Print Friendly SENATE BILL NO. 1013 – Uniform Assignment of Rents Act
SENATE BILL NO. 1013
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S1013................................................by JUDICIARY AND RULES
UNIFORM ASSIGNMENT OF RENTS - Adds to existing law to set forth the
"Uniform Assignment of Rents Act"; to define terms; to provide for
notification; to provide for the creation of assignment of rents and
security interests; to provide for recordation, perfection of security
interests and priority of conflicting interests; to provide for enforcement
of security interests by appointment of receiver or notification to
assignor or tenant; to provide for the application of proceeds; to provide
for the turnover of rents, commingling and identifiability of rents and
liability of assignor; to provide for perfection and priority of security
interests; to allow subordination; to provide for uniformity; to provide
for relation to federal law; and to set forth application to existing
01/16 Senate intro - 1st rdg - to printing
01/17 Rpt prt - to Jud
01/25 Rpt out - rec d/p - to 2nd rdg
01/26 2nd rdg - to 3rd rdg
02/01 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai, McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- None
Floor Sponsor - Davis
Title apvd - to House
02/02 House intro - 1st rdg - to Jud
03/02 Rpt out - rec d/p - to 2nd rdg
03/05 2nd rdg - to 3rd rdg
Ret'd to Jud
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE SENATE
SENATE BILL NO. 1013
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO THE UNIFORM ASSIGNMENT OF RENTS ACT; AMENDING TITLE 55, IDAHO
3 CODE, BY THE ADDITION OF A NEW CHAPTER 31, TITLE 55, IDAHO CODE, TO PRO-
4 VIDE A SHORT TITLE, TO DEFINE TERMS, TO PROVIDE FOR NOTIFICATION, TO PRO-
5 VIDE FOR THE CREATION OF ASSIGNMENT OF RENTS AND SECURITY INTERESTS, TO
6 PROVIDE FOR RECORDATION, PERFECTION OF SECURITY INTERESTS AND PRIORITY OF
7 CONFLICTING INTERESTS, TO PROVIDE FOR ENFORCEMENT OF SECURITY INTEREST IN
8 RENTS, TO PROVIDE FOR ENFORCEMENT BY APPOINTMENT OF RECEIVER, TO PROVIDE
9 FOR ENFORCEMENT BY NOTIFICATION TO ASSIGNOR OR TENANT, TO SET FORTH SATIS-
10 FACTORY FORM OF NOTIFICATION TO TENANT, TO PROVIDE FOR EFFECT OF ENFORCE-
11 MENT, TO PROVIDE FOR APPLICATION OF PROCEEDS, TO PROVIDE FOR THE APPLICA-
12 TION OF PROCEEDS TO PAYMENT OF EXPENSES OF PROTECTING REAL PROPERTY, TO
13 SET FORTH CLAIMS AND DEFENSES OF TENANT, TO PROVIDE FOR TURNOVER OF RENTS,
14 COMMINGLING AND IDENTIFIABILITY OF RENTS AND LIABILITY OF ASSIGNOR, TO
15 PROVIDE FOR THE PERFECTION AND PRIORITY OF ASSIGNEE'S SECURITY INTEREST IN
16 PROCEEDS, TO PROVIDE THAT PRIORITY IS SUBJECT TO SUBORDINATION, TO PROVIDE
17 FOR UNIFORMITY OF APPLICATION AND CONSTRUCTION, TO PROVIDE FOR RELATION OF
18 ACT TO THE ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT AND
19 TO SET FORTH APPLICATION TO EXISTING RELATIONSHIPS.
20 Be It Enacted by the Legislature of the State of Idaho:
21 SECTION 1. That Title 55, Idaho Code, be, and the same is hereby amended
22 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
23 ter 31, Title 55, Idaho Code, and to read as follows:
24 CHAPTER 31
25 UNIFORM ASSIGNMENT OF RENTS ACT
26 55-3101. SHORT TITLE. This chapter shall be known and may be cited as the
27 "Uniform Assignment of Rents Act."
28 55-3102. DEFINITIONS. As used in this chapter:
29 (1) "Assignee" means a person entitled to enforce an assignment of rents.
30 (2) "Assignment of rents" means a transfer of an interest in rents in
31 connection with an obligation secured by real property located in this state
32 and from which the rents arise.
33 (3) "Assignor" means a person that makes an assignment of rents or the
34 successor owner of the real property from which the rents arise.
35 (4) "Cash proceeds" means proceeds that are money, checks, deposit
36 accounts, or the like.
37 (5) "Day" means calendar day.
38 (6) "Deposit account" means a demand, time, savings, passbook, or similar
39 account maintained with a bank, savings bank, savings and loan association,
40 credit union, or trust company.
41 (7) "Document" means information that is inscribed on a tangible medium
1 or that is stored on an electronic or other medium and is retrievable in
2 perceivable form.
3 (8) "Notification" means a document containing information that this
4 chapter requires a person to provide to another, signed by the person required
5 to provide the information.
6 (9) "Person" means an individual, corporation, business trust, estate,
7 trust, partnership, limited liability company, association, joint venture,
8 public corporation, government, or governmental subdivision, agency, or
9 instrumentality, or any other legal or commercial entity.
10 (10) "Proceeds" means personal property that is received or collected on
11 account of a tenant's obligation to pay rents.
12 (11) "Purchase" means to take by sale, lease, discount, negotiation, mort-
13 gage, pledge, lien, security interest, issue or reissue, gift, or any other
14 voluntary transaction creating an interest in property.
15 (12) "Rents" means:
16 (a) Sums payable for the right to possess or occupy, or for the actual
17 possession or occupation of, real property of another person;
18 (b) Sums payable to an assignor under a policy of rental interruption
19 insurance covering real property;
20 (c) Claims arising out of a default in the payment of sums payable for
21 the right to possess or occupy real property of another person;
22 (d) Sums payable to terminate an agreement to possess or occupy real
23 property of another person;
24 (e) Sums payable to an assignor for payment or reimbursement of expenses
25 incurred in owning, operating and maintaining, or constructing or install-
26 ing improvements on, real property; or
27 (f) Any other sums payable under an agreement relating to the real prop-
28 erty of another person that constitute rents under law of this state other
29 than this chapter.
30 (13) "Secured obligation" means an obligation the performance of which is
31 secured by an assignment of rents.
32 (14) "Security instrument" means a document, however denominated, that
33 creates or provides for a security interest in real property, whether or not
34 it also creates or provides for a security interest in personal property.
35 (15) "Security interest" means an interest in property that arises by
36 agreement and secures performance of an obligation.
37 (16) "Sign" means, with present intent to authenticate or adopt a docu-
39 (a) To execute or adopt a tangible symbol; or
40 (b) To attach to or logically associate with the document an electronic
41 sound, symbol, or process.
42 (17) "State" means a state of the United States, the District of Columbia,
43 Puerto Rico, the United States Virgin Islands, or any territory or insular
44 possession subject to the jurisdiction of the United States.
45 (18) "Submit for recording" means to submit a document complying with
46 applicable legal standards, with required fees and taxes, to the office of the
47 recorder in each county wherein the real property described in the document is
49 (19) "Tenant" means a person that has an obligation to pay sums for the
50 right to possess or occupy, or for possessing or occupying, the real property
51 of another person.
52 55-3103. MANNER OF GIVING NOTIFICATION. (1) Except as otherwise provided
53 in subsections (3) and (4) of this section, a person gives a notification or a
54 copy of a notification under this chapter:
1 (a) By depositing it with the United States postal service or with a com-
2 mercially reasonable delivery service, properly addressed to the intended
3 recipient's address as specified in subsection (2) of this section, with
4 first-class postage or cost of delivery provided for; or
5 (b) If the recipient agreed to receive notification by facsimile trans-
6 mission, electronic mail, or other electronic transmission, by sending it
7 to the recipient in the agreed manner at the address specified in the
9 (2) The following rules determine the proper address for giving a notifi-
10 cation under subsection (1) of this section:
11 (a) A person giving a notification to an assignee shall use the address
12 for notices to the assignee provided in the document creating the assign-
13 ment of rents, but, if the assignee has provided the person giving the
14 notification with a more recent address for notices, the person giving the
15 notification shall use that address.
16 (b) A person giving a notification to an assignor shall use the address
17 for notices to the assignor provided in the document creating the assign-
18 ment of rents, but, if the assignor has provided the person giving the
19 notification with a more recent address for notices, the person giving the
20 notification shall use that address.
21 (c) If a tenant's agreement with an assignor provides an address for
22 notices to the tenant and the person giving notification has received a
23 copy of the agreement or knows the address for notices specified in the
24 agreement, the person giving the notification shall use that address in
25 giving a notification to the tenant. Otherwise, the person shall use the
26 address of the premises covered by the agreement.
27 (3) If a person giving a notification pursuant to this chapter and the
28 recipient have agreed to the method for giving a notification, any notifica-
29 tion must be given by that method.
30 (4) If a notification is received by the recipient, it is effective even
31 if it was not given in accordance with subsection (1) or (3) of this section.
32 55-3104. SECURITY INSTRUMENT CREATES ASSIGNMENT OF RENTS -- ASSIGNMENT OF
33 RENTS CREATES SECURITY INTEREST. (1) An enforceable security instrument cre-
34 ates an assignment of rents arising from the real property described in the
35 security instrument, unless the security instrument provides otherwise.
36 (2) An assignment of rents creates a presently effective security inter-
37 est in all accrued and unaccrued rents arising from the real property
38 described in the document creating the assignment, regardless of whether the
39 document is in the form of an absolute assignment, an absolute assignment con-
40 ditioned upon default, an assignment as additional security, or any other
41 form. The security interest in rents is separate and distinct from any secu-
42 rity interest held by the assignee in the real property.
43 55-3105. RECORDATION -- PERFECTION OF SECURITY INTEREST IN RENTS -- PRI-
44 ORITY OF CONFLICTING INTERESTS IN RENTS. (1) A document creating an assign-
45 ment of rents may be submitted for recording in the office of the recorder in
46 each county wherein the real property described in the document is situated in
47 the same manner as any other document evidencing a conveyance of an interest
48 in real property.
49 (2) Upon recording, the security interest in rents created by an assign-
50 ment of rents is fully perfected, even if a provision of the document creating
51 the assignment or law of this state other than this chapter would preclude or
52 defer enforcement of the security interest until the occurrence of a subse-
53 quent event, including a subsequent default of the assignor, the assignee's
1 obtaining possession of the real property, or the appointment of a receiver.
2 (3) Except as otherwise provided in subsection (4) of this section, a
3 perfected security interest in rents takes priority over the rights of a per-
4 son that, after the security interest is perfected:
5 (a) Acquires a judicial lien against the rents or the real property from
6 which the rents arise; or
7 (b) Purchases an interest in the rents or the real property from which
8 the rents arise.
9 (4) A perfected security interest in rents has priority over the rights
10 of a person described in subsection (3) of this section with respect to future
11 advances to the same extent as the assignee's security interest in the real
12 property has priority over the rights of that person with respect to future
14 55-3106. ENFORCEMENT OF SECURITY INTEREST IN RENTS. (1) An assignee may
15 enforce an assignment of rents using one (1) or more of the methods specified
16 in sections 55-3107, 55-3108 and 55-3109, Idaho Code, or any other method suf-
17 ficient to enforce the assignment under law of this state other than this
19 (2) From the date of enforcement, the assignee or, in the case of
20 enforcement by appointment of a receiver under section 55-3107, Idaho Code,
21 the receiver, is entitled to collect all rents that:
22 (a) Have accrued but remain unpaid on that date; and
23 (b) Accrue on or after that date, as those rents accrue.
24 55-3107. ENFORCEMENT BY APPOINTMENT OF RECEIVER. (1) An assignee is enti-
25 tled to the appointment of a receiver for the real property subject to the
26 assignment of rents if:
27 (a) The assignor is in default and:
28 (i) The assignor has agreed in a signed document to the appointment
29 of a receiver in the event of the assignor's default;
30 (ii) It appears likely that the real property may not be sufficient
31 to satisfy the secured obligation;
32 (iii) The assignor has failed to turn over to the assignee proceeds
33 that the assignee was entitled to collect; or
34 (iv) A subordinate assignee of rents obtains the appointment of a
35 receiver for the real property; or
36 (b) Other circumstances exist that would justify the appointment of a
37 receiver under law of this state other than this chapter.
38 (2) An assignee may file a petition for the appointment of a receiver in
39 connection with an action:
40 (a) To foreclose the security instrument;
41 (b) For specific performance of the assignment;
42 (c) Seeking a remedy on account of waste or threatened waste of the real
43 property subject to the assignment; or
44 (d) Otherwise to enforce the secured obligation or the assignee's reme-
45 dies arising from the assignment.
46 (3) An assignee that files a petition under subsection (2) of this sec-
47 tion shall also give a copy of the petition in the manner specified in section
48 55-3103, Idaho Code, to any other person that, ten (10) days before the date
49 the petition is filed, held a recorded assignment of rents arising from the
50 real property.
51 (4) If an assignee enforces an assignment of rents under this section,
52 the date of enforcement is the date on which the court enters an order
53 appointing a receiver for the real property subject to the assignment.
1 (5) From the date of its appointment, a receiver is entitled to collect
2 rents as provided in section 55-3106(2), Idaho Code. The receiver also has the
3 authority provided in the order of appointment and law of this state other
4 than this chapter.
5 (6) The following rules govern priority among receivers:
6 (a) If more than one (1) assignee qualifies under this section for the
7 appointment of a receiver, a receivership requested by an assignee enti-
8 tled to priority in rents under this chapter has priority over a receiver-
9 ship requested by a subordinate assignee, even if a court has previously
10 appointed a receiver for the subordinate assignee.
11 (b) If a subordinate assignee obtains the appointment of a receiver, the
12 receiver may collect the rents and apply the proceeds in the manner speci-
13 fied in the order appointing the receiver until a receiver is appointed
14 under a senior assignment of rents.
15 55-3108. ENFORCEMENT BY NOTIFICATION TO ASSIGNOR. (1) Upon the assignor's
16 default, or as otherwise agreed by the assignor, the assignee may give the
17 assignor a notification demanding that the assignor pay over the proceeds of
18 any rents that the assignee is entitled to collect under section 55-3106,
19 Idaho Code. The assignee shall also give a copy of the notification to any
20 other person that, ten (10) days before the notification date, held a recorded
21 assignment of rents arising from the real property.
22 (2) If an assignee enforces an assignment of rents under this section,
23 the date of enforcement is the date on which the assignor receives a notifica-
24 tion under subsection (1) of this section.
25 (3) An assignee's failure to give a notification under subsection (1) of
26 this section to any person holding a recorded assignment of rents does not
27 affect the effectiveness of the notification as to the assignor, but the other
28 person is entitled to any relief permitted under law of this state other than
29 this chapter.
30 (4) An assignee that holds a security interest in rents solely by virtue
31 of section 55-3104(1), Idaho Code, may not enforce the security interest under
32 this section while the assignor occupies the real property as the assignor's
33 primary residence.
34 55-3109. ENFORCEMENT BY NOTIFICATION TO TENANT. (1) Upon the assignor's
35 default, or as otherwise agreed by the assignor, the assignee may give to a
36 tenant of the real property a notification demanding that the tenant pay to
37 the assignee all unpaid accrued rents and all unaccrued rents as they accrue.
38 The assignee shall give a copy of the notification to the assignor and to any
39 other person that, ten (10) days before the notification date, held a recorded
40 assignment of rents arising from the real property. The notification must be
41 signed by assignee and:
42 (a) Identify the tenant, assignor, assignee, premises covered by the
43 agreement between the tenant and the assignor, and assignment of rents
44 being enforced;
45 (b) Provide the recording data for the document creating the assignment
46 or other reasonable proof that the assignment was made;
47 (c) State that the assignee has the right to collect rents in accordance
48 with the assignment;
49 (d) Direct the tenant to pay to the assignee all unpaid accrued rents and
50 all unaccrued rents as they accrue;
51 (e) Describe the manner in which subsections (3) and (4) of this section
52 affect the tenant's payment obligations;
53 (f) Provide the name and telephone number of a contact person and an
1 address to which the tenant can direct payment of rents and any inquiry
2 for additional information about the assignment or the assignee's right to
3 enforce the assignment; and
4 (g) Contain a statement that the tenant may consult a lawyer if the ten-
5 ant has questions about its rights and obligations.
6 (2) If an assignee enforces an assignment of rents under this section,
7 the date of enforcement is the date on which the tenant receives a notifica-
8 tion substantially complying with subsection (1) of this section.
9 (3) Subject to the provisions of subsection (4) of this section and any
10 other claim or defense that a tenant has under law of this state other than
11 this chapter, following receipt of a notification substantially complying with
12 the provisions of subsection (1) of this section:
13 (a) A tenant is obligated to pay to the assignee all unpaid accrued rents
14 and all unaccrued rents as they accrue, unless the tenant has previously
15 received a notification from another assignee of rents given by that
16 assignee in accordance with this section and the other assignee has not
17 canceled that notification;
18 (b) Unless the tenant occupies the premises as the tenant's primary resi-
19 dence, a tenant that pays rents to the assignor is not discharged from the
20 obligation to pay rents to the assignee;
21 (c) A tenant's payment to the assignee of rents then due satisfies the
22 tenant's obligation under the tenant's agreement with the assignor to the
23 extent of the payment made; and
24 (d) A tenant's obligation to pay rents to the assignee continues until
25 the tenant receives a court order directing the tenant to pay the rent in
26 a different manner or a signed document from the assignee canceling its
27 notification, whichever occurs first.
28 (4) A tenant that has received a notification under subsection (1) of
29 this section is not in default for nonpayment of rents accruing within thirty
30 (30) days after the date the notification is received before the earlier of:
31 (a) Ten (10) days after the date the next regularly scheduled rental pay-
32 ment would be due; or
33 (b) Thirty (30) days after the date the tenant receives the notification.
34 (5) Upon receiving a notification from another creditor that is entitled
35 to priority under section 55-3105(3), Idaho Code, that the other creditor has
36 enforced and is continuing to enforce its interest in rents, an assignee that
37 has given a notification to a tenant under subsection (1) of this section
38 shall immediately give another notification to the tenant canceling the ear-
39 lier notification.
40 (6) An assignee's failure to give a notification under subsection (1) of
41 this section to any person holding a recorded assignment of rents does not
42 affect the effectiveness of the notification as to the assignor and those ten-
43 ants receiving the notification. However, the person entitled to the notifica-
44 tion is entitled to any relief permitted by law of this state other than this
46 (7) An assignee that holds a security interest in rents solely by virtue
47 of section 55-3104(1), Idaho Code, may not enforce the security interest under
48 this section while the assignor occupies the real property as the assignor's
49 primary residence.
50 55-3110. NOTIFICATION TO TENANT -- FORM. No particular phrasing is
51 required for the notification specified in section 55-3109, Idaho Code. How-
52 ever, the following form of notification, when properly completed, is suffi-
53 cient to satisfy the requirements of section 55-3109, Idaho Code:
1 "NOTIFICATION TO PAY RENTS TO PERSON OTHER THAN LANDLORD
3 Name of Tenant
4 Property Occupied by Tenant (the "Premises"):........................
7 Name of Landlord
9 Name of Assignee
10 Address of Assignee and Telephone Number of Contact Person:
12 Address of Assignee
14 Telephone number of person to contact
15 1. The Assignee named above has become the person entitled to
16 collect your rents on the Premises listed above under
17 ...........(Name of Document)...........
18 (the "Assignment of Rents") dated ......(Date)......, and recorded at
19 ......(Recording Data)......
20 in the Office of the Recorder of .......... County on ....... as
21 Instrument No. .....
22 You may obtain additional information about the Assignment of Rents
23 and the Assignee's right to enforce it at the address listed above.
24 2. The Landlord is in default under the Assignment of Rents.
25 Under the Assignment of Rents, the Assignee is entitled to collect
26 rents from the Premises.
27 3. This notification affects your rights and obligations under
28 the agreement under which you occupy the Premises (your "Agreement").
29 In order to provide you with an opportunity to consult with a lawyer,
30 if your next scheduled rental payment is due within 30 days after you
31 receive this notification, neither the Assignee nor the Landlord can
32 hold you in default under your Agreement for nonpayment of that
33 rental payment until 10 days after the due date of that payment or 30
34 days following the date you receive this notification, whichever
35 occurs first. You may consult a lawyer at your expense concerning
36 your rights and obligations under your Agreement and the effect of
37 this notification.
38 4. You must pay to the Assignee at the address listed above
39 all rents under your Agreement which are due and payable on the date
40 you receive this notification and all rents accruing under your
41 Agreement after you receive this notification. If you pay rents to
42 the Assignee after receiving this notification, the payment will sat-
43 isfy your rental obligation to the extent of that payment.
44 5. Unless you occupy the Premises as your primary residence,
45 if you pay any rents to the Landlord after receiving this notifica-
46 tion, your payment to the Landlord will not discharge your rental
47 obligation, and the Assignee may hold you liable for that rental
48 obligation notwithstanding your payment to the Landlord.
49 6. If you have previously received a notification from another
50 person that also holds an assignment of the rents due under your
51 Agreement, you should continue paying your rents to the person that
52 sent that notification until that person cancels that notification.
53 Once that notification is canceled, you must begin paying rents to
54 the Assignee in accordance with this notification.
55 7. Your obligation to pay rents to the Assignee will continue
1 until you receive either:
2 (a) a written order from a court directing you to pay the
3 rent in a manner specified in that order; or
4 (b) written instructions from the Assignee canceling this
7 Name of Assignee
9 By: Officer/Authorized Agent of Assignee."
10 55-3111. EFFECT OF ENFORCEMENT. The enforcement of an assignment of
11 rents by one (1) or more of the methods identified in sections 55-3107,
12 55-3108 and 55-3109, Idaho Code, the application of proceeds by the
13 assignee under section 55-3112, Idaho Code, after enforcement, the pay-
14 ment of expenses under section 55-3113, Idaho Code, or an action under
15 section 55-3114(4), Idaho Code, does not:
16 (1) Make the assignee a mortgagee in possession of the real prop-
18 (2) Make the assignee an agent of the assignor;
19 (3) Constitute an election of remedies that precludes a later action
20 to enforce the secured obligation;
21 (4) Make the secured obligation unenforceable;
22 (5) Limit any right available to the assignee with respect to the
23 secured obligation;
24 (6) Violate section 6-101, Idaho Code; or
25 (7) Bar a deficiency judgment pursuant to any law of this state gov-
26 erning or relating to deficiency judgments following the enforcement of
27 any encumbrance, lien, or security interest.
28 55-3112. APPLICATION OF PROCEEDS. Unless otherwise agreed, an
29 assignee that collects rents under this chapter or collects upon a judg-
30 ment in an action under section 55-3114(4), Idaho Code, shall apply the
31 sums collected in the following order to:
32 (1) The assignee's reasonable expenses of enforcing its assignment
33 of rents, including, to the extent provided for by agreement and not pro-
34 hibited by law of this state other than this chapter, reasonable attor-
35 ney's fees and costs incurred by the assignee;
36 (2) Reimbursement of any expenses incurred by the assignee to pro-
37 tect or maintain the real property subject to the assignment;
38 (3) Payment of the secured obligation;
39 (4) Payment of any obligation secured by a subordinate security
40 interest or other lien on the rents if, before distribution of the pro-
41 ceeds, the assignor and assignee receive a notification from the holder
42 of the interest or lien demanding payment of the proceeds; and
43 (5) The assignor.
44 55-3113. APPLICATION OF PROCEEDS TO PAYMENT OF EXPENSES OF PROTECT-
45 ING REAL PROPERTY -- CLAIMS AND DEFENSES OF TENANT. (1) Unless otherwise
46 agreed by the assignee, and subject to subsection (3) of this section, an
47 assignee that collects rents following enforcement under section 55-3108
48 or 55-3109, Idaho Code, need not apply them to the payment of expenses of
49 protecting or maintaining the real property subject to the assignment.
50 (2) Unless a tenant has made an enforceable agreement not to assert
1 claims or defenses, the right of the assignee to collect rents from the
2 tenant is subject to the terms of the agreement between the assignor and
3 tenant and any claim or defense arising from the assignor's nonperfor-
4 mance of that agreement.
5 (3) This chapter does not limit the standing or right of a tenant to
6 request a court to appoint a receiver for the real property subject to
7 the assignment or to seek other relief on the ground that the assignee's
8 nonpayment of expenses of protecting or maintaining the real property has
9 caused or threatened harm to the tenant's interest in the property.
10 Whether the tenant is entitled to the appointment of a receiver or other
11 relief is governed by law of this state other than this chapter.
12 55-3114. TURNOVER OF RENTS -- COMMINGLING AND IDENTIFIABILITY OF
13 RENTS -- LIABILITY OF ASSIGNOR. (1) In this section, "good faith" means
14 honesty in fact and the observance of reasonable commercial standards of
15 fair dealing.
16 (2) If an assignor collects rents that the assignee is entitled to
17 collect under this chapter:
18 (a) The assignor shall turn over the proceeds to the assignee, less
19 any amount representing payment of expenses authorized by the
20 assignee; and
21 (b) The assignee continues to have a security interest in the pro-
22 ceeds so long as they are identifiable.
23 (3) For purposes of this chapter, cash proceeds are identifiable if
24 they are maintained in a segregated account or, if commingled with other
25 funds, to the extent the assignee can identify them by a method of trac-
26 ing, including application of equitable principles, that is permitted
27 under law of this state other than this chapter with respect to commin-
28 gled funds.
29 (4) In addition to any other remedy available to the assignee under
30 law of this state other than this chapter, if an assignor fails to turn
31 over proceeds to the assignee as required by subsection (2) of this sec-
32 tion, the assignee may recover from the assignor in a civil action:
33 (a) The proceeds, or an amount equal to the proceeds, that the
34 assignor was obligated to turn over under subsection (2) of this sec-
35 tion; and
36 (b) Reasonable attorney's fees and costs incurred by the assignee to
37 the extent provided for by agreement and not prohibited by law of
38 this state other than this chapter.
39 (5) The assignee may maintain an action under subsection (4) of this
40 section without bringing an action to foreclose any security interest
41 that it may have in the real property. Any sums recovered in the action
42 must be applied in the manner specified in section 55-3112, Idaho Code.
43 (6) Unless otherwise agreed, if an assignee entitled to priority
44 under section 55-3105(3), Idaho Code, enforces its interest in rents
45 after another creditor holding a subordinate security interest in rents
46 has enforced its interest under section 55-3108 or 55-3109, Idaho Code,
47 the creditor holding the subordinate security interest in rents is not
48 obligated to turn over any proceeds that it collects in good faith before
49 the creditor receives notification that the senior assignee has enforced
50 its interest in rents. The creditor shall turn over to the senior
51 assignee any proceeds that it collects after it receives the notifica-
53 55-3115. PERFECTION AND PRIORITY OF ASSIGNEE'S SECURITY INTEREST IN
1 PROCEEDS. (1) In this section:
2 (a) "Article 9" means chapter 28, title 9, Idaho Code, or, to the
3 extent applicable to any particular issue, article 9 as adopted by
4 the state whose laws govern that issue under the choice-of-laws rules
5 contained in article 9 as adopted by this state.
6 (b) "Conflicting interest" means an interest in proceeds, held by a
7 person other than an assignee, that is:
8 (i) A security interest arising under article 9; or
9 (ii) Any other interest if article 9 resolves the priority con-
10 flict between that person and a secured party with a conflicting
11 security interest in the proceeds.
12 (2) An assignee's security interest in identifiable cash proceeds is
13 perfected if its security interest in rents is perfected. An assignee's
14 security interest in identifiable noncash proceeds is perfected only if
15 the assignee perfects that interest in accordance with article 9.
16 (3) Except as otherwise provided in subsection (4) of this section,
17 priority between an assignee's security interest in identifiable proceeds
18 and a conflicting interest is governed by the priority rules in article
20 (4) An assignee's perfected security interest in identifiable cash
21 proceeds is subordinate to a conflicting interest that is perfected by
22 control under article 9 but has priority over a conflicting interest that
23 is perfected other than by control.
24 55-3116. PRIORITY SUBJECT TO SUBORDINATION. This chapter does not
25 preclude subordination by agreement as to rents or proceeds.
26 55-3117. UNIFORMITY OF APPLICATION AND CONSTRUCTION. In applying and
27 construing this uniform act, consideration must be given to the need to
28 promote uniformity of the law with respect to its subject matter among
29 states that enact it.
30 55-3118. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL
31 COMMERCE ACT. This chapter modifies, limits, and supersedes the federal
32 electronic signatures in global and national commerce act (15 U.S.C. sec-
33 tion 7001 et seq.) but does not modify, limit, or supersede section
34 101(c) of that act (15 U.S.C. section 7001(c)) or authorize electronic
35 delivery of any of the notices described in section 103(b) of that act
36 (15 U.S.C. section 7003(b)).
37 55-3119. APPLICATION TO EXISTING RELATIONSHIPS. (1) Except as other-
38 wise provided in this section, this chapter governs the enforcement of an
39 assignment of rents and the perfection and priority of a security inter-
40 est in rents, even if the document creating the assignment was signed and
41 delivered before July 1, 2007.
42 (2) This chapter does not affect an action or proceeding commenced
43 before July 1, 2007.
44 (3) Section 55-3104(1), Idaho Code, does not apply to any security
45 instrument signed and delivered before July 1, 2007.
46 (4) This chapter does not affect:
47 (a) The enforceability of an assignee's security interest in rents
48 or proceeds if, immediately before July 1, 2007, that security inter-
49 est was enforceable;
50 (b) The perfection of an assignee's security interest in rents or
51 proceeds if, immediately before July 1, 2007, that security interest
1 was perfected; or
2 (c) The priority of an assignee's security interest in rents or pro-
3 ceeds with respect to the interest of another person if, immediately
4 before July 1, 2007, the interest of the other person was enforceable
5 and perfected, and that priority was established.
STATEMENT OF PURPOSE
The Uniform Assignment of Rents Act seeks to bring
consistency to commercial real property transactions by
establishing a comprehensive model for the creation, perfection,
and enforcement of security interests in rents derived from real
There will be no impact on the state's general fund.
Name: Senator Bart Davis
Name: Dale Higer
STATEMENT OF PURPOSE/FISCAL NOTE S 1013