Under Renegotiations, extensions, and assumptions-12 CFR 213.5; any lease that is renegotiated or extended by longer than six months is considered to be a new lease, subject to new disclosure requirements, except when:
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A. B. C. D.AB
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Under 12 CFR 213.5 of the Consumer Leasing Act, any lease that is renegotiated or extended by longer than six months is considered to be a new lease and subject to new disclosure requirements. However, there are exceptions to this rule, which are detailed below:
A. One or more payments are deferred, whether or not there is a charge for the deferral:
If a lease is renegotiated or extended by more than six months, but one or more payments are deferred, then the lease is not considered a new lease and is not subject to new disclosure requirements. It doesn't matter whether there is a charge for the deferral or not.
B. Lease property is substituted with property of substantially equivalent or greater value, if no other lease terms are changed:
If a lease is renegotiated or extended by more than six months, but the lease property is substituted with property of substantially equivalent or greater value, and no other lease terms are changed, then the lease is not considered a new lease and is not subject to new disclosure requirements.
C. In a multiple-item lease, property is added, deleted, or substituted provided the average periodic payment does not change by more than 35 percent:
If a lease is a multiple-item lease and is renegotiated or extended by more than six months, but property is added, deleted, or substituted, provided that the average periodic payment does not change by more than 35 percent, then the lease is not considered a new lease and is not subject to new disclosure requirements.
D. There is an agreement resulting from a pre-order:
If a lease is renegotiated or extended by more than six months as a result of an agreement resulting from a pre-order, then the lease is not considered a new lease and is not subject to new disclosure requirements.
It is important to note that if a lease falls under any of the above exceptions, it is still subject to the general disclosure requirements under the Consumer Leasing Act. However, the lessor does not need to provide new disclosures as if it were a new lease.