{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/8.9A-407.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/8.9A-407.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/8.9A-407.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/8.9A-407.html"}],"law_id":86952,"edition_id":1,"section_id":86952,"structure_id":15875,"section_number":"8.9A-407","catch_line":"Restrictions on creation or enforcement of security interest in leasehold interest or in lessor’s residual interest","history":"1991, c. 536, \u00a7 8.2A-303; 2000, c. 1007.","full_text":"a\n\nTerm restricting assignment generally ineffective. Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:1\n\nprohibits, 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; or2\n\nprovides 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\n\nEffectiveness of certain terms. Except as otherwise provided in \u00a7 8.2A-303 (7), a term described in subsection (a) (2) is effective to the extent that there is:1\n\na transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term; or2\n\na delegation of a material performance of either party to the lease contract in violation of the term.c\n\nSecurity interest not material impairment. The creation, attachment, perfection, or enforcement of a security interest in the lessor’s interest under the lease contract or the lessor’s residual interest in the goods is not a transfer that materially impairs the lessee’s prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of § 8.2A-303 (4) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.","order_by":null,"text":{"0":{"id":311319,"text":"Term restricting assignment generally ineffective. Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:","type":"section","prefixes":["a"],"prefix":"a","entire_prefix":"a","prefix_anchor":"a","level":1,"next_prefix":"a1"},"1":{"id":311320,"text":"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","type":"section","prefixes":["a","1"],"prefix":"1","entire_prefix":"a1","prefix_anchor":"a1","level":2,"prior_prefix":"a","next_prefix":"a2"},"2":{"id":311321,"text":"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.","type":"section","prefixes":["a","2"],"prefix":"2","entire_prefix":"a2","prefix_anchor":"a2","level":2,"prior_prefix":"a1","next_prefix":"b"},"3":{"id":311322,"text":"Effectiveness of certain terms. Except as otherwise provided in \u00a7 8.2A-303 (7), a term described in subsection (a) (2) is effective to the extent that there is:","type":"section","prefixes":["b"],"prefix":"b","entire_prefix":"b","prefix_anchor":"b","level":1,"prior_prefix":"a2","next_prefix":"b1"},"4":{"id":311323,"text":"a transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term; or","type":"section","prefixes":["b","1"],"prefix":"1","entire_prefix":"b1","prefix_anchor":"b1","level":2,"prior_prefix":"b","next_prefix":"b2"},"5":{"id":311324,"text":"a delegation of a material performance of either party to the lease contract in violation of the term.","type":"section","prefixes":["b","2"],"prefix":"2","entire_prefix":"b2","prefix_anchor":"b2","level":2,"prior_prefix":"b1","next_prefix":"c"},"6":{"id":311325,"text":"Security interest not material impairment. The creation, attachment, perfection, or enforcement of a security interest in the lessor’s interest under the lease contract or the lessor’s residual interest in the goods is not a transfer that materially impairs the lessee’s prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of § 8.2A-303 (4) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.","type":"section","prefixes":["c"],"prefix":"c","entire_prefix":"c","prefix_anchor":"c","level":1,"prior_prefix":"b2"}},"ancestry":[{"id":15875,"edition_id":1,"name":"Rights of Third Parties","identifier":"4","label":"part","depth":2,"order_by":1,"parent_id":13277,"metadata":{},"date_created":"2026-06-26 04:00:59","date_modified":"2026-06-26 04:00:59","permalink":{"id":284137,"object_type":"structure","relational_id":15875,"identifier":"4","token":"8.9A\/4","url":"\/8.9A\/4\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13277,"edition_id":1,"name":"Commercial Code \u2014 Secured Transactions","identifier":"8.9A","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:44:33","date_modified":"2026-06-26 03:44:33","permalink":{"id":283833,"object_type":"structure","relational_id":13277,"identifier":"8.9A","token":"8.9A","url":"\/8.9A\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":61383,"structure_id":15875,"section_number":"8.9A-401","catch_line":"Alienability of debtor's rights","url":"\/8.9A-401\/","token":"8.9A\/4\/8.9A-401","metadata":false},{"id":74669,"structure_id":15875,"section_number":"8.9A-402","catch_line":"Secured party not obligated on contract of debtor or in tort","url":"\/8.9A-402\/","token":"8.9A\/4\/8.9A-402","metadata":false},{"id":81896,"structure_id":15875,"section_number":"8.9A-403","catch_line":"Agreement not to assert defenses against assignee","url":"\/8.9A-403\/","token":"8.9A\/4\/8.9A-403","metadata":false},{"id":67314,"structure_id":15875,"section_number":"8.9A-404","catch_line":"Rights acquired by assignee; claims and defenses against assignee","url":"\/8.9A-404\/","token":"8.9A\/4\/8.9A-404","metadata":false},{"id":78678,"structure_id":15875,"section_number":"8.9A-405","catch_line":"Modification of assigned contract","url":"\/8.9A-405\/","token":"8.9A\/4\/8.9A-405","metadata":false},{"id":78910,"structure_id":15875,"section_number":"8.9A-406","catch_line":"Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective","url":"\/8.9A-406\/","token":"8.9A\/4\/8.9A-406","metadata":false},{"id":86952,"structure_id":15875,"section_number":"8.9A-407","catch_line":"Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest","url":"\/8.9A-407\/","token":"8.9A\/4\/8.9A-407","metadata":false},{"id":86931,"structure_id":15875,"section_number":"8.9A-408","catch_line":"Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective","url":"\/8.9A-408\/","token":"8.9A\/4\/8.9A-408","metadata":false},{"id":75200,"structure_id":15875,"section_number":"8.9A-409","catch_line":"Restrictions on assignment of letter-of-credit rights ineffective","url":"\/8.9A-409\/","token":"8.9A\/4\/8.9A-409","metadata":false}],"previous_section":{"id":78910,"structure_id":15875,"section_number":"8.9A-406","catch_line":"Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective","url":"\/8.9A-406\/","token":"8.9A\/4\/8.9A-406","metadata":false},"next_section":{"id":86931,"structure_id":15875,"section_number":"8.9A-408","catch_line":"Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective","url":"\/8.9A-408\/","token":"8.9A\/4\/8.9A-408","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/8.9A-407\/","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":58906,"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","order_by":null,"url":"\/8.2A-303\/"},{"id":78910,"section_number":"8.9A-406","catch_line":"Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective","order_by":null,"url":"\/8.9A-406\/"}],"refers_to":[{"id":58906,"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","order_by":null,"url":"\/8.2A-303\/"}],"permalink":{"id":284163,"object_type":"law","relational_id":86952,"identifier":"8.9A-407","token":"8.9A\/4\/8.9A-407","url":"\/8.9A-407\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/8.9A-407\/","token":"8.9A\/4\/8.9A-407","dublin_core":{"Title":"Restrictions on creation or enforcement of security interest in leasehold interest or in lessor’s residual interest","Type":"Text","Format":"text\/html","Identifier":"\u00a7 8.9A-407","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

a.<\/span> Term restricting assignment generally ineffective. Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> prohibits, restricts, or requires the consent of a party<\/span> to the lease to the assignment or transfer of, or the creation, attachment<\/span>, perfection, or enforcement of a security interest in, an interest of a party<\/span> under the lease contract<\/span> or in the lessor’s residual interest in the goods; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> provides that the assignment or transfer or the creation, attachment<\/span>, perfection, or enforcement of the security interest may give rise to a default<\/span>, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

b.<\/span> Effectiveness of certain terms. Except as otherwise provided in \u00a7 8.2A-303<\/a> (7), a term described in subsection (a) (2) is effective to the extent that there is: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> a transfer by the lessee of the lessee’s right of possession<\/span> or use of the goods in violation of the term; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> a delegation of a material<\/span> performance of either party<\/span> to the lease contract<\/span> in violation of the term. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

c.<\/span> Security interest not material<\/span> impairment. The creation, attachment<\/span>, perfection, or enforcement of a security interest in the lessor’s interest under the lease contract<\/span> or the lessor’s residual interest in the goods is not a transfer that materially impairs the lessee’s prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of § 8.2A-303<\/a> (4) unless, and then only to the extent that, enforcement actually results in a delegation of material<\/span> performance of the lessor. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nRESTRICTIONS ON CREATION OR ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD\nINTEREST OR IN LESSOR’S RESIDUAL INTEREST (\u00a7 8.9A-407)\n\na. Term restricting assignment generally ineffective. Except as otherwise\nprovided in subsection (b), a term in a lease agreement is ineffective to the\nextent that it:\n\n 1. prohibits, restricts, or requires the consent of a party to the lease to\n the assignment or transfer of, or the creation, attachment, perfection, or\n enforcement of a security interest in, an interest of a party under the lease\n contract or in the lessor’s residual interest in the goods; or\n\n 2. provides that the assignment or transfer or the creation, attachment,\n perfection, or enforcement of the security interest may give rise to a\n default, breach, right of recoupment, claim, defense, termination, right of\n termination, or remedy under the lease.\n\nb. Effectiveness of certain terms. Except as otherwise provided in \u00a7 8.2A-303\n(7), a term described in subsection (a) (2) is effective to the extent that\nthere is:\n\n 1. a transfer by the lessee of the lessee’s right of possession or use\n of the goods in violation of the term; or\n\n 2. a delegation of a material performance of either party to the lease\n contract in violation of the term.\n\nc. Security interest not material impairment. The creation, attachment,\nperfection, or enforcement of a security interest in the lessor’s interest\nunder the lease contract or the lessor’s residual interest in the goods is\nnot a transfer that materially impairs the lessee’s prospect of obtaining\nreturn performance or materially changes the duty of or materially increases the\nburden or risk imposed on the lessee within the purview of § 8.2A-303 (4)\nunless, and then only to the extent that, enforcement actually results in a\ndelegation of material performance of the lessor.\n\nHISTORY: 1991, c. 536, \u00a7 8.2A-303; 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}}