§ 25-2A-527. Lessor's rights to dispose of goods. - North Carolina Statutes

§ 25‑2A‑527. Lessor's rights to dispose of goods.

(1)        After a default bya lessee under the lease contract of the type described in G.S. 25‑2A‑523(1)or G.S. 25‑2A‑523(3)(a) or after the lessor refuses to deliver ortakes possession of goods (G.S. 25‑2A‑525 or G.S. 25‑2A‑526),or, if agreed, after other default by a lessee, the lessor may dispose of thegoods concerned or the undelivered balance thereof by lease, sale, orotherwise.

(2)        Except as otherwiseprovided with respect to damages liquidated in the lease agreement (G.S. 25‑2A‑504)or otherwise determined pursuant to agreement of the parties (G.S. 25‑1‑302and G.S. 25‑2A‑503), if the disposition is by lease agreementsubstantially similar to the original lease agreement and the new leaseagreement is made in good faith and in a commercially reasonable manner, thelessor may recover from the lessee as damages (i) accrued and unpaid rent as ofthe date of the commencement of the term of the new lease agreement, (ii) thepresent value, as of the same date, of the total rent for the then remaininglease term of the original lease agreement minus the present value, as of thesame date, of the rent under the new lease agreement applicable to that periodof the new lease term which is comparable to the then remaining term of theoriginal lease agreement, and (iii) any incidental damages allowed under G.S.25‑2A‑530, less expenses saved in consequence of the lessee'sdefault.

(3)        If the lessor'sdisposition is by lease agreement that for any reason does not qualify fortreatment under subsection (2) of this section, or is by sale or otherwise, thelessor may recover from the lessee as if the lessor had elected not to disposeof the goods and G.S. 25‑2A‑528 governs.

(4)        A subsequent buyeror lessee who buys or leases from the lessor in good faith for value as aresult of a disposition under this section takes the goods free of the originallease contract and any rights of the original lessee even though the lessorfails to comply with one or more of the requirements of this Article.

(5)        The lessor is notaccountable to the lessee for any profit made on any disposition. A lessee whohas rightfully rejected or justifiably revoked acceptance shall account to thelessor for any excess over the amount of the lessee's security interest (G.S.25‑2A‑508(5)). (1993, c. 463, s. 1; 2006‑112, s. 10.)