2023 District of Columbia Code › Title 28 - Commercial Instruments and Transactions. [Enacted title] › Subtitle I - Uniform Commercial Code › Article 2A - Leases › Part III - Effect of Lease Contract › § 28:2A–310. Lessor’s and lessee’s rights when goods become accessions

§ 28:2A–310. Lessor’s and lessee’s rights when goods become accessions.
(a) Goods are “accessions” when they are installed in or affixed to other goods.
(b) 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 (d) of this section.
(c) 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 (d) of this section, 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.
(d) The interest of a lessor or a lessee under a lease contract described in subsection (b) or (c) of this section is subordinate to the interest of:
(1) 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
(2) 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.
(e) When under subsections (b) or (c) and (d) of this section, 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 (i) 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 (ii) if necessary to enforce his or her other rights and remedies under this article, remove the goods from the whole, free and clear of all interests in the whole, but he or she 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.
(July 22, 1992, D.C. Law 9-128, § 2(b), 39 DCR 3830.)
Prior Codifications
1981 Ed., § 28:2A-310.
Section References
This section is referenced in § 28:2A-103.
Uniform Commercial Code Comment
Uniform Statutory Source:
Section 9-314.
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 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 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) 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) with respect to removal of accessions, restated to reflect the parallel changes in Section 2A-309(8).
Neither this section nor Section 9-314 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.
Cross References:
Sections 2A-309(8), 9-314(1), 9-314(2), 9-314(3)(b), 9-314(4).
Definitional Cross References:
“Agreed”. Section 1-201(3).
“Buyer in the ordinary course of business”. Section 2A-103(1)(a).
“Cancellation”. Section 2A-103(1)(b).
“Creditor”. Section 1-201(12).
“Goods”. Section 2A-103(1)(h).
“Holder”. Section 1-201(20).
“Knowledge”. Section 1-201(25).
“Lease”. Section 2A-103(1)(j).
“Lease contract”. Section 2A-103(1)(l).
“Lessee”. Section 2A-103(1)(n).
“Lessee in the ordinary course of business”. Section 2A-103(1)(o).
“Lessor”. Section 2A-103(1)(p).
“Party”. Section 1-201(29).
“Person”. Section 1-201(30).
“Remedy”. Section 1-201(34).
“Rights”. Section 1-201(36).
“Security interest”. Section 1-201(37).
“Termination”. Section 2A-103(1)(z).
“Value”. Section 1-201(44).
“Writing”. Section 1-201(46).