S.C. Code Regs. § § 28-900

Current through Register Vol. 48, No. 10, October 25, 2024

Section 28-900 - Motor Vehicle Subleasing and Loan Assumption Brokers

A. Definitions

Definitions shall be those contained in the Regulation of the Subleasing and Loan Assumption of Motor Vehicles Act. S.C. Code Ann. Section 37-13-10 et seq. (1976 as amended).

B. Application Process

All motor vehicle sublease arrangers must submit the following in order to be considered for a license to engage in the business of auto brokering in this State

(1) A formal application for the license in the form and detail the Administrator requires, executed under oath by the owner(s) of the business or other persons as required by the Administrator.

(2) A certified copy of its charter or articles of incorporation and its bylaws, if any. If a partnership, any partnership filings and agreements.

(3) If a corporation, a certified copy of the good standing certificate from the Secretary of State.

(4) A certified copy of its most recent financial statement certified by the owner(s) as true and correct as of the date of the signature(s) or an audited written financial statement by an accountant licensed in this State.

(5) A copy of the sublease agreement incorporating all requirements of applicable law and regulation.

(6) A surety bond or irrevocable letter of credit in the amount of $25,000.00 per location with the Administrator of the Department of Consumer Affairs of the State of South Carolina listed in favor of the bond or letter of credit.

(7) An application fee of $250.00 per location due by October 31 each year. The renewal period will be between September 1 and October 31 of each year. The renewal fee is the same as the initial fee.

C. Contract Requirements Between the Sublease Arranger and Sublessee:

(1) The agreement must be in writing.

(2) It must include the name and current physical address and telephone number of the sublease arranger.

(3) The name and address of the sublessee.

(4) The signature of the authorized agent for the sublease arranger.

(5) The signature of the sublessee(s).

(6) The VIN number of the motor vehicle subject to the contract. This VIN number must be listed in the upper right corner of the agreement.

(7) The year, make and model of the motor vehicle subject to the agreement.

(8) The odometer reading of the motor vehicle at the beginning of the agreement. In the event the vehicle is returned prior to the end of the sublease agreement, the sublease arranger must indicate the ending odometer reading in the sublessee's file.

(9) A copy of the written authorization that has been received from the secured party or lessor on the vehicle.

(10) Accurate Truth in Leasing disclosures for the sublessee or in the case of assumptions, accurate Truth in Lending disclosures pursuant to 15 U.S.C. Section 1601 et seq.

(11) A statement that indicates all rights under any applicable warranties or service contracts regarding the motor vehicle transfer to sublessee unless a pro rata rebate for unexpired coverage is applied itemized, to reduce the sublessee's contract under the sublease.

(12) A statement of fees for sublease arranger services.

(13) A statement of services the sublease arranger will provide for the sublessee.

(14) A statement of who is responsible for automotive insurance.

D. Contract Requirements Between Sublease Arranger and Buyer or Lessee

(1) The agreement must be in writing.

(2) It must include the name and physical and mailing address and telephone number of the sublease arranger as of the date the sublease agreement was consummated, and the sublease arranger's current physical and mailing address and telephone number.

(3) It must include the name and address of buyer or lessee.

(4) The signature of authorized agent of the sublease arranger.

(5) The signature of the buyer or lessee.

(6) The VIN number of the motor vehicle subject to the agreement. This VIN number must be included in the upper right corner of the agreement.

(7) The odometer reading at the beginning of the agreement. In the event the vehicle is returned prior to the end of the sublease agreement, the ending odometer reading must be kept with the sublease file.

(8) A copy of the written authorization that has been received from the secured party or lessor on the vehicle.

(9) A statement indicating that all rights under any applicable warranties and service contracts regarding the motor vehicle transfer to sublessee unless a pro rata rebate for unexpired coverage is applied to reduce the sublessee's contract.

(10) A statement of fees for the sublease arranger's services to the buyer or lessee.

(11) A statement of services the sublease arranger will provide to the buyer or lessee.

(12) A statement that an identification of the location of the vehicle is available upon the request of the buyer, lessee, secured party or lessor.

(13) A written notice in the following language must be more conspicuous than all other disclosures except truth in leasing and lending requirements and the company name. "Notice: This sublease arrangement does not release you from liability for your original security agreement or lease."

(14) A statement of who is responsible for automobile insurance.

E. Fees and Charges:

(1) Only charges that are permitted by this regulation may be assessed in sublease arrangements.

(2) The sublease arranger may assess a brokerage fee from the buyer or lessee who places his vehicle with the sublease arranger for a sublease arrangement in the amount of no more than $2,000.00 or 10% of the unpaid balance of the vehicle at the time of the sublease, whichever is less. The sublease arranger may contract for a minimum fee of no more than $250.00.

(3) The sublease arranger may assess a brokerage fee from the sublessee in an amount of no more than $2,000.00 or 10% of the unpaid balance of the vehicle at the time of the sublease, whichever is less. The sublease arranger may contract for a minimum fee of no more than $250.00.

(4) The sublease arranger may assess a late charge for any payment remaining unpaid more than ten days from its due date in an amount of $10.00 or 5% of the installment payment, whichever is less.

(5) The sublease arranger may assess only such repossession charges as are reasonable and necessary to obtain possession of the vehicle after default by the sublessee, including reasonable attorney's fees actually paid to an attorney other than a salaried employee of the sublease arranger, not to exceed 15% of the unpaid balance at the time of default.

(6) The sublease arranger may make a reasonable charge for skip insurance that will protect only the secured party and the buyer or lessee. The sublease arranger nevertheless, must arrange for such skip insurance within thirty (30) days of notice of cancellation to the buyer or lessee, the lienholder and the Department.

F. Recordkeeping

Records are to be made available at all times for inspection by the Department of Consumer Affairs on demand. These records include:

(1) A copy of the completed sublease agreement between the sublease arranger and the sublessee.

(2) A copy of the completed agreement between the sublease arranger and the original buyer or lessee.

(3) A copy of the written authorization for the sublease of the vehicle from the vehicle's secured party or lessor.

(4) A copy of all advertising used including a record of the source and date(s) used by the sublease arranger. All advertising must include the statement that "vehicles are available for sublease" and that "(insert business name) is a sublease arranger." Advertising records must be kept for a period of one year from the last date of use.

(5) Copies of Skip Insurance policies.

(6) Records must be kept in alphabetical order by the last name of the sublessee.

(7) Sublessee files must contain copies of any previous sublease agreements of the same vehicle by the sublease arranger.

(8) A copy of the original agreement between the secured party or lessor and the buyer or lessee of the vehicle.

(9) All records except advertising must be kept for a minimum of three years.

G. Licenses

(1) Licenses must be posted in a conspicuous place at the business location.

(2) All licensed brokers must give 30 days notice of intent prior to opening, closing, consolidating or moving a business location in this State. No licenses shall be effective for consolidated brokers or brokers that have moved their business locations without complying with this section.

(3) Issuance of a license does not indicate approval or acceptance of the terms of any contract, agreement or other document submitted in support of the application. No licensee will in any way represent that its services or contracts are approved by the State or any state agency. This does not prevent a licensee from indicating the business is licensed by the Department.

S.C. Code Regs. § 28-900

Added by State Register Volume 17, Issue No. 4, eff April 23, 1993.

Statutory Authority: 1976 Code Section 37-13-10 et seq.