40-19-109. Default; notice of default and right to cure.

(a) In any rental-purchase agreement, after a consumer is in default for three (3) business days or more and does not voluntarily surrender possession of the rented property, a merchant may give the consumer the notice provided in this section. Notice may be given to the consumer under this section by the merchant personally delivering the notice to the consumer or by mailing the notice to the consumer's last known residential address.

(b) The notice shall be in writing and conspicuously state the name, address and telephone number of the merchant to whom payment is made, a brief identification of the transaction, the consumer's right to cure any default, the amount of payment and the date the payment shall be made to cure the default. The notice shall be in substantially the form required by rule of the administrator.

(c) With respect to rental-purchase agreements with payments or options to renew more frequently than monthly, after default consisting of failure to renew or return the property, a merchant may not initiate court action to recover rented property until three (3) business days after notice of the consumer's right to cure is given. With respect to all other rental-purchase agreements, after default consisting of failure to renew or return the property, a merchant may not initiate court action to recover rented property until five (5) business days after notice of the consumer's right to cure is given.

(d) After notice is given and until expiration of the minimum applicable period, a consumer may cure all defaults consisting of failure to renew and failure to return the property by tendering the amount of all unpaid sums due and payment of a renewal payment.

(e) This section shall not prohibit a consumer from voluntarily surrendering possession of property that is rented or a merchant from requesting and accepting surrender of property at any time after default. In any enforcement proceeding, a merchant shall affirmatively plead and prove either that the notice to cure is not required or that the merchant has given the required notice. The failure to plead shall not invalidate any action taken by the merchant that is otherwise lawful and if the merchant had rightfully repossessed the property the repossession shall not constitute conversion.