Section 45.29.407. Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest.

   (a) Except as otherwise provided in (b) of this section, a term in a lease agreement is ineffective to the extent that it
        (1) prohibits, restricts, or requires the consent of a party to the lease to the assignment, transfer, creation, attachment, perfection, or enforcement of a security interest in an interest of a party under the lease contract or in the lessor's residual interest in the goods; or
        (2) provides that the assignment, transfer, creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease.
   (b) Except as otherwise provided in AS 45.12.303(g), a term described in (a)(2) of this section is effective to the extent that there is
        (1) a transfer by the lessee of the lessee's right of possession or use of the goods in violation of the term; or
        (2) a delegation of a material performance of either party to the lease contract in violation of the term.
   (c) The creation, attachment, perfection, or enforcement of a security interest in the lessor's interest under the lease contract or the lessor's residual interest in the goods is not a transfer that materially impairs the lessee's prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of AS 45.12.303(d) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.

Authorities

45.12.303;45.29.406

Notes

References

AS 45.12.303 Alienability of party's interest under lease contract or of lessor's residual interest in goods; delegation of performance; transfer of rights.
AS 45.29.406 Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective.

History

(Sec. 1 ch 113 SLA 2000)