P.R. Laws tit. 19, § 2307

2019-02-20 00:00:00+00

§ 2307. Restrictions on creation or enforcement of security interest in leasehold in interest or in lessor’s residual interest

(a) Term restricting assignment generally ineffective.— Except as otherwise provided in subsection (b) of this section, a term in a lease agreement is ineffective to the extent that it:

(1) 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

(2) 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.

(b) Effectiveness of certain terms.— A term described in subsection (a)(2) of this section is effective to the extent that there is:

(1) A transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term, or

(2) a delegation of a material performance of either party to the lease contract in violation of the term.

History —Sept. 19, 1996, No. 241, added as § 9–407 on Jan. 17, 2012, No. 21, § 11, eff. 1 year after Jan. 17, 2012.