
Telephone: (317) 232-3955
Toll Free in Indiana 1-800-382-4880
Fax: (317) 232 7655
Indiana Rental Purchase Agreement Act
Contains the requirements for Rent-to-Own businesses.
"Lessee" means an individuals who rents property under a rental purchase agreement.
"Lessor" means an individual or other person who, in the ordinary course of business leases; offers to lease; arranges for the leasing of; or accepts assignments of leases of property under a rental purchase agreement.
"Property" means any property that is not real property or intangible personal property under Indiana law and is made available under a rental purchase agreement. Rental purchase agreements involving motor vehicles as defined in IC 9-13-2-105(a) are prohibited under the Rental Purchase Agreement Act.
"Rental purchase agreement" means an agreement between a lessor and a lessee that: provides for the use of personal property by an individual primarily for personal, family, or household purposes;
The lessor shall reduce a rental purchase agreement to writing. The terms of the rental purchase agreement shall be set forth in not less than 8 point type.
The lessor shall disclose all information required in section 3 of the act before the rental purchase agreement is consummated. The disclosures shall be stated clearly and conspicuously and in words and phrases that have a nontechnical meaning. Disclosures may be included in the rental purchase agreement or in a separate writing that references the rental purchase agreement. Additional information or explanation supplied by the lessor may not have the effect of circumventing, evading, or unduly complicating the information required to be disclosed.
Before any rental payment is due under the rental purchase agreement, the lessor shall obtain the signature of the lessee on the writing containing the terms of the rental purchase agreement and shall furnish the lessee with a copy of the written and signed rental purchase agreement. If there is more than one (1) lessee in a rental purchase agreement, delivery of a copy of the rental purchase agreement to one (1) of the lessees is sufficient to comply with the Act.
A lessor may contract for and receive the following additional charges:
The lessor shall make their books and records reasonably available for inspection by the department or the department's representative. The department may examine the books and records of persons subject to the act and may make investigations of persons necessary to determine compliance. The department may impose an examination fee after the first three days of $100 per day.
If the person's records are located outside Indiana, the person shall, at the persons option, either make them available to the administrator at a convenient location in Indiana, or pay the reasonable and necessary expenses for the department or the department's representative to examine them at the place where they are maintained.
A lessor shall use generally accepted accounting principles and practices in keeping books and records so that the department or the department's representative may determine if the lessor is in compliance with the act or a rule adopted under the act.
A lessor shall keep the lessor's books and records that pertain to a rental purchase agreement for at least 2 years after the rental purchase agreement has terminated.
A lessor who knowingly:
If a lessor violates the act and a lessee who is a party to the agreement prevails in the proceeding, the lessee may recover from the lessor committing the violation; or set off in a counterclaim in any action by the lessor committing the violation and may recover reasonable attorney's fees, as determined by the court; court costs; and the greater of the actual damages, incurred by the lessee as a result of the violation, $300; or 25% of the total rental payment necessary to acquire ownership of the property leased under the agreement.