§ 41-02.1-40 — (2A-310) Lessor's and lessee's rights when goods become accessions

North Dakota § 41-02.1-40

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-02.1: Leases

Text

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.
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 subsection 2 or 3 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 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 chapter, or if necessary to
enforce the lessor's or lessee's other rights and remedies under this chapter, remove
the goods from the whole, free and clear of all interests in the whole. However, the

lessor or the lessee 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.