Sec. 42-409. Security interest restricted. Security deposit.
250 words·~1 min read·
/ct/title-42/chapter-743aa-consumer-leases/42-409·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Except as otherwise provided in subsection
(b)of this section, a consumer lease or other record signed by the lessee in connection with the lease may not provide for the creation of a security interest in personal or real property of the lessee to secure the payment of obligations arising from the lease. A security interest created in violation of this section is unenforceable, but does not otherwise affect the validity of the lease.
(b)A consumer lease may provide for:
(1)A security deposit, advance lease payment or other prepayment;
(2)A security interest in unearned insurance premiums or rebates of charges for a contract for services, or a service contract, extended warranty or maintenance agreement regarding the leased goods;
(3)A security interest in the proceeds or benefits of insurance, or of a contract for services, service contract, extended warranty or maintenance agreement on the leased goods, except to the extent the proceeds or benefits represent reimbursement to the lessee for expenses incurred; and
(4)A security interest in an accession to the leased goods.
(c)This section does not preclude a holder from making a permissive filing of a financing statement under article 9 of the Uniform Commercial Code.
(d)A holder is not required to pay interest on a security deposit, advance lease payment or other prepayment, but is required, within two weeks after the application of a security deposit, to account to the lessee in a record for the application of the security deposit.