Arizona § 47-9407 Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest

Arizona Statutes

§ 47-9407 — Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest

Arizona § 47-9407

Title 47Arizona Revised Statutes

Ch. 9SECURED TRANSACTIONS

Art. 4Rights of Third Parties

This text of Arizona § 47-9407 (Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest) is published on Counsel Stack Legal Research, covering Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ariz. Rev. Stat. Ann. § 47-9407 (2026).

Text

A.Except as otherwise provided in subsection 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 or transfer of, or the 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 or transfer or the 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 section 47-2A303, subsection G, a term described in subsection A, paragraph 2 of th

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A. Except as otherwise provided in subsection 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 or transfer of, or the 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 or transfer or the 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 section 47-2A303, subsection G, a term described in subsection A, paragraph 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 section 47-2A303, subsection D unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor. Even in that event, the creation, attachment, perfection and enforcement of the security interest remain effective.