Are you a student or military family who needs household furnishings on a short-term basis? Unable to obtain credit to purchase a much needed refrigerator? Lease-purchase may be your answer. A lease-purchase is a unique transaction that offers consumers easy access to name brand merchandise through a flexible lease with no obligation to purchase. The lease-purchase industry leases durable household merchandise - such as furniture, major appliances and electronic goods -- on a short-term basis (i.e. four months or less) and offers ownership options for consumers. A lease-purchase agreement typically begins with a customer leasing merchandise for a week or a month and making an advance rental payment. At the end of the initial rental period, customers have several options:

1. Renew the agreement by making another advance rental payment;
2. Terminate the agreement and arrange for return of the merchandise to the store; or
3. Exercise an early purchase option.

It may come as a surprise, but rent-to-own businesses, or lease-purchase as it is known, is one of the fastest growing customer service industries today. With over 8,000 stores in all fifty states, the lease-purchase industry generates annual sales of approximately $3.5 billion. However, lease-purchase is still a relatively new industry in Alaska, and some of the rental procedures, and disclosure statements varied from business to business. To ensure consistent and earnest business practices in the lease-purchase industry in Alaska, I have introduced House Bill 128, the Lease-Purchases Act.

House Bill 128 requires comprehensive, clear, and conspicuous disclosure statements in writing in a lease purchase agreement. The required disclosure includes: the total amount and timing of all payments needed to acquire ownership; how the transaction works, who is responsible for the upkeep of the property while being rented, allowing for transfers of warranties, a description of the property and whether the property is new or used. Furthermore, it allows the consumer the right to terminate the agreement at any time without penalty and also the right to reinstate the agreement under certain terms and conditions.

Requiring full and complete disclosure in lease-purchase agreement is good for both the consumer and the lease-purchase business. Both sides have a clear expectation and understanding of the transaction and obligation. HB 128 allows for a level playing for lease-purchase consumers in Alaska and is good pro-consumer legislation. HB 128 passed the house with unanimous approval and is now before the Senate for consideration.

If you would like more information about this bill or any other, please do not hesitate to contact me. Our toll-free phone number during session is 1-877-460-3783 or you can email me at Representative_Lisa_Murkowski@legis.state.ak.us. I also have a web page you may visit for more information at, http://www.akrepublicans.org/pastlegs/murkowski.htm

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