2023 New Mexico Statutes › Chapter 55 - Uniform Commercial Code › Article 2A - Leases › Part 3 - EFFECT OF LEASE CONTRACT › Section 55-2A-310 - Lessor's and lessee's rights when goods become accessions.

(1) Goods are "accessions" when they are installed in or affixed to other goods.
(2) The interest of a lessor or a lessee under a lease contract entered into before the goods became accessions is superior to all interests in the whole except as stated in Subsection (4).
(3) The interest of a lessor or a lessee under a lease contract entered into at the time or after the goods became accessions is superior to all subsequently acquired interests in the whole except as stated in Subsection (4) but is subordinate to interests in the whole existing at the time the lease contract was made unless the holders of such interests in the whole have in writing consented to the lease or disclaimed an interest in the goods as part of the whole.
(4) The interest of a lessor or a lessee under a lease contract described in Subsection (2) or (3) is subordinate to the interest of:
(a) a buyer in the ordinary course of business or a lessee in the ordinary course of business of any interest in the whole acquired after the goods became accessions; or
(b) a creditor with a security interest in the whole perfected before the lease contract was made to the extent that the creditor makes subsequent advances without knowledge of the lease contract.
(5) When under Subsections (2) or (3) and (4) a lessor or a lessee of accessions holds an interest that is superior to all interests in the whole, the lessor or the lessee may (a) on default, expiration, termination or cancellation of the lease contract by the other party but subject to the provisions of the lease contract and this article, or (b) if necessary to enforce his other rights and remedies under this article remove the goods from the whole, free and clear of all interests in the whole, but he must reimburse any holder of an interest in the whole who is not the lessee and who has not otherwise agreed for the cost of repair of any physical injury but not for any diminution in value of the whole caused by the absence of the goods removed or by any necessity for replacing them. A person entitled to reimbursement may refuse permission to remove until the party seeking removal gives adequate security for the performance of this obligation.
History:
1978 Comp., § 55-2A-310, enacted by Laws 1992, ch. 114, § 47.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
Uniform Statutory Source:
— Section 9-314 [55-9-314 NMSA 1978].
Changes:
— Revised to reflect leasing terminology and to add new material.
Purposes:
— Subsections (1) and (2) restate the provisions of Subsection (1) of Section 9-314 [55-9-314 NMSA 1978] to clarify the definition of accession and to add leasing terminology to the priority rule that applies when the lease is entered into before the goods become accessions. Subsection (3) restates the provisions of Subsection (2) of Section 9-314 [55-9-314 NMSA 1978] to add leasing terminology to the priority rule that applies when the lease is entered into on or after the goods become accessions. Unlike the rule with respect to security interests, the lease is merely subordinate, not invalid.
Subsection (4) creates two exceptions to the priority rules stated in Subsections (2) and (3). Subsection (4) deletes the special priority rule found in the provisions of Section 9-314(3)(b) [55-9-314 NMSA 1978] as the interests of the lessor and lessee are entitled to greater protection.
Finally, Subsection (5) is modeled on the provisions of Section 9-314(4) [55-9-314 NMSA 1978] with respect to removal of accessions, restated to reflect the parallel changes in Section 2A-309(8) [55-2A-309 NMSA 1978].
Neither this section nor Section 9-314 [55-9-314 NMSA 1978] governs where the accession to the goods is not subject to the interest of a lessor or a lessee under a lease contract and is not subject to the interest of a secured party under a security agreement. This issue is to be resolved by the courts, case by case.
As to the use of a record other than a writing and communications that are not written,
see
Section 2A-103 [55-2A-103 NSMA 1978], Comment (g).
Cross References:
— Sections 2A-309(8), 9-314(1), 9-314(2), 9-314(3)(b), 9-314(4) [55-2A-309 and 55-9-314 NMSA 1978, respectively].
"Agreed". Section 1-201(3) [55-1-201 NMSA 1978].
"Buyer in the ordinary course of business". Section 2A-103(1)(a) [55-2A-103 NMSA 1978].
"Cancellation". Section 2A-103(1)(b) [55-2A-103 NMSA 1978].
"Creditor". Section 1-201(12) [55-1-201 NMSA 1978].
"Goods". Section 2A-103(1)(h) [55-2A-103 NMSA 1978].
"Holder". Section 1-201(20) [55-1-201 NMSA 1978].
"Knowledge". Section 1-201(25) [55-1-201 NMSA 1978].
"Lease". Section 2A-103(1)(j) [55-2A-103 NMSA 1978].
"Lease contract". Section 2A-103(1)(l) [55-2A-103 NMSA 1978].
"Lessee". Section 2A-103(1)(n) [55-2A-103 NMSA 1978].
"Lessee in the ordinary course of business". Section 2A-103(1)(o) [55-2A-103 NMSA 1978].
"Lessor". Section 2A-103(1)(p) [55-2A-103 NMSA 1978].
"Party". Section 1-201(29) [55-1-201 NMSA 1978].
"Person". Section 1-201(30) [55-1-201 NMSA 1978].
"Remedy". Section 1-201(34) [55-1-201 NMSA 1978].
"Rights". Section 1-201(36) [55-1-201 NMSA 1978].
"Security interest". Section 1-201(37) [55-1-201 NMSA 1978].
"Termination". Section 2A-103(1)(z) [55-2A-103 NMSA 1978].
"Value". Section 1-201(44) [55-1-201 NMSA 1978].
"Writing". Section 1-201(46) [55-1-201 NMSA 1978].
ANNOTATIONS
Effective dates.
— Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 47 effective July 1, 1992.