84-2a-529. (1) After default by the lessee under the lease contract of the type described in K.S.A. 84-2a-523(1) or (3)(a), or, if agreed, after other default by the lessee, if the lessor complies with subsection (2), the lessor may recover from the lessee as damages:
(a) For goods accepted by the lessee and not repossessed by or tendered to the lessor, and for conforming goods lost or damaged within a commercially reasonable time after risk of loss passes to the lessee (K.S.A. 84-2a-219), (i) accrued and unpaid rent as of the date of entry of judgment in favor of the lessor, (ii) the present value as of the same date of the rent for the then remaining lease term of the lease agreement, and (iii) any incidental damages allowed under K.S.A. 84-2a-530, less expenses saved in consequence of the lessee's default; and
(b) for goods identified to the lease contract if the lessor is unable after reasonable effort to dispose of them at a reasonable price or the circumstances reasonably indicate that effort will be unavailing, (i) accrued and unpaid rent as of the date of entry of judgment in favor of the lessor, (ii) the present value as of the same date of the rent for the then remaining lease term of the lease agreement, and (iii) any incidental damages allowed under K.S.A. 84-2a-530, less expenses saved in consequence of the lessee's default.
(2) Except as provided in subsection (3), the lessor shall hold for the lessee for the remaining lease term of the lease agreement any goods that have been identified to the lease contract and are in the lessor's control.
(3) The lessor may dispose of the goods at any time before collection of the judgment for damages obtained pursuant to subsection (1). If the disposition is before the end of the remaining lease term of the lease agreement, the lessor's recovery against the lessee for damages is governed by K.S.A. 84-2a-527 or 84-2a-528, and the lessor will cause an appropriate credit to be provided against a judgment for damages to the extent that the amount of the judgment exceeds the recovery available pursuant to K.S.A. 84-2a-527 or 84-2a-528.
(4) Payment of the judgment for damages obtained pursuant to subsection (1) entitles the lessee to use and possession of the goods not then disposed of for the remaining lease term of and in accordance with the lease agreement.
(5) After default by the lessee under the lease contract of the type described in subsection (1) or (3)(a) of K.S.A. 84-2a-523 or, if agreed, after other default by the lessee, a lessor who is held not entitled to rent under this section must nevertheless by awarded damages for nonacceptance under K.S.A. 84-2a-527 and 84-2a-528.
History: L. 1991, ch. 295, § 77; February 1, 1992.
KANSAS COMMENT, 1996
1. This section identifies the circumstances under which the lessor is entitled to recover the remaining rent under the lease contract. An action for rent is the lessor's counterpart to the lessee's action for specific performance. See 84-2a-521. This section is based on section 84-2-709, the seller's action for price.
2. Subsection (1) identifies the only three situations in which a lessor can recover the full rent from the lessee: (1) when the lessee has accepted the goods and the goods have not been repossessed by or tendered back to the lessor; (2) when the goods have been lost or damaged after risk of loss has passed to the lessee (84-2a-219); and (3) when goods identified to the contract cannot be disposed of by the lessor. This section rejects the rule of section 84-2-709(1)(a) that a lessor can recover rent for goods accepted by the lessee, even if the goods have been returned to the lessor. This change was made to the 1990 official text to increase the lessor's incentive to mitigate damages. See William H. Lawrence & John H. Minan, The Law of Personal Property Leasing ¶ 15.03(8)(a)(i) (1993). Otherwise, the statutory bases for an action for rent are analogous to those in section 84-2-709.
3. A lessor that prevails in an action for rent is entitled to unpaid rent as of the date judgment is entered, the present value of all remaining rent, and incidental damages, less any expenses saved. Official Comment 2 provides an example of a case in which a lessor might recover the present value of all future rent, not under this section, but under section 84-2a-528(2).
4. Under subsection (2), the lessor must hold for the lessee for the remaining lease term any identified goods in its control. If it becomes possible for the lessor to dispose of the goods before it collects the judgment, it may do so under subsection (3). If the lease term has not yet expired when the lessor disposes of the goods, its damages are limited to those under either section 84-2a-527 or section 84-2a-528. Subsection (4) entitles a lessee that pays a judgment for rent to the use of any goods not disposed of for the remaining lease term. Under subsection (5), a lessor whose action for rent fails may nonetheless recover damages under sections 84-2a-527 or 84-2a-528.
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