§ 338. Security interest prohibited. 1. No retail lease agreement, or any other agreement executed by the lessee in connection therewith, shall provide for the creation of a security interest in any personal or real property of the lessee to secure the payment of the debt arising from the lease. This prohibition shall not apply to: (a) the taking of a security deposit, advance payment of rent or other prepayment by cash, check or similar means; (b) the retention or exercise by a banking organization of a right of set off; or (c) the retention of a security interest in the proceeds, cancellation refunds or other rights of the lessee under any insurance, repair or service contract whose cost is included in the total monthly lease payment.
2. A security interest taken in violation of this section shall be void but shall not otherwise affect the validity of a retail lease agreement.
Copyright ©2024 LegalFix. All rights reserved. LegalFix is not a law firm, is not licensed to practice law, and does not provide legal advice, services, or representation. The information on this website is an overview of the legal plans you can purchase—or that may be provided by your employer as an employee benefit or by your credit union or other membership group as a membership benefit.
LegalFix provides its members with easy access to affordable legal services through a network of independent law firms. LegalFix, its corporate entity, and its officers, directors, employees, agents, and contractors do not provide legal advice, services, or representation—directly or indirectly.
The articles and information on the site are not legal advice and should not be relied upon—they are for information purposes only. You should become a LegalFix member to get legal services from one of our network law firms.
You should not disclose confidential or potentially incriminating information to LegalFix—you should only communicate such information to your network law firm.
The benefits and legal services described in the LegalFix legal plans are not always available in all states or with all plans. See the legal plan Benefit Overview and the more comprehensive legal plan contract during checkout for coverage details in your state.
Use of this website, the purchase of legal plans, and access to the LegalFix networks of law firms are subject to the LegalFix Terms of Service and Privacy Policy.