Pub. 1 2019-20 Issue 3

Pub. Year 1 2019-2020 Issue 3 19 WVADA Brokerage | Leasing | Appraisal | Consulting 304-840-1781 | Quintie Smith at INVS@aol.com | 3818 MacCorkle Avenue SE Charleston, WV 25304 Office: 304-925-7000 | Website: realcorpinc.com An unmatched level of knowledge and experience in the real estate market. Commercial Real Estate terms as deferred payments and balloon payments have to be clearly identified along with amounts and due dates of those payments. Turning to leases, similar requirements exist under Regula - tion M of the Truth In Lending Act. I am only going to address closed-end leases as most dealers do not offer open-end leas - ing, which has additional disclosure requirements. Like retail installment sales, lease advertising is about “trigger terms.” If you advertise either a monthly payment or anything about the drive-off cost (i.e. capitalization cost reduction, security deposit, “no down payment” etc.) it “triggers” the need for the following disclosures: 1. A clear statement identifying the transaction as a lease; 2. The number, amounts, and period of scheduled payments; 3. The total amount due on or before delivery; and 4. A statement indicating whether or not a security deposit is required. An example of a valid lease disclosure with “trigger terms” would be “Lease for $419 a month for 36 months. $1,999 due at lease signing. No security deposit required.” Again, please remember that all the above disclosures must be clear and conspicuous. Also, please be aware of the “equal prominence rule,” which we discussed previously. This adver - tising principle generally states that if you state anything about a component of the drive-off cost, such as “no down payment,” Mr. Brown serves as General Counsel for the West Virginia Automobile Dealers Association. If you have any questions, you may reach him at (304) 344-0100 or jeb@pffwv.com. www.pffwv.com. Best of luck out there. then the total amount that is due at the time of delivery must be disclosed “no less prominently than any such component.” I do appreciate and recommend that mileage restrictions and mileage overage charges be clearly disclosed, but they do not fall under the purview of “trigger terms” within regulation M. Consequently, with leasing, I encourage dealers to make very clear that the car being advertised is a lease and that if there are any other disclosures, that similar size font be used to de - scribe any drive-off cost. Failure to do so can result in viola - tions of Regulation M under the Truth-In-Lending Act. Regulation Z and M are very specific and unintentional mis - takes can be made. Please make sure that you choose counsel experienced in advertising law. I certainly hope that these two Counselor’s Corner have pro - vided you some guidance in this ever-complex world of adver - tising that we operate. The next Counselor’s Corner will con - clude our advertising series by addressing the West Virginia Prize and Gift Act. t