2006 Ohio Revised Code - 1310.35. (UCC 2A-307) Priority of liens arising by attachment or levy on, security interests in, and other claims to goods.

§ 1310.35. (UCC 2A-307) Priority of liens arising by attachment or levy on, security interests in, and other claims to goods.
 

(A)  Except as otherwise provided in section 1310.34 of the Revised Code, a creditor of a lessee takes subject to the lease contract. 

(B)  Except as otherwise provided in division (C) of this section and in sections 1310.34 and 1310.36 of the Revised Code, 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. 

(C)  Except as otherwise provided in sections 1309.317, 1309.321, and 1309.323 of the Revised Code, a lessee takes a leasehold interest subject to a security interest held by a creditor of the lessor. 
 

HISTORY: 144 v H 693 (Eff 11-6-92); 149 v S 74. Eff 7-1-2001.
 

The effective date is set by section 4 of SB 74. 

 

Official Comment

None for subsection (1). Subsection (2) is derived from Section 9-301, and subsections (3) and (4) are derived from Section 9-307(1) and (3), respectively. 

The provisions of Sections 9-301 and 9-307(1) and (3) were incorporated, and modified to reflect leasing terminology and the basic concepts reflected in this Article. 

1. Subsection (1) states a general rule of priority that a creditor of the lessee takes subject to the lease contract. The term lessee (Section 2A-103(1)(n)) includes sublessee. Therefore, this subsection not only covers disputes between the prime lessor and a creditor of the prime lessee but also disputes between the prime lessor, or the sublessor, and a creditor of the sublessee. Section 2A-301 official comment 3(g). Further, by using the term creditor (Section 1-201(12)), this subsection will cover disputes with a general creditor, a secured creditor, a lien creditor and any representative of creditors. Section 2A-103(4). 

2. Subsection (2) states a general rule of priority that a creditor of a lessor takes subject to the lease contract. Note the discussion above with regard to the scope of these rules. Section 2A-301 official comment 3(g). Thus, the section will not only cover disputes between the prime lessee and a creditor of the prime lessor but also disputes between the prime lessee, or the sublessee, and a creditor of the sublessor. 

3. To take priority over the lease contract, and the interests derived therefrom, the creditor must come within the exception stated within the rule in subsection (2) or within one of the provisions of Article 9 mentioned in subsection (3). Subsection (2) provides that where the creditor holds a lien (Section 2A-103(1)(r)) that attached before the lease contract became enforceable (Section 2A-301), the creditor does not take subject to the lease. Subsection (3) provides that a lessee takes its leashold interest subject to a security interest except as otherwise provided in Sections 9-317, 9-321, or 9-323. 

4. The rules of this section operate in favor of whichever party to the lease contract may enforce it, even if one party perhaps may not, e.g., under Section 2A-201(1)(b).