Title 17 . Transportation and Public Facilities

Chapter 45 . Miscellaneous Provisions

Section 265. Assignment for security purposes

17 AAC 45.265. Assignment for security purposes

(a) This section applies to an assignment of an interest in a lease or concession for security purposes. A permit issued under this chapter may not be assigned for security purposes.

(b) Unless the lease or concession expressly provides otherwise, a lessee or concessionaire may not assign for security purposes all or a portion of or any interest in a lease or concession, including improvements, without the prior written consent of the department under 17 AAC 45.275. An assignment for security purposes made contrary to the requirements of this section and 17 AAC 45.275 is void.

(c) A request for consent to an assignment for security purposes must be submitted to the department in writing and must include

(1) the name, address, and telephone contact number for the proposed assignee;

(2) three originals of the executed assignment documents with notarized signatures of the assignor and proposed assignee;

(3) at least one copy of any deed of trust, promissory note, or other document that is a part of the security assignment transaction; and

(4) a non-refundable $50 security assignment processing fee.

(d) A security assignment document must include a provision stating that, if the security assignee takes possession or control of the subject lease or concession, either directly or through a sub-tenant, by foreclosure or otherwise, under the security assignment, the assignee accepts responsibility for all of the assignor's obligations under the lease or concession, including environmental liability and responsibility, except that a security assignee has no affirmative duty or obligation under a lease unless the security assignee takes possession or control of the leasehold.

(e) Exercise by a security assignee of a power of sale or further assignment under a security assignment is subject to the consent of the department under 17 AAC 45.275 with respect to any purchaser or assignee and shall be conditioned upon the purchaser or assignee accepting responsibility for all of the assignor's obligations under the lease or concession, including environmental liability and responsibility.

(f) In the event of a conflict between a lease or concession and an assignment of an interest in the lease or concession for security purposes, the terms of the lease or concession govern.

(g) A lessee or concessionaire may request that the department informally review a proposed assignment for security purposes before the assignment documents are executed. However, an assignment of a lease or concession for security purposes is effective only if the department consents to the assignment in writing under 17 AAC 45.275 after receiving a written request submitted under (c) of this section.

(h) The department's written consent to an assignment for security purposes may provide that the department will give notice to the security assignee that the lessee or concessionaire is in default only under the following conditions:

(1) the department will give notice to a security assignee that the lessee or concessionaire is in default only so long as the department receives annual written confirmation from the security assignee that the assignee continues to have an interest in the lease and continues to desire such notice; if at any time the department has not received such a confirmation within the previous twelve months, the department assumes no further obligation to give notice to that security assignee unless and until the department receives a new written request for notice from that security assignee;

(2) the department's agreement to provide notice to a security assignee is conditioned such that, if the department fails to provide notice of a lessee's or concessionaire's default despite having received annual confirmation from the security assignee as described in (1) of this subsection, the sole recourse of the security assignee is judicial action within one year to seek to vacate any change by the department in the security assignee's rights or interest;

(3) the department undertakes no duty for which the department may be liable for damages, whether direct or consequential, for failure to provide notice to a security assignee that the lessee or concessionaire is in default.

(i) An assignment for security purposes under this section may be reassigned to another holder only upon consent of the department under 17 AAC 45.275.

History: Eff. 3/28/2002, Register 161

Authority: AS 02.15.020

AS 02.15.060

AS 02.15.090