70A-2a-310 - Lessor's and lessee's rights when goods become accessions.
70A-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 goodsbecame 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 orafter the goods became accessions is superior to all subsequently acquired interests in the wholeexcept as stated in Subsection (4), but is subordinate to interests in the whole existing at the timethe lease contract was made unless the holders of such interests in the whole have in writingconsented 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 ofbusiness 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 wasmade to the extent that the creditor makes subsequent advances without knowledge of the leasecontract.
(5) When, under Subsections (2) or (3) and (4), a lessor or a lessee of accessions holds aninterest 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 otherparty but subject to the provisions of the lease contract and this chapter; or
(b) if necessary to enforce his other rights and remedies under this chapter, remove thegoods from the whole, free and clear of all interests in the whole, but he must reimburse anyholder of an interest in the whole who is not the lessee and who has not otherwise agreed for thecost of repair of any physical injury but not for any diminution in value of the whole caused bythe absence of the goods removed or by any necessity for replacing them. A person entitled toreimbursement may refuse permission to remove until the party seeking removal gives adequatesecurity for the performance of this obligation.
Enacted by Chapter 197, 1990 General Session