SEC. 5. Section 2985.8 of the Civil Code is amended to read:
2985.8. (a) A lease contract shall be in writing and the print
SEC. 6. Section 2985.8 is added to the Civil Code, to read:
2985.8. (a) A lease contract shall be in writing, and the print
portion of the contract shall be printed in at least 8-point type and
shall contain in a single document all of the agreements of the
lessor and lessee with respect to the obligations of each party.
(b) At the top of the lease contract, a title that contains the
words “LEASE CONTRACT” or “LEASE AGREEMENT” shall appear in at least
12-point boldface type.
(c) A lease contract shall disclose all of the following:
(1) All of the information prescribed by Regulation M set forth in
the manner required or permitted by Regulation M, whether or not
Regulation M applies to the transaction.
(2) A separate statement labeled “Itemization of Gross Capitalized
Cost” that shall appear immediately following or directly adjacent
to the disclosures required to be segregated by Regulation M. The
Itemization of Gross Capitalized Cost shall include all of the
following and shall be circumscribed by a line:
(A) The agreed-upon value of the vehicle as equipped at the time
of signing the lease.
(B) The agreed-upon value and a description of each accessory and
item of optional equipment the lessor agrees to add to the vehicle
after signing the lease.
(C) The premium for each policy of insurance.
(D) The amount charged for each service contract.
(E) Any charge for an optional debt cancellation agreement.
(F) Any outstanding prior credit or lease balance.
(G) An itemization by type and agreed-upon value of each good or
service included in the gross capitalized cost other than those items
included in the disclosures required in subparagraphs (A) to (F),
inclusive.
(3) The vehicle identification number of the leased vehicle.
(4) A brief description of each vehicle or other property being
traded in and the agreed-upon value of the vehicle or property if the
amount due at the time of signing the lease or upon delivery is paid
in whole or in part with a net trade-in allowance or the
“Itemization of Gross Capitalized Cost” includes any portion of the
outstanding prior credit or lease balance from the trade-in property.

(5) The fee, if any, to be retained by the lessor for document
preparation, which fee may not exceed forty-five dollars ($45) and
shall not be represented as a governmental fee.
(6) The amount of any optional business partnership automation
program fee to register or transfer the vehicle, which shall be
labeled “Optional DMV Electronic Filing Fee.”
(5) The charge, if any, to be retained by the lessor for document
processing authorized pursuant to Section 4456.5 of the Vehicle Code,
which may not be represented as a governmental fee.
(6) The charge, if any, to electronically register or transfer the
vehicle authorized pursuant to Section 4456.5 of the Vehicle Code,
which shall not be represented as a governmental fee.
(d) A lease contract shall contain, in at least 8-point boldface
type, above the space provided for the lessee’s signature and
circumscribed by a line, the following notice: “(1) Do not sign this
lease before you read it or if it contains any blank spaces to be
filled in; (2) You are entitled to a completely filled in copy of
this lease; (3) Warning–Unless a charge is included in this lease
for public liability or property damage insurance, payment for that
coverage is not provided by this lease.”
(e) A lease contract shall contain, in at least 8-point boldface
type, on the first page of the contract and circumscribed by a line,
the following notice:
“THERE IS NO COOLING OFF PERIOD

California law does not provide for a “cooling off” or other
cancellation period for vehicle leases. Therefore, you cannot later
cancel this lease simply because you change your mind, decided the
vehicle costs too much, or wish you had acquired a different vehicle.
You may cancel this lease only with the agreement of the lessor or
for legal cause, such as fraud.”

(f) A lease contract shall contain, in at least 8-point boldface
type, the following notice: “You have the right to return the
vehicle, and receive a refund of any payments made if the credit
application is not approved, unless nonapproval results from an
incomplete application or from incorrect information provided by you.”

(g) The lease contract shall be signed by the lessor and lessee,
or their authorized representatives, and an exact copy of the fully
executed lease contract shall be provided to the lessee at the time
of signing.
(h) A motor vehicle shall not be delivered under a lease contract
subject to this chapter until the lessor provides to the lessee a
fully executed copy of the lease contract.
(i) The lessor shall not obtain the signature of the lessee to a
contract when it contains blank spaces to be filled in after it has
been signed.
(j) If the lease contract contains a provision that holds the
lessee liable for the difference between (1) the adjusted capitalized
cost disclosed in the lease contract reduced by the amounts
described in subparagraph (A) of paragraph (5) of subdivision (b) of
Section 2987 and (2) the settlement proceeds of the lessee’s required
insurance and deductible in the event of theft or damage to the
vehicle that results in a total loss, the lease contract shall
contain the following notice in at least 8-point boldface type on the
first page of the contract:
“GAP LIABILITY NOTICE

In the event of theft or damage to the vehicle that results in a
total loss, there may be a GAP between the amount due upon early
termination and the proceeds of your insurance settlement and
deductible. THIS LEASE PROVIDES THAT YOU ARE LIABLE FOR THE GAP
AMOUNT. Optional coverage for the GAP amount may be offered for an
additional price.”

(k) This section shall become inoperative on July 1, 2012, and, as
of January 1, 2013, is repealed, unless a later enacted statute that
is enacted before January 1, 2013, deletes or extends the dates on
which it becomes inoperative and is repealed.
(k) This section shall become operative on July 1, 2012.