{"data":{"id":"us-ny/n.y.-uniform-commercial-code-law-9-407","jurisdiction":"us-ny","citation":"N.Y. Uniform Commercial Code Law § 9-407","heading":"Restrictions on Creation or Enforcement of Security Interest in Leasehold Interest or in Lessor's Residual Interest","body":"Section 9--407. Restrictions on Creation or Enforcement of Security\n                  Interest in Leasehold Interest or in Lessor's Residual\n                  Interest.\n  (a) Term restricting assignment generally ineffective. Except as\notherwise provided in subsection (b), a term in a lease agreement is\nineffective to the extent that it:\n       (1) prohibits, restricts, or requires the consent of a party to\n           the lease to the assignment or transfer of, or the creation,\n           attachment, perfection, or enforcement of a security interest\n           in, an interest of a party under the lease contract or in the\n           lessor's residual interest in the goods; or\n       (2) provides that the assignment or transfer or the creation,\n           attachment, perfection, or enforcement of the security\n           interest may give rise to a default, breach, right of\n           recoupment, claim, defense, termination, right of\n           termination, or remedy under the lease.\n  (b) Effectiveness of certain terms. Except as otherwise provided in\nSection 2-A-303(7), a term described in subsection (a)(2) is effective\nto the extent that there is:\n       (1) a transfer by the lessee of the lessee's right of possession\n           or use of the goods in violation of the term; or\n       (2) a delegation of a material performance of either party to the\n           lease contract in violation of the term.\n  (c) Security interest not material impairment. The creation,\nattachment, perfection, or enforcement of a security interest in the\nlessor's interest under the lease contract or the lessor's residual\ninterest in the goods is not a transfer that materially impairs the\nlessee's prospect of obtaining return performance or materially changes\nthe duty of or materially increases the burden or risk imposed on the\nlessee within the purview of Section 2-A-303(4) unless, and then only to\nthe extent that, enforcement actually results in a delegation of\nmaterial performance of the lessor.","path":["Uniform Commercial Code Law","Article 9. Secured Transactions","Part 4. Rights of Third Parties"],"source_url":"https://legislation.nysenate.gov/api/3/laws/UCC/9-407","current_through":"2026-09-11","vintage":"","retrieved_at":"2026-09-14T19:32:45Z","sha256":"ffcdb97ac29df07ad39ec53285834b1f89a4365906ff9e472d106422e806df62","source_id":"us-ny","stale":false,"prev":"us-ny/n.y.-uniform-commercial-code-law-9-406","next":"us-ny/n.y.-uniform-commercial-code-law-9-408"},"notice":"GroundRules: Original legal text. Not legal advice."}