Requires historical automobile, motorcycle and boat restoration businesses to place certain advance payments made by a consumer into an escrow account

1 Co-sponsor

• John A. DeFrancisco

BILL NUMBER:S4042

Title of bill

An act to amend the general business law, in relation to requiring the deposit, into an escrow account, of certain advance payments for the restoration of an historical vehicle

Purpose

To protect consumers' investments in the repair and restoration of historic motor vehicles.

Summary of provisions

Requires those engaged in the business of restoring historical or vintage motor vehicles to escrow customers' advances or down payments, subject to certain thresholds. §806 defines vehicles covered by the bill; §807 outlines the terms under which escrows are applicable and how deposits shall be held; §808 states consumers' remedies under the law for violation of the law.

Existing law

Currently, deposits made by consumers with vintage vehicle restoration businesses are not escrowed.

Justification

The repair and restoration of vintage automobiles, boats or motorcycles can involve tens of thousands of dollars. In a recent case, a vehicle restoration company in New York received deposits from customers but failed to complete the work, and subsequently declared bankruptcy. As a result, customers lost money and had to initiate legal action to secure their rights to their deposits, which had been used by the company to pay other bills and not applied to the restoration work for which the company had accepted down payments. The measure would require those regularly engaged in the business of vehicle restoration, if they require deposits or down payments, to place customers' deposits in escrow against the value of the restoration work.

Legislative history

New bill.

Fiscal implications

None to the state

Effective date

Sixty days after having become a law.