D.C. Code § 28:2A-307
“Security interest”. Section 1-201(37).
“Pursuant to commitment”. Section 2A-103(3).
“Party”. Section 1-201(29).
“Lien”. Section 2A-103(1)(r).
“Lessor”. Section 2A-103(1)(p).
“Lessee in the ordinary course of business”. Section 2A-103(1)(o).
“Lessee”. Section 2A-103(1)(n).
“Leasehold interest”. Section 2A-103(1)(m).
“Lease contract”. Section 2A-103(1)(l).
“Lease”. Section 2A-103(1)(j).
“Knowledge” and “Knows”. Section 1-201(25).
“Goods”. Section 2A-103(1)(h).
Definitional Cross References: “Creditor”. Section 1-201(12).
Cross References:Sections 1-201(12), 1-201(25), 1-201(37), 1-201(44), 2A-103(1)(n), 2A-103(1)(o), 2A-103(1)(r), 2A-103(4), 2A-201(1)(b), 2A-301 official comment 3(g), Article 9, especially Sections 9-301, 9-307(1) and 9-307(3).
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).
3. To take priority over the lease contract, and the interests derived therefrom, the creditor must come within the exception stated 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 leasehold interest subject to a security interest except as otherwise provided in Sections 9-317, 9-321, or 9-323.
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.
Purposes: 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).
Changes: 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.
Uniform Statutory Source: 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.
July 22, 1992, D.C. Law 9-128, § 2(b), 39 DCR 3830
Oct. 26, 2000, D.C. Law 13-201, § 201(d)(3), 47 DCR 7576
D.C. Law 13-201, enacting a new Article 9 of the Uniform Commercial Code applicable July 1, 2001, made conforming amendments to this section applicable upon the same date.
1981 Ed., § 28:2A-307.