{"data":{"id":"us-ky/krs-355.9-407","jurisdiction":"us-ky","citation":"KRS 355.9-407","heading":"Restrictions on creation or enforcement of security interest in leasehold","body":"interest or in lessor's residual interest.\n(1) Except as otherwise provided in subsection (2) of this section, a term in a lease\nagreement is ineffective to the extent that it:\n(a) Prohibits, restricts, or requires the consent of a party to the lease to the\nassignment or transfer of, or the creation, attachment, perfection, or\nenforcement of a security interest in, an interest of a party under the lease\ncontract or in the lessor's residual interest in the goods; or\n(b) Provides that the assignment or transfer or the creation, attachment,\nperfection, or enforcement of the security interest may give rise to a default,\nbreach, right of recoupment, claim, defense, termination, right  of termination,\nor remedy under the lease.\n(2) Except as otherwise provided in KRS 355.2A -303(7), a term described in\nsubsection (1)(b) of this section is effective to the extent that there is:\n(a) A transfer by the lessee of the lessee's right of possess ion or use of the goods\nin violation of the term; or\n(b) A delegation of a material performance of either party to the lease contract in\nviolation of the term.\n(3) The creation, attachment, perfection, or enforcement of a security interest in the\nlessor's interest under the lease contract or the lessor's residual interest in the goods\nis not a transfer that materially impairs the lessee's prospect of obtaining return\nperformance or materially changes the duty of or materially increases the burden or\nrisk imposed on the lessee within the purview of KRS 355.2A -303(4) unless, and\nthen only to the extent that, enforcement actually results in a delegation of material\nperformance of the lessor.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33803","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:48Z","sha256":"2339a17f6eadc68e0176085bdd16d62f1a0e27282cf4794d2d8c6010a5fae571","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.9-406","next":"us-ky/krs-355.9-408"},"notice":"GroundRules: Original legal text. Not legal advice."}