{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/8.2A-309.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/8.2A-309.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/8.2A-309.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/8.2A-309.html"}],"law_id":76447,"edition_id":1,"section_id":76447,"structure_id":14808,"section_number":"8.2A-309","catch_line":"Lessor’s and lessee’s rights when goods become fixtures","history":"1991, c. 536; 2000, c. 1007.","full_text":"1\n\nIn this section:a\n\nGoods are “fixtures” when they become so related to particular real estate that an interest in them arises under real estate law;b\n\nA “fixture filing” is the filing, in the office where a record of a mortgage on the real estate would be filed or recorded, of a financing statement covering goods that are or are to become fixtures and conforming to the requirements of subdivisions (a) and (b) of § 8.9A-502;c\n\nA lease is a “purchase money lease” unless the lessee has possession or use of the goods or the right to possession or use of the goods before the lease agreement is enforceable;d\n\nA mortgage is a “construction mortgage” to the extent it secures an obligation incurred for the construction of an improvement on land including the acquisition cost of the land, if the recorded writing so indicates; ande\n\n“Encumbrance” includes real estate mortgages and other liens on real estate and all other rights in real estate that are not ownership interests.2\n\nUnder this title a lease may be of goods that are fixtures or may continue in goods that become fixtures, but no lease exists under this title of ordinary building materials incorporated into an improvement on land.3\n\nThis title does not prevent creation of a lease of fixtures pursuant to real estate law.4\n\nThe perfected interest of a lessor of fixtures has priority over a conflicting interest of an encumbrancer or owner of the real estate if:a\n\nThe lease is a purchase money lease, the conflicting interest of the encumbrancer or owner arises before the goods become fixtures, the interest of the lessor is perfected by a fixture filing before the goods become fixtures or within ten days thereafter, and the lessee has an interest of record in the real estate or is in possession of the real estate; orb\n\nThe interest of the lessor is perfected by a fixture filing before the interest of the encumbrancer or owner is of record, the lessor’s interest has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner, and the lessee has an interest of record in the real estate or is in possession of the real estate.5\n\nThe interest of a lessor of fixtures, whether or not perfected, has priority over the conflicting interest of an encumbrancer or owner of the real estate if:a\n\nThe fixtures are readily removable factory or office machines, readily removable equipment that is not primarily used or leased for use in the operation of the real estate, or readily removable replacements of domestic appliances that are goods subject to a consumer lease, and before the goods become fixtures the lease contract is enforceable;b\n\nThe conflicting interest is a lien on the real estate obtained by legal or equitable proceedings after the lease contract is enforceable;c\n\nThe encumbrancer or owner has consented in writing to the lease or has disclaimed an interest in the goods as fixtures; ord\n\nThe lessee has a right to remove the goods as against the encumbrancer or owner. If the lessee’s right to remove terminates, the priority of the interest of the lessor continues for a reasonable time.6\n\nNotwithstanding subdivision (4) (a) of this section, but otherwise subject to subsections (4) and (5) of this section, the interest of a lessor of fixtures, including the lessor’s residual interest, is subordinate to the conflicting interest of an encumbrancer of the real estate under a construction mortgage recorded before the goods become fixtures if the goods become fixtures before the completion of the construction. To the extent given to refinance a construction mortgage, the conflicting interest of an encumbrancer of the real estate under a mortgage has this priority to the same extent as the encumbrancer of the real estate under the construction mortgage.7\n\nIn cases not within the preceding subsections, priority between the interest of a lessor of fixtures, including the lessor’s residual interest, and the conflicting interest of an encumbrancer or owner of the real estate who is not the lessee is determined by the priority rules governing conflicting interests in real estate.8\n\nIf the interest of a lessor of fixtures, including the lessor’s residual interest, has priority over all conflicting interests of all owners and encumbrancers of the real estate, the lessor or the lessee may (i) on default, expiration, termination, or cancellation of the lease agreement but subject to the lease agreement and this title, or (ii) if necessary to enforce other rights and remedies of the lessor or lessee under this title, remove the goods from the real estate, free and clear of all conflicting interests of all owners and encumbrancers of the real estate, but the lessor or lessee must reimburse any encumbrancer or owner of the real estate who is not the lessee and who has not otherwise agreed for the cost of repair of any physical injury, but not for any diminution in value of the real estate caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the party seeking removal gives adequate security for the performance of this obligation.9\n\nEven though the lease agreement does not create a security interest, the interest of a lessor of fixtures, including the lessor’s residual interest, is perfected by filing a financing statement as a fixture filing for leased goods that are or are to become fixtures in accordance with the relevant provisions of the title on secured transactions (Title 8.9A).","order_by":null,"text":{"0":{"id":274405,"text":"In this section:","type":"section","prefixes":["1"],"prefix":"1","entire_prefix":"1","prefix_anchor":"1","level":1,"next_prefix":"1a"},"1":{"id":274406,"text":"Goods are “fixtures” when they become so related to particular real estate that an interest in them arises under real estate law;","type":"section","prefixes":["1","a"],"prefix":"a","entire_prefix":"1a","prefix_anchor":"1a","level":2,"prior_prefix":"1","next_prefix":"1b"},"2":{"id":274407,"text":"A “fixture filing” is the filing, in the office where a record of a mortgage on the real estate would be filed or recorded, of a financing statement covering goods that are or are to become fixtures and conforming to the requirements of subdivisions (a) and (b) of § 8.9A-502;","type":"section","prefixes":["1","b"],"prefix":"b","entire_prefix":"1b","prefix_anchor":"1b","level":2,"prior_prefix":"1a","next_prefix":"1c"},"3":{"id":274408,"text":"A lease is a “purchase money lease” unless the lessee has possession or use of the goods or the right to possession or use of the goods before the lease agreement is enforceable;","type":"section","prefixes":["1","c"],"prefix":"c","entire_prefix":"1c","prefix_anchor":"1c","level":2,"prior_prefix":"1b","next_prefix":"1d"},"4":{"id":274409,"text":"A mortgage is a “construction mortgage” to the extent it secures an obligation incurred for the construction of an improvement on land including the acquisition cost of the land, if the recorded writing so indicates; and","type":"section","prefixes":["1","d"],"prefix":"d","entire_prefix":"1d","prefix_anchor":"1d","level":2,"prior_prefix":"1c","next_prefix":"1e"},"5":{"id":274410,"text":"“Encumbrance” includes real estate mortgages and other liens on real estate and all other rights in real estate that are not ownership interests.","type":"section","prefixes":["1","e"],"prefix":"e","entire_prefix":"1e","prefix_anchor":"1e","level":2,"prior_prefix":"1d","next_prefix":"2"},"6":{"id":274411,"text":"Under this title a lease may be of goods that are fixtures or may continue in goods that become fixtures, but no lease exists under this title of ordinary building materials incorporated into an improvement on land.","type":"section","prefixes":["2"],"prefix":"2","entire_prefix":"2","prefix_anchor":"2","level":1,"prior_prefix":"1e","next_prefix":"3"},"7":{"id":274412,"text":"This title does not prevent creation of a lease of fixtures pursuant to real estate law.","type":"section","prefixes":["3"],"prefix":"3","entire_prefix":"3","prefix_anchor":"3","level":1,"prior_prefix":"2","next_prefix":"4"},"8":{"id":274413,"text":"The perfected interest of a lessor of fixtures has priority over a conflicting interest of an encumbrancer or owner of the real estate if:","type":"section","prefixes":["4"],"prefix":"4","entire_prefix":"4","prefix_anchor":"4","level":1,"prior_prefix":"3","next_prefix":"4a"},"9":{"id":274414,"text":"The lease is a purchase money lease, the conflicting interest of the encumbrancer or owner arises before the goods become fixtures, the interest of the lessor is perfected by a fixture filing before the goods become fixtures or within ten days thereafter, and the lessee has an interest of record in the real estate or is in possession of the real estate; or","type":"section","prefixes":["4","a"],"prefix":"a","entire_prefix":"4a","prefix_anchor":"4a","level":2,"prior_prefix":"4","next_prefix":"4b"},"10":{"id":274415,"text":"The interest of the lessor is perfected by a fixture filing before the interest of the encumbrancer or owner is of record, the lessor’s interest has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner, and the lessee has an interest of record in the real estate or is in possession of the real estate.","type":"section","prefixes":["4","b"],"prefix":"b","entire_prefix":"4b","prefix_anchor":"4b","level":2,"prior_prefix":"4a","next_prefix":"5"},"11":{"id":274416,"text":"The interest of a lessor of fixtures, whether or not perfected, has priority over the conflicting interest of an encumbrancer or owner of the real estate if:","type":"section","prefixes":["5"],"prefix":"5","entire_prefix":"5","prefix_anchor":"5","level":1,"prior_prefix":"4b","next_prefix":"5a"},"12":{"id":274417,"text":"The fixtures are readily removable factory or office machines, readily removable equipment that is not primarily used or leased for use in the operation of the real estate, or readily removable replacements of domestic appliances that are goods subject to a consumer lease, and before the goods become fixtures the lease contract is enforceable;","type":"section","prefixes":["5","a"],"prefix":"a","entire_prefix":"5a","prefix_anchor":"5a","level":2,"prior_prefix":"5","next_prefix":"5b"},"13":{"id":274418,"text":"The conflicting interest is a lien on the real estate obtained by legal or equitable proceedings after the lease contract is enforceable;","type":"section","prefixes":["5","b"],"prefix":"b","entire_prefix":"5b","prefix_anchor":"5b","level":2,"prior_prefix":"5a","next_prefix":"5c"},"14":{"id":274419,"text":"The encumbrancer or owner has consented in writing to the lease or has disclaimed an interest in the goods as fixtures; or","type":"section","prefixes":["5","c"],"prefix":"c","entire_prefix":"5c","prefix_anchor":"5c","level":2,"prior_prefix":"5b","next_prefix":"5d"},"15":{"id":274420,"text":"The lessee has a right to remove the goods as against the encumbrancer or owner. If the lessee’s right to remove terminates, the priority of the interest of the lessor continues for a reasonable time.","type":"section","prefixes":["5","d"],"prefix":"d","entire_prefix":"5d","prefix_anchor":"5d","level":2,"prior_prefix":"5c","next_prefix":"6"},"16":{"id":274421,"text":"Notwithstanding subdivision (4) (a) of this section, but otherwise subject to subsections (4) and (5) of this section, the interest of a lessor of fixtures, including the lessor’s residual interest, is subordinate to the conflicting interest of an encumbrancer of the real estate under a construction mortgage recorded before the goods become fixtures if the goods become fixtures before the completion of the construction. To the extent given to refinance a construction mortgage, the conflicting interest of an encumbrancer of the real estate under a mortgage has this priority to the same extent as the encumbrancer of the real estate under the construction mortgage.","type":"section","prefixes":["6"],"prefix":"6","entire_prefix":"6","prefix_anchor":"6","level":1,"prior_prefix":"5d","next_prefix":"7"},"17":{"id":274422,"text":"In cases not within the preceding subsections, priority between the interest of a lessor of fixtures, including the lessor’s residual interest, and the conflicting interest of an encumbrancer or owner of the real estate who is not the lessee is determined by the priority rules governing conflicting interests in real estate.","type":"section","prefixes":["7"],"prefix":"7","entire_prefix":"7","prefix_anchor":"7","level":1,"prior_prefix":"6","next_prefix":"8"},"18":{"id":274423,"text":"If the interest of a lessor of fixtures, including the lessor’s residual interest, has priority over all conflicting interests of all owners and encumbrancers of the real estate, the lessor or the lessee may (i) on default, expiration, termination, or cancellation of the lease agreement but subject to the lease agreement and this title, or (ii) if necessary to enforce other rights and remedies of the lessor or lessee under this title, remove the goods from the real estate, free and clear of all conflicting interests of all owners and encumbrancers of the real estate, but the lessor or lessee must reimburse any encumbrancer or owner of the real estate who is not the lessee and who has not otherwise agreed for the cost of repair of any physical injury, but not for any diminution in value of the real estate caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the party seeking removal gives adequate security for the performance of this obligation.","type":"section","prefixes":["8"],"prefix":"8","entire_prefix":"8","prefix_anchor":"8","level":1,"prior_prefix":"7","next_prefix":"9"},"19":{"id":274424,"text":"Even though the lease agreement does not create a security interest, the interest of a lessor of fixtures, including the lessor’s residual interest, is perfected by filing a financing statement as a fixture filing for leased goods that are or are to become fixtures in accordance with the relevant provisions of the title on secured transactions (Title 8.9A).","type":"section","prefixes":["9"],"prefix":"9","entire_prefix":"9","prefix_anchor":"9","level":1,"prior_prefix":"8"}},"ancestry":[{"id":14808,"edition_id":1,"name":"Effect of Lease Contract","identifier":"3","label":"part","depth":2,"order_by":1,"parent_id":12736,"metadata":{},"date_created":"2026-06-26 03:50:03","date_modified":"2026-06-26 03:50:03","permalink":{"id":282493,"object_type":"structure","relational_id":14808,"identifier":"3","token":"8.2A\/3","url":"\/8.2A\/3\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12736,"edition_id":1,"name":"Commercial Code \u2014 Leases","identifier":"8.2A","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:50","date_modified":"2026-06-26 03:43:50","permalink":{"id":282367,"object_type":"structure","relational_id":12736,"identifier":"8.2A","token":"8.2A","url":"\/8.2A\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":68458,"structure_id":14808,"section_number":"8.2A-301","catch_line":"Enforceability of lease contract","url":"\/8.2A-301\/","token":"8.2A\/3\/8.2A-301","metadata":false},{"id":56636,"structure_id":14808,"section_number":"8.2A-302","catch_line":"Title to and possession of goods","url":"\/8.2A-302\/","token":"8.2A\/3\/8.2A-302","metadata":false},{"id":58906,"structure_id":14808,"section_number":"8.2A-303","catch_line":"Alienability of party's interest under lease contract or of lessor's residual interest in goods; delegation of performance; transfer of rights","url":"\/8.2A-303\/","token":"8.2A\/3\/8.2A-303","metadata":false},{"id":60750,"structure_id":14808,"section_number":"8.2A-304","catch_line":"Subsequent lease of goods by lessor","url":"\/8.2A-304\/","token":"8.2A\/3\/8.2A-304","metadata":false},{"id":71591,"structure_id":14808,"section_number":"8.2A-305","catch_line":"Sale or sublease of goods by lessee","url":"\/8.2A-305\/","token":"8.2A\/3\/8.2A-305","metadata":false},{"id":76970,"structure_id":14808,"section_number":"8.2A-306","catch_line":"Priority of certain liens arising by operation of law","url":"\/8.2A-306\/","token":"8.2A\/3\/8.2A-306","metadata":false},{"id":77642,"structure_id":14808,"section_number":"8.2A-307","catch_line":"Priority of liens arising by attachment or levy on, security interests in, and other claims to goods","url":"\/8.2A-307\/","token":"8.2A\/3\/8.2A-307","metadata":false},{"id":79922,"structure_id":14808,"section_number":"8.2A-308","catch_line":"Special rights of creditors","url":"\/8.2A-308\/","token":"8.2A\/3\/8.2A-308","metadata":false},{"id":76447,"structure_id":14808,"section_number":"8.2A-309","catch_line":"Lessor's and lessee's rights when goods become fixtures","url":"\/8.2A-309\/","token":"8.2A\/3\/8.2A-309","metadata":false},{"id":67646,"structure_id":14808,"section_number":"8.2A-310","catch_line":"Lessor's and lessee's rights when goods become accessions","url":"\/8.2A-310\/","token":"8.2A\/3\/8.2A-310","metadata":false},{"id":77068,"structure_id":14808,"section_number":"8.2A-311","catch_line":"Priority subject to subordination","url":"\/8.2A-311\/","token":"8.2A\/3\/8.2A-311","metadata":false}],"previous_section":{"id":79922,"structure_id":14808,"section_number":"8.2A-308","catch_line":"Special rights of creditors","url":"\/8.2A-308\/","token":"8.2A\/3\/8.2A-308","metadata":false},"next_section":{"id":67646,"structure_id":14808,"section_number":"8.2A-310","catch_line":"Lessor's and lessee's rights when goods become accessions","url":"\/8.2A-310\/","token":"8.2A\/3\/8.2A-310","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/8.2A-309\/","history_text":"

This law was first created in 1991. The record of its establishment is cataloged in chapter 536 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1991 \u201cActs\u201d aren\u2019t available online. It has been modified 1 time. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. That modification is as follows: in 2000, chapter 1007<\/a>.<\/p>","references":[{"id":86552,"section_number":"8.2A-103","catch_line":"Definitions and index of definitions","order_by":null,"url":"\/8.2A-103\/"}],"refers_to":[{"id":70542,"section_number":"8.9A-502","catch_line":"Contents of financing statement; record of mortgage as financing statement; time of filing financing statement","order_by":null,"url":"\/8.9A-502\/"}],"permalink":{"id":282527,"object_type":"law","relational_id":76447,"identifier":"8.2A-309","token":"8.2A\/3\/8.2A-309","url":"\/8.2A-309\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/8.2A-309\/","token":"8.2A\/3\/8.2A-309","dublin_core":{"Title":"Lessor’s and lessee’s rights when goods become fixtures","Type":"Text","Format":"text\/html","Identifier":"\u00a7 8.2A-309","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

1.<\/span> In this section: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

a.<\/span> Goods are “fixtures” when they become so related to particular real estate that an interest in them arises under real estate law<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

b.<\/span> A “fixture filing” is the filing, in the office where a record of a mortgage on the real estate would be filed or recorded, of a financing statement covering goods that are or are to become fixtures and conforming to the requirements of subdivisions (a) and (b) of § 8.9A-502<\/a>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

c.<\/span> A lease is a “purchase money lease” unless the lessee has possession<\/span> or use of the goods or the right to possession<\/span> or use of the goods before the lease agreement is enforceable; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

d.<\/span> A mortgage is a “construction mortgage” to the extent it secures an obligation incurred for the construction of an improvement on land including the acquisition cost of the land, if the recorded writing so indicates; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

e.<\/span> “Encumbrance<\/span>” includes real estate mortgages and other liens<\/span> on real estate and all other rights in real estate that are not ownership interests. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Under this title a lease may be of goods that are fixtures or may continue in goods that become fixtures, but no lease exists under this title of ordinary building materials<\/span> incorporated into an improvement on land. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> This title does not prevent creation of a lease of fixtures pursuant to real estate law<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> The perfected interest of a lessor of fixtures has priority over a conflicting interest of an encumbrancer or owner of the real estate if: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

a.<\/span> The lease is a purchase money lease, the conflicting interest of the encumbrancer or owner arises before the goods become fixtures, the interest of the lessor is perfected by a fixture filing before the goods become fixtures or within ten days thereafter, and the lessee has an interest of record in the real estate or is in possession<\/span> of the real estate; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

b.<\/span> The interest of the lessor is perfected by a fixture filing before the interest of the encumbrancer or owner is of record, the lessor’s interest has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner, and the lessee has an interest of record in the real estate or is in possession<\/span> of the real estate. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> The interest of a lessor of fixtures, whether or not perfected, has priority over the conflicting interest of an encumbrancer or owner of the real estate if: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

a.<\/span> The fixtures are readily removable factory or office machines, readily removable equipment that is not primarily used or leased for use in the operation of the real estate, or readily removable replacements of domestic appliances that are goods subject to a consumer lease, and before the goods become fixtures the lease contract<\/span> is enforceable; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

b.<\/span> The conflicting interest is a lien<\/span> on the real estate obtained by legal or equitable<\/span> proceedings after the lease contract<\/span> is enforceable; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

c.<\/span> The encumbrancer or owner has consented in writing to the lease or has disclaimed an interest in the goods as fixtures; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

d.<\/span> The lessee has a right to remove the goods as against the encumbrancer or owner. If the lessee’s right to remove terminates, the priority of the interest of the lessor continues for a reasonable time. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> Notwithstanding subdivision (4) (a) of this section, but otherwise subject to subsections (4) and (5) of this section, the interest of a lessor of fixtures, including the lessor’s residual interest, is subordinate to the conflicting interest of an encumbrancer of the real estate under a construction mortgage recorded before the goods become fixtures if the goods become fixtures before the completion of the construction. To the extent given to refinance a construction mortgage, the conflicting interest of an encumbrancer of the real estate under a mortgage has this priority to the same extent as the encumbrancer of the real estate under the construction mortgage. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> In cases not within the preceding subsections, priority between the interest of a lessor of fixtures, including the lessor’s residual interest, and the conflicting interest of an encumbrancer or owner of the real estate who is not the lessee is determined by the priority rules governing conflicting interests in real estate. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

8.<\/span> If the interest of a lessor of fixtures, including the lessor’s residual interest, has priority over all conflicting interests of all owners and encumbrancers of the real estate, the lessor or the lessee may (i) on default<\/span>, expiration, termination, or cancellation of the lease agreement but subject to the lease agreement and this title, or (ii) if necessary to enforce other rights and remedies of the lessor or lessee under this title, remove the goods from the real estate, free and clear of all conflicting interests of all owners and encumbrancers of the real estate, but the lessor or lessee must reimburse any encumbrancer or owner of the real estate who is not the lessee and who has not otherwise agreed for the cost of repair of any physical injury, but not for any diminution in value of the real estate caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the party<\/span> seeking removal gives adequate security for the performance of this obligation. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

9.<\/span> Even though the lease agreement does not create a security interest, the interest of a lessor of fixtures, including the lessor’s residual interest, is perfected by filing a financing statement as a fixture filing for leased goods that are or are to become fixtures in accordance with the relevant provisions of the title on secured transactions (Title 8.9A). <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nLESSOR’S AND LESSEE’S RIGHTS WHEN GOODS BECOME FIXTURES (\u00a7\n8.2A-309)\n\n1. In this section:\n\n a. Goods are “fixtures” when they become so related to particular\n real estate that an interest in them arises under real estate law;\n\n b. A “fixture filing” is the filing, in the office where a record\n of a mortgage on the real estate would be filed or recorded, of a financing\n statement covering goods that are or are to become fixtures and conforming to\n the requirements of subdivisions (a) and (b) of § 8.9A-502;\n\n c. A lease is a “purchase money lease” unless the lessee has\n possession or use of the goods or the right to possession or use of the goods\n before the lease agreement is enforceable;\n\n d. A mortgage is a “construction mortgage” to the extent it\n secures an obligation incurred for the construction of an improvement on land\n including the acquisition cost of the land, if the recorded writing so\n indicates; and\n\n e. “Encumbrance” includes real estate mortgages and other liens on\n real estate and all other rights in real estate that are not ownership\n interests.\n\n2. Under this title a lease may be of goods that are fixtures or may continue in\ngoods that become fixtures, but no lease exists under this title of ordinary\nbuilding materials incorporated into an improvement on land.\n\n3. This title does not prevent creation of a lease of fixtures pursuant to real\nestate law.\n\n4. The perfected interest of a lessor of fixtures has priority over a\nconflicting interest of an encumbrancer or owner of the real estate if:\n\n a. The lease is a purchase money lease, the conflicting interest of the\n encumbrancer or owner arises before the goods become fixtures, the interest of\n the lessor is perfected by a fixture filing before the goods become fixtures\n or within ten days thereafter, and the lessee has an interest of record in the\n real estate or is in possession of the real estate; or\n\n b. The interest of the lessor is perfected by a fixture filing before the\n interest of the encumbrancer or owner is of record, the lessor’s\n interest has priority over any conflicting interest of a predecessor in title\n of the encumbrancer or owner, and the lessee has an interest of record in the\n real estate or is in possession of the real estate.\n\n5. The interest of a lessor of fixtures, whether or not perfected, has priority\nover the conflicting interest of an encumbrancer or owner of the real estate if:\n\n a. The fixtures are readily removable factory or office machines, readily\n removable equipment that is not primarily used or leased for use in the\n operation of the real estate, or readily removable replacements of domestic\n appliances that are goods subject to a consumer lease, and before the goods\n become fixtures the lease contract is enforceable;\n\n b. The conflicting interest is a lien on the real estate obtained by legal or\n equitable proceedings after the lease contract is enforceable;\n\n c. The encumbrancer or owner has consented in writing to the lease or has\n disclaimed an interest in the goods as fixtures; or\n\n d. The lessee has a right to remove the goods as against the encumbrancer or\n owner. If the lessee’s right to remove terminates, the priority of the\n interest of the lessor continues for a reasonable time.\n\n6. Notwithstanding subdivision (4) (a) of this section, but otherwise subject to\nsubsections (4) and (5) of this section, the interest of a lessor of fixtures,\nincluding the lessor’s residual interest, is subordinate to the\nconflicting interest of an encumbrancer of the real estate under a construction\nmortgage recorded before the goods become fixtures if the goods become fixtures\nbefore the completion of the construction. To the extent given to refinance a\nconstruction mortgage, the conflicting interest of an encumbrancer of the real\nestate under a mortgage has this priority to the same extent as the encumbrancer\nof the real estate under the construction mortgage.\n\n7. In cases not within the preceding subsections, priority between the interest\nof a lessor of fixtures, including the lessor’s residual interest, and the\nconflicting interest of an encumbrancer or owner of the real estate who is not\nthe lessee is determined by the priority rules governing conflicting interests\nin real estate.\n\n8. If the interest of a lessor of fixtures, including the lessor’s\nresidual interest, has priority over all conflicting interests of all owners and\nencumbrancers of the real estate, the lessor or the lessee may (i) on default,\nexpiration, termination, or cancellation of the lease agreement but subject to\nthe lease agreement and this title, or (ii) if necessary to enforce other rights\nand remedies of the lessor or lessee under this title, remove the goods from the\nreal estate, free and clear of all conflicting interests of all owners and\nencumbrancers of the real estate, but the lessor or lessee must reimburse any\nencumbrancer or owner of the real estate who is not the lessee and who has not\notherwise agreed for the cost of repair of any physical injury, but not for any\ndiminution in value of the real estate caused by the absence of the goods\nremoved or by any necessity of replacing them. A person entitled to\nreimbursement may refuse permission to remove until the party seeking removal\ngives adequate security for the performance of this obligation.\n\n9. Even though the lease agreement does not create a security interest, the\ninterest of a lessor of fixtures, including the lessor’s residual\ninterest, is perfected by filing a financing statement as a fixture filing for\nleased goods that are or are to become fixtures in accordance with the relevant\nprovisions of the title on secured transactions (Title 8.9A).\n\nHISTORY: 1991, c. 536; 2000, c. 1007.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}