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Connecticut General Statutes Title 42. Business, Selling, Trading and Collection Practices § 42-409. Security interest restricted. Security deposit

Current as of January 01, 2025 | Updated by Findlaw Staff

(a) Except as otherwise provided in subsection (b) of this section, a consumer lease or other record signed by the lessee in connection with the lease may not provide for the creation of a security interest in personal or real property of the lessee to secure the payment of obligations arising from the lease. A security interest created in violation of this section is unenforceable, but does not otherwise affect the validity of the lease.

(b) A consumer lease may provide for:

(1) A security deposit, advance lease payment or other prepayment;

(2) A security interest in unearned insurance premiums or rebates of charges for a contract for services, or a service contract, extended warranty or maintenance agreement regarding the leased goods;

(3) A security interest in the proceeds or benefits of insurance, or of a contract for services, service contract, extended warranty or maintenance agreement on the leased goods, except to the extent the proceeds or benefits represent reimbursement to the lessee for expenses incurred; and

(4) A security interest in an accession to the leased goods.

(c) This section does not preclude a holder from making a permissive filing of a financing statement under article 9 of the Uniform Commercial Code. 1

(d) A holder is not required to pay interest on a security deposit, advance lease payment or other prepayment, but is required, within two weeks after the application of a security deposit, to account to the lessee in a record for the application of the security deposit.

1 C.G.S.A. § 42a-9-101 et seq.
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Cite this article: FindLaw.com - Connecticut General Statutes Title 42. Business, Selling, Trading and Collection Practices § 42-409. Security interest restricted. Security deposit - last updated January 01, 2025 | https://codes.findlaw.com/ct/title-42-business-selling-trading-and-collection-practices/ct-gen-st-sect-42-409/

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