A consumer who fails to make a timely rental payment may reinstate an agreement without losing any rights or options previously acquired, by taking the required action within five days if the consumer pays monthly or within two days if the consumer pays more frequently than monthly. Nothing in this section shall prevent the accrual of any late charges or reinstatement fees charged by the merchant. Nothing in this section shall prevent the merchant from attempting repossession of the merchandise during the reinstatement period, and the consumer’s right to reinstate an agreement shall not expire because of such a repossession.

Terms Used In Alabama Code 8-25-4

  • consumer: An individual who leases personal property under a rental-purchase agreement. See Alabama Code 40-23-26
  • merchandise: The personal property that is the subject of a rental-purchase agreement. See Alabama Code 40-23-26
  • merchant: A person who, in the ordinary course of business, regularly leases, offers to lease, or arranges for the leasing of merchandise under a rental-purchase agreement, and includes a person who is assigned an interest in a rental-purchase agreement. See Alabama Code 40-23-26
  • RENTAL-PURCHASE AGREEMENT: An agreement for the use of merchandise by a consumer for personal, family, or household purposes, for an initial period of four months or less that is automatically renewable with each payment after the initial period, and that permits the consumer to become the owner of the merchandise. See Alabama Code 40-23-26

A consumer must pay all rental and other charges due or return the merchandise to the merchant if the merchant so requests during the reinstatement period. If the merchandise is returned during the applicable reinstatement period other than through judicial process, the right to reinstate shall be extended for a period of not less than 30 days after the date of the return of the merchandise.

No consumer shall have the right to reinstate more than three times during the term of any one rental-purchase agreement.

On reinstatement, the merchant shall provide the consumer with the same merchandise or substitute merchandise of comparable quality and condition; however, the merchant shall not be required to provide new disclosures upon reinstatement.

(Acts 1986, No. 86-497, p. 945, §4.)