§ 554.13304 — Subsequent lease of goods by lessor

Iowa § 554.13304

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

1. Subject to section 554.13303, a subsequent lessee from a lessor of goods under an
existing lease contract obtains, to the extent of the leasehold interest transferred, the
leasehold interest in the goods that the lessor had or had power to transfer, and except as
provided in subsection 2 and section 554.13527, subsection 4, takes subject to the existing
lease contract. A lessor with voidable title has power to transfer a good leasehold interest
to a good faith subsequent lessee for value, but only to the extent set forth in the preceding
sentence. If goods have been delivered under a transaction of purchase, the lessor has that
power even though:
a. the lessor’s transferor was deceived as to the identity of the lessor;
b. the delivery was in exchange for a check which is later dishonored;
c. it was agreed that the transaction was to be a “cash sale”; or
d. the delivery was procured through fraud punishable as larcenous under the criminal
law.
2. A subsequent lessee in the ordinary course of business from a lessor who is a merchant
dealing in goods of that kind to whom the goods were entrusted by the existing lessee of that
lessor before the interest of the subsequent lessee became enforceable against that lessor
obtains, to the extent of the leasehold interest transferred, all of that lessor’s and the existing
lessee’s rights to the goods, and takes free of the existing lease contract.
3. A subsequent lessee from the lessor of goods that are subject to an existing lease
contract and are covered by a certificate of title issued under a statute of this state or of
another jurisdiction takes no greater rights than those provided both by this section and by
the certificate of title statute.