{"data":{"id":"us-dc/d.c.-code-28-9-207","jurisdiction":"us-dc","citation":"D.C. Code § 28:9-207","heading":"Rights and duties of secured party having possession or control of collateral.","body":"(a)\nExcept as otherwise provided in subsection (d), a secured party shall use reasonable care in the custody and preservation of collateral in the secured party’s possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.\n\n(b)\nExcept as otherwise provided in subsection (d), if a secured party has possession of collateral:\n(1)\nReasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;\n(2)\nThe risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;\n(3)\nThe secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and\n(4)\nThe secured party may use or operate the collateral:\n(A)\nFor the purpose of preserving the collateral or its value;\n(B)\nAs permitted by an order of a court having competent jurisdiction; or\n(C)\nExcept in the case of consumer goods, in the manner and to the extent agreed by the debtor.\n\n(c)\nExcept as otherwise provided in subsection (d), a secured party having possession of collateral or control of collateral under § 28:7-106, § 28:9-104, § 28:9-105, § 28:9-105A, § 28:9-106, § 28:9-107, or § 28:9-107A:\n(1)\nMay hold as additional security any proceeds, except money or funds, received from the collateral;\n(2)\nShall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and\n(3)\nMay create a security interest in the collateral.\n\n(d)\nIf the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:\n(1)\nSubsection (a) does not apply unless the secured party is entitled under an agreement:\n(A)\nTo charge back uncollected collateral; or\n(B)\nOtherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and\n(2)\nSubsections (b) and (c) do not apply.","path":["Title 28. Commercial Instruments and Transactions. [Enacted title]","Subtitle I. Uniform Commercial Code.","Article 9. Secured Transactions.","Part II. Effectiveness of Security Agreement; Attachment of Security Interest; Rights of Parties to Security Agreement.","Subpart 2. Rights and Duties."],"source_url":"https://code.dccouncil.gov/us/dc/council/code/sections/28:9-207","current_through":"2026-08-20 (D.C. Law 26-175)","vintage":"","retrieved_at":"2026-08-29T05:44:07Z","sha256":"306d2891bbd23beac7dedce75e123c7092dce83d04c945c17c1a6fcfcc5f2c03","source_id":"us-dc","stale":false,"prev":"us-dc/d.c.-code-28-9-206","next":"us-dc/d.c.-code-28-9-208"},"notice":"GroundRules: Original legal text. Not legal advice."}