Montana Code 30-9A-407. Restrictions on creation or enforcement of security interest in leasehold interest or in lessor’s residual interest
30-9A-407. Restrictions on creation or enforcement of security interest in leasehold interest or in lessor’s residual interest. (1) Except as otherwise provided in subsection (2), a term in a lease agreement is ineffective to the extent that it:
Terms Used In Montana Code 30-9A-407
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Contract: A legal written agreement that becomes binding when signed.
- Goods: means all things that are movable when a security interest attaches. See Montana Code 30-9A-102
- 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
(a)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
(b)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.
(2)Except as otherwise provided in 30-2A-303(7), a term described in subsection (1)(b) is effective to the extent that there is:
(a)a transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term; or
(b)a delegation of a material performance of either party to the lease contract in violation of the term.
(3)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 prospect of obtaining return performance by, materially changes the duty of, or materially increases the burden or risk imposed on the lessee within 30-2A-303(4). This subsection does not apply to the extent that enforcement results in a delegation of a material performance of the lessor.