District Of Columbia § 28:2A-308 - Special rights of creditors.
Full text of District Of Columbia D.C. Code § 28:2A-308 — Special rights of creditors., with citation guidance and answers to common questions.
§ 28:2A-308. Special rights of creditors.
28:2A-308A creditor of a lessor in possession of goods subject to a lease contract may treat the lease contract as void if as against the creditor retention of possession by the lessor is fraudulent under any statute or rule of law, but retention of possession in good faith and current course of trade by the lessor for a commercially reasonable time after the lease contract becomes enforceable is not fraudulent.
Nothing in this article impairs the rights of creditors of a lessor if the lease contract (i) becomes enforceable, not in current course of trade but in satisfaction of or as security for a preexisting claim for money, security, or the like, and (ii) is made under circumstances which under any statute or rule of law apart from this article would constitute the transaction a fraudulent transfer or voidable preference.
A creditor of a seller may treat a sale or an identification of goods to a contract for sale as void if as against the creditor retention of possession by the seller is fraudulent under any statute or rule of law, but retention of possession of the goods pursuant to a lease contract entered into by the seller as lessee and the buyer as lessor in connection with the sale or identification of the goods is not fraudulent if the buyer bought for value and in good faith.
Annotations
“Value”. Section 1-201(44).
“Seller”. Section 2-103(1)(d).
“Sale”. Section 2-106(1).
“Rights”. Section 1-201(36).
“Reasonable time”. Section 1-204(1) and (2).
“Money”. Section 1-201(24).
“Lessor”. Section 2A-103(1)(p).
“Lessee”. Section 2A-103(1)(n).
“Lease contract”. Section 2A-103(1)(l).
“Goods”. Section 2A-103(1)(h).
“Good faith”. Sections 1-201(19) and 2-103(1)(b).
“Creditor”. Section 1-201(12).
“Contract”. Section 1-201(11).
“Buyer”. Section 2-103(1)(a).
Sections 1-201(19), 1-201(44), 2-402(2) and 2A-103(4).
Finally, subsection (3) states a new rule with respect to sale-leaseback transactions, i.e., transactions where the seller sells goods to a buyer but possession of the goods is retained by the seller pursuant to a lease contract between the buyer as lessor and the seller as lessee. Notwithstanding any statute or rule of law that would treat such retention as fraud, whether per se, prima facie, or otherwise, the retention is not fraudulent if the buyer bought for value ( Section 1-201(44)) and in good faith ( Sections 1-201(19) and 2-103(1)(b)). Section 2A-103(3) and (4). This provision overrides Section 2-402(2) to the extent it would otherwise apply to a sale-leaseback transaction.
Subsection (2) also preserves the possibility of an attack on the lease by creditors of the lessor if the lease was made in satisfaction of or as security for a pre-existing claim, and would constitute a fraudulent transfer or voidable preference under other law.
Subsection (1) states a general rule of avoidance where the lessor has retained possession of goods if such retention is fraudulent under any statute or rule of law. However, the subsection creates an exception under certain circumstances for retention of possession of goods for a commercially reasonable time after the lease contract becomes enforceable.
Rephrased and new material added to conform to leasing terminology and practice.
Section 2-402(2) and (3)(b).
Source: official District Of Columbia text · Last verified 2026-08-27
Frequently Asked Questions About District Of Columbia § 28:2A-308
What does D.C. Code § 28:2A-308 cover?
Section 28:2A-308 ("Special rights of creditors.") is part of the D.C. Code, the codified statutory law of District Of Columbia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite District Of Columbia § 28:2A-308?
A common citation format is "D.C. Code § 28:2A-308" (District Of Columbia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of District Of Columbia law?
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How does District Of Columbia § 28:2A-308 apply to my situation?
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Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in District Of Columbia.