Int 0540-1999

Be it enacted by the Council as follows: Section 1. Legislative declaration. The Council finds that of all the complaints filed with the Department of Consumer Affairs ("Department") for the last decade, furniture and major appliance stores have been one of the most complained about categories of businesses. The Council finds that those who sell furniture and major appliances routinely fail to comply with the New York State general business law and the City's consumer protection law regarding refunds of deposits on undelivered merchandise, a situation which is difficult to correct in the absence of licensing. The Council further finds that licensing furniture and major appliance dealers would significantly strengthen the Department's ability to obtain redress for consumers victimized by defective and damaged merchandise, the late delivery or nondelivery of ordered goods, and the failure of those who sell these items to refund deposits as required by City and state laws. The bond requirement and trust fund alternative would provide funds from which consumers could be compensated for deposits lost by consumers when a furniture or major appliance dealer with whom they have left a deposit either goes out of business or files for bankruptcy. �2. Chapter 2 of title 20 of the administrative code of the city of New York is amended by adding a new subchapter 33 to read as follows: SUBCHAPTER 33 FURNITURE AND MAJOR APPLIANCE DEALERS �20-550 Definitions. a. "Person" means any individual, firm, partnership, corporation association or legal entity. b. "Furniture" means any article used to furnish a house, apartment or place of business or accommodation, as distinguished from permanent fixtures or adjuncts, including but not limited to chairs, tables, cabinets, sofas, carpets, rugs, curtains, bedsteads and chests. c. "Major appliance" means air conditioners, audio or stereo equipment, washing machines for clothes, clothes dryers, dishwashers, food freezers, refrigerators, stoves, ranges, ovens, sewing machines, television sets, tape and video recorders or any other consumer durable generally intended for household use having a purchase price in excess of two hundred dollars. d. "Dealer" means any person who is in the business of selling furniture and/or major appliances. e. "Special order" means items of furniture that are manufactured in accordance with customer selected options in the exact quantity ordered by such customer. �20-551 License required. No person may sell furniture and/or major appliances unless such dealer has first obtained a license issued pursuant to �20-553 of this subchapter; provided, however, that any dealer who exclusively sells furniture from stock in the possession of such dealer at the time of sale shall be exempt from the requirements contained in this subchapter. �20-552 Application; fee; term. a. An application for a license required under this subchapter or for any renewal thereof shall be made to the commissioner in such form and manner as he or she shall prescribe by rule. b. There shall be a biennial fee for a furniture or major appliance dealers license as follows: 1. Three hundred and forty dollars for a business that is not required to be licensed as an electronics store pursuant to subchapter twenty-nine of this chapter. 2. Twenty-five dollars for a dealer that possesses a currently valid license as an electronics store pursuant to subchapter twenty-nine of this chapter. �20-553 Issuance of license. A furniture or major appliance dealers license shall be granted in accordance with the provisions of this subchapter and any rules promulgated by the commissioner thereunder. The commissioner may refuse to issue to an applicant any license required under this subchapter based upon a determination made after due notice and opportunity to be heard that such applicant has engaged in conduct which would constitute a basis for license suspension or revocation as set forth in �20-555 of this subchapter. �20-554 Bond. a. As a condition of the issuance of a license pursuant to this subchapter, each applicant shall furnish to the commissioner a surety bond in the sum of twenty thousand dollars, payable to the city of New York, executed by the applicant and a surety approved by the commissioner. Such bond shall be conditioned upon the applicant's compliance with the provisions of this title and any rules promulgated thereunder, and upon the further condition that the applicant will pay to the city any fine, penalty or other obligation, or any final judgment recovered by any person who entered into a transaction with a licensee hereunder and was damaged thereby, within thirty days of its imposition. The commissioner may by rule authorize an applicant to, in lieu of a bond, deposit cash to satisfy the requirements of this section in an amount equal to the sum of the surety bond required by this section. b. 1. The commissioner may by rule establish a fund to be administered by the comptroller and authorize applicants for a license pursuant to this subchapter to, in lieu of a bond or cash equivalent, make contributions to such fund to satisfy the requirements of subdivision a of this section. The commissioner may promulgate such rules as are necessary for the administration of such fund including, but not limited to, rules setting forth the conditions for participation in the fund, the contributions required to be made to the fund, and the circumstances under which disbursements will be made from the fund, provided, however, that a contribution to such fund shall be required to be made only at the time of the application for a furniture or major appliance dealers license or renewal thereof. 2. Disbursements from the fund will be made at the discretion of the commissioner or his or her designee, provided, however, that invasion of the fund shall be limited to no more than five thousand dollars for all awards, fines and judgments arising out of a single written receipt or order for the retail purchase of any furniture or major appliance. �20-555 Renewal, suspension and revocation of licenses. In addition to any powers of the commissioner, and not in limitation thereof, the commissioner may refuse to renew any license required under this subchapter and may suspend or revoke any such license, after due notice and opportunity to be heard, upon the occurrence of any one or more of the following conditions: a. The person holding a furniture or major appliance dealers license or, where applicable, any of its officers, principals, directors, employees, or stockholders owning more than ten percent of the outstanding stock of the corporation, has been found to have violated any provision of this title, or any rules promulgated thereunder, or any orders of the commissioner issued pursuant thereto, or to have knowingly caused, permitted, aided, or abetted another in committing such violation; or b. The person holding a furniture or major appliance dealers or, where applicable, any of its officers, principals, directors, employees, or stockholders owning more than ten percent of the outstanding stock of the corporation, has made a material false statement or concealed a material fact in connection with the filing of any application pursuant to this subchapter or has been found to have committed fraud or misrepresentation upon a customer; or c. The person holding a furniture or major appliance dealers license or, where applicable, any of its officers, principals, directors, employees, or stockholders owning more than ten percent of the outstanding stock of the corporation, has been found to have engaged in untrue, misleading or deceptive advertising, or deceptive or unconscionable trade practices as described in chapter five of this title and any rules promulgated thereunder; or d. The person holding a furniture or major appliance dealers license or, where applicable, any of its officers, principals, directors, employees, or stockholders owning more than ten percent of the outstanding stock of the corporation, has not paid, within the time permitted by law, any civil penalty or judgment duly imposed pursuant to the provisions of this title or any rule promulgated thereunder; or e. The person holding a furniture or major appliance dealers license or, where applicable, any of its officers, principals, directors, employees, or stockholders owning more than ten percent of the outstanding stock of the corporation, has been adjudged by a court of competent jurisdiction to have failed to perform his or her obligations under any express, implied, or written warranty for furniture or major appliances made as part of his or her contract with a consumer. �20-556 Transferability. No license issued pursuant to this subchapter shall be transferred or assigned to any person or used by any person other than the licensee to whom it was issued. �20-557 Duties of Licensee. a. Posting of license. Every person holding a furniture or major appliance dealers license shall conspicuously post such license. b. Disclosure of selling price. 1. All furniture and major appliances sold, exposed for sale or offered for sale at retail by a dealer licensed under this subchapter that are publicly displayed shall have conspicuously displayed, at the point of exposure or offering for sale, the total selling price, exclusive of sales tax, by means of a stamp, tag or label attached to the item, or a sign at the point of display which indicates the item to which the price refers, provided, however, that such stamp, tag, label or sign must be plainly visible, without the assistance of store personnel. This paragraph shall not apply to furniture or major appliances displayed in the window of a furniture or major appliance store. 2. Every dealer licensed pursuant to this subchapter shall indicate in a clear and conspicuous manner the current total selling price on any written presentation materials used to make such sale, including , but not limited to, fliers, posters, computerized lists or presentations, catalogs, books or brochures when major appliances are offered for sale but are not publicly displayed. 3. Notwithstanding the provisions of �20-558 of this subchapter, the civil penalties imposed for a violation of this subdivision shall be those provided for violations of �20-708 of this title. c. Receipts and customer orders. A dealer licensed pursuant to this subchapter shall provide a written receipt that includes the licensee's name, address, phone number and license number, as well as: 1. the date of the purchase; 2. the amount of money paid for each item or set of items, the method of payment, the total amount of money paid, and a separate statement of tax; 3. an description adequate to identify the item(s) purchased; 4. the estimated delivery date or range of delivery dates for the furniture or major appliances; and 5. if the item is a "special order" it must be conspicuously marked on the receipt. d. Delivery of ordered goods. 1. When a licensee will be unable to deliver furniture or major appliances by the latest date stated for delivery, the affected customer must be notified in writing of the delay and the revised delivery date or range of delivery dates; and must be advised in writing of their options, which shall be as follows: (a) canceling the contract and receiving a full refund; or (b) canceling the contract and receiving a credit from the dealer in an amount equal to any deposit made by the consumer; or (c) negotiating a new delivery date or range of dates with the dealer which date or range of dates shall thereafter be the latest date stated for the delivery in the contract for the purposes of this subdivision; or (d) modifying the contract by making a new selection of furniture or major appliance. 2. In the case of special orders, a dealer shall be authorized to extend the latest date stated in the original contract for delivery by a period not to exceed thirty days if the dealer can provide evidence that the manufacturer has begun work on the order and anticipates being able to fill the order within such period. Notice of such extension and provision of such evidence shall be made in accordance with rules promulgated by the commissioner. e. In the event that a consumer elects to cancel the contract and receive a refund, the licensee must make the refund within two weeks of receiving the demand for such refund. f. Notwithstanding any other provisions of this chapter, where a delay in delivery as determined from the original contract is caused by a strike or act of nature, the applicable delivery date shall be extended by the amount of time equal to the duration of the strike or condition giving rise to the delay, or thirty days, whichever is less. g. Where a failure to deliver, or a delay in delivery beyond the latest day promised or stated for delivery, is caused solely by a consumer, such failure or delay shall not constitute an unlawful practice. h. Nothing herein contained shall be construed to be a waiver or limitation of any right of a consumer elsewhere provided by law. i. Failure to provide refund or credit. The commissioner may order any licensee under this subchapter who has been found by the commissioner to have failed to provide, in the prescribed manner and within the prescribed time, any refund or credit to which a customer is entitled under this subchapter, to pay to the customer the full amount of the refund or credit that was due plus an amount equal to the lesser of: (i) twice the amount of the full refund or credit that was due; or (ii) one thousand dollars. The remedies in this subdivision are in addition to any other remedies to which the customer may be entitled under applicable law. j. Records. Every person licensed as a furniture or major appliance dealer shall maintain records, ledgers, receipts, bills and such other written records as the commissioner may prescribe by rule. Such records shall be made available for inspection by the commissioner at his or her request during reasonable business hours at either the licensee's place of business or at the offices of the department. �20-558 Violations. a. The civil penalties imposed pursuant to this section shall be in addition to any other sanctions and orders which may be imposed by the commissioner pursuant to this title including, but not limited to, such sanctions and orders which may be imposed pursuant to �20-105 of this code. b. Notwithstanding the provisions of subdivisions a and b of �20-106 of this code, any person who violates any provision of this subchapter or any rules promulgated thereunder shall be subject to a civil penalty of not less than two hundred and fifty dollars nor more than two thousand dollars for each violation, to be recovered in a civil action or in an administrative tribunal with jurisdiction. �3. This local law shall take effect one hundred eighty days after it shall have been enacted into law; provided, however, that this local law shall expire and shall be of no further force and effect two years after such effective date and provided further, that the department of consumer affairs may take any actions necessary prior to such effective date for the implementation of this local law including, but not limited to, the adoption of any necessary rules. 12 1