(1) Except as otherwise provided in Section 7-2A-306, a creditor of a lessee takes subject to the lease contract.

Terms Used In Alabama Code 7-2A-307

  • Contract: A legal written agreement that becomes binding when signed.
  • Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures (Section 7-2A-309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction. See Alabama Code 7-2A-103
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lease: means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. See Alabama Code 7-2A-103
  • Lease contract: means the total legal obligation that results from the lease agreement as affected by this article and any other applicable rules of law. See Alabama Code 7-2A-103
  • Leasehold interest: means the interest of the lessor or the lessee under a lease contract. See Alabama Code 7-2A-103
  • Lessee: means a person who acquires the right to possession and use of goods under a lease. See Alabama Code 7-2A-103
  • Lessor: means a person who transfers the right to possession and use of goods under a lease. See Alabama Code 7-2A-103
(2) Except as otherwise provided in subsection (3) and in Sections 7-2A-306 and 7-2A-308, a creditor of a lessor takes subject to the lease contract unless the creditor holds a lien that attached to the goods before the lease contract became enforceable.
(3) Except as otherwise provided in Sections 7-9A-317, 7-9A-321, and 7-9A-323, a lessee takes a leasehold interest subject to a security interest held by a creditor of the lessor.
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