Ohio § 1310.37

§ 1310.37.

(A) As used in this section: (1) Goods are “ fixtures ” when they become so related to particular real estate that an interest in them arises

under real estate law. (2) A “ fixture filing ” is the filing, in the office in which a record of a mortgage on the real estate

would be filed or recorded, of a financing statement covering goods that are or are

to become fixtures and conforming to the requirements of divisions (A) and (B) of section 1309.502 of the Revised Code . (3) A lease is a “ purchase money lease ” unless the lessee has possession or use of the goods or the right to possession

or use of the goods before the lease agreement is enforceable. (4) A mortgage is a “ construction mortgage ” to the extent it secures an obligation incurred for the construction of an improvement

on land, including the acquisition cost of the land, if the recorded writing so indicates. (5) “ Encumbrance ” includes real estate mortgages, other liens on real estate, and all other rights

in real estate that are not ownership interests. (B) Under sections 1310.01 to 1310.78 of the Revised Code , a lease may be of goods that are fixtures or may continue in goods that become fixtures,

but, under those sections, no lease exists of ordinary building materials incorporated

into an improvement on land. (C) Sections 1310.01 to 1310.78 of the Revised Code do not prevent the creation of a lease of fixtures pursuant to real estate law. (D) The perfected interest of a lessor of fixtures has priority over a conflicting interest

of an encumbrancer or owner of the real estate if either of the following applies: (1) The lease is a purchase money lease, the conflicting interest of the encumbrancer

or owner arises before the goods become fixtures, the interest of the lessor is perfected

by a fixture filing before the goods become fixtures or within ten days after they

become fixtures, and the lessee has an interest of record in the real estate or is

in possession of the real estate. (2) The interest of the lessor is perfected by a fixture filing before the interest of

the encumbrancer or owner is of record, the lessor's interest has priority over any

conflicting interest of a predecessor in title of the encumbrancer or owner, and the

lessee has an interest of record in the real estate or is in possession of the real

estate. (E) The interest of a lessor of fixtures, whether or not perfected, has priority over

the conflicting interest of an encumbrancer or owner of the real estate if any of

the following applies: (1) The fixtures are readily removable factory or office machines, readily removable

equipment that is not primarily used or leased for use in the operation of the real

estate, or readily removable replacements of domestic appliances that are goods subject

to a consumer lease and, before the goods become fixtures, the lease contract is enforceable. (2) The conflicting interest is a lien on the real estate obtained by legal or equitable

proceedings after the lease contract is enforceable. (3) The encumbrancer or owner has consented in writing to the lease or has disclaimed

an interest in the goods as fixtures. (4) The lessee has a right to remove the goods as against the encumbrancer or owner.  If the lessee's right to remove terminates, the priority of the interest of the

lessor continues for a reasonable time. (F) Notwithstanding division (D)(1) of this section but otherwise subject to divisions

(D) and (E) of this section, the interest of a lessor of fixtures, including the lessor's

residual interest, is subordinate to the conflicting interest of an encumbrancer of

the real estate under a construction mortgage recorded before the goods become fixtures

if the goods become fixtures before the completion of the construction.  To the extent given to refinance a construction mortgage, the conflicting interest

of an encumbrancer of the real estate under a mortgage has this priority to the same

extent as the encumbrancer of the real estate under the construction mortgage. (G) In cases not within divisions (A) to (F) of this section, priority between the interest

of a lessor of fixtures, including the lessor's residual interest, and the conflicting

interest of an encumbrancer or owner of the real estate who is not the lessee is determined

by the priority rules governing conflicting interests in real estate. (H) If the interest of a lessor of fixtures, including the lessor's residual interest,

has priority over all conflicting interests of all owners and encumbrancers of the

real estate, the lessor or the lessee, on default, expiration, termination, or cancellation

of the lease agreement but subject to the lease agreement and sections 1310.01 to 1310.78 of the Revised Code , or if necessary to enforce other rights and remedies of the lessor or lessee under

those sections, may remove the goods from the real estate, free and clear of all conflicting

interests of all owners and encumbrancers of the real estate, but the lessor or lessee

shall reimburse any encumbrancer or owner of the real estate who is not the lessee

and who has not otherwise agreed for the cost of repair of any physical injury, but

not for any diminution in value of the real estate caused by the absence of the goods

removed or by any necessity of replacing them.  A person entitled to reimbursement may refuse permission to remove until the party

seeking removal gives adequate security for the performance of this obligation. (I) Even though the lease agreement does not create a security interest, the interest

of a lessor of fixtures, including the lessor's residual interest, is perfected by

filing a financing statement as a fixture filing for leased goods that are or are

to become fixtures in accordance with the relevant provisions of Chapter 1309. of

the Revised Code.