554.13309 Lessor’s and lessee’s rights when goods become fixtures. 1. In this section:a. goods are 'fixtures' when they become so related to particular real estate that an interest in them arises under real estate law; b. 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 becomefixtures and conforming to the requirements of section 554.9502, subsections 1 and 2; c. 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; d. 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, ifthe recorded writing so indicates; and e. 'encumbrance' includes real estate mortgages and other liens on real estate and all other rights in real estate that are not ownership interests. 2. Under this Article a lease may be of goods that are fixtures or may continue in goods that become fixtures, but no lease exists under this r rights in real estate that are not ownership interests. 2. Under this Article a lease may be of goods that are fixtures or may continue in goods that become fixtures, but no lease exists under this Article of ordinary building materialsincorporated into an improvement on land. 3. This Article does not prevent creation of a lease of fixtures pursuant to real estate law.4. The perfected interest of a lessor of fixtures has priority over a conflicting interest of an encumbrancer or owner of the real estate if: a. 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 afixture filing before the goods become fixtures or within ten days thereafter, and the lesseehas an interest of record in the real estate or is in possession of the real estate; or b. 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 conflictinginterest of a predecessor in title of the encumbrancer or owner, and the lessee has an interestof record in the real estate or is in possession the lessor’s interest has priority over any conflictinginterest of a predecessor in title of the encumbrancer or owner, and the lessee has an interestof record in the real estate or is in possession of the real estate. 5. 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: a. 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, orreadily removable replacements of domestic appliances that are goods subject to a consumerlease, and before the goods become fixtures the lease contract is enforceable; or b. the conflicting interest is a lien on the real estate obtained by legal or equitable proceedings after the lease contract is enforceable; or c. the encumbrancer or owner has consented in writing to the lease or has disclaimed an interest in the goods as fixtures; or d. 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 fora reasonable or d. 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 fora reasonable time. 6. Notwithstanding subsection 4, paragraph 'a', but otherwise subject to subsections 4 and 5, the interest of a lessor of fixtures, including the lessor’s residual interest, is subordinateto the conflicting interest of an encumbrancer of the real estate under a construction mortgagerecorded before the goods become fixtures if the goods become fixtures before the completionof the construction. To the extent given to refinance a construction mortgage, the conflictinginterest of an encumbrancer of the real estate under a mortgage has this priority to the sameextent as the encumbrancer of the real estate under the construction mortgage. 7. In cases not within subsections 1 through 6, priority between the interest of a lessor of fixtures, including the lessor’s residual interest, and the conflicting interest of anencumbrancer or owner of the real estate who is not the lessee is determined by the priorityrules governing conflicting interests in real estate. 8. sidual interest, and the conflicting interest of anencumbrancer or owner of the real estate who is not the lessee is determined by the priorityrules governing conflicting interests in real estate. 8. 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 lessoror the lessee may on default, expiration, termination, or cancellation of the lease agreementbut subject to the lease agreement and this Article, or if necessary to enforce other rights and Sat Dec 23 11:03:19 2023 Iowa Code 2024, Section 554.13309 (28, 0) §554.13309, UNIFORM COMMERCIAL CODE 2 remedies of the lessor or lessee under this Article, 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 isnot 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 goodsremoved or by any necessity of replacing them. 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 goodsremoved or by any necessity of replacing them. A person entitled to reimbursement mayrefuse permission to remove until the party seeking removal gives adequate security for theperformance of this obligation. 9. 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 financingstatement as a fixture filing for leased goods that are or are to become fixtures in accordancewith the relevant provisions of the Article on Secured Transactions (Article 9). 94 Acts, ch 1052, §43; 2000 Acts, ch 1149, §159, 187; 2008 Acts, ch 1032, §82; 2013 Acts, ch 30, §261 Referred to in §554.13103 Sat Dec 23 11:03:19 2023 Iowa Code 2024, Section 554.13309 (28, 0)
Iowa Legal Code