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.