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) unless the department requests additional copies, 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 $500 security assignment processing fee.

(d) A security assignment document must include provision stating that,

(1) if the security assignee takes possession or control of the subject lease, permit, or concession that is subject to the security assignment, either directly or through a sub-tenant, by foreclosure or otherwise, under the security assignment,

(A) the security assignee accepts responsibility for all of the assignor's obligations under the lease, permit, or concession, including environmental liability and responsibility, commencing as of the date the security assignee succeds to the assigner's interest under the lease permit or concession; and

(B) except as provided in (3) of this subsection, those obligations terminate as to the security assignee upon further transfer of the lease, permit, or concession by the security assignee;

(2) the security assignee has an affirmative duty to notify the airport in writing upon the reconveyance or release of the security interest; and

(3) unless the security assignee participates in management of the airport tenant, the security assignee does not have environmental liability or responsibility for a the period pre-dating the time when it took possesion of control of the lease, permit or concession; in this paragraph, "participates in management" has the meaning given in 42 U.S.C. 9601(20)(F); The security assignee does not have environmental liability or responsibility following a subsequent transfer of its entire interest in the lease, permit, or concession unless, by its direct actions, negligence, or failure to use due care, the security assignee

(A) caused or contributed to a violation of any of the lease, permit or concession terms relating to environmental law or hazardous substances;

(B) violated 17 AAC 42.045 or 17 AAC 42.050;

(C) caused or contributed to actual financial damages to the airport due to a security assignee's breach of an environmental law.

(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 lessee's or concessionaire's obligations under the lease or concession, including environmental liability and responsibility.

(f) If a lease or concession conflicts with an assignment for security purposes of an interest in the lease or concession, the terms of the lease or concession govern. A provision stating this priority must be included in each assignment for security purposes, but is implied in all assignments for security purposes whether stated or not.

(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. However, any such provision is subject to the following terms and conditions:

(1) the department will give notice to a security assignee that the lessee or concessionaire is in default only if the department has within the preceding 12 months received from the security assignee written confirmation that the security assignee continues to have an interest in the lease or concession, and continues to desire such notice;

(2) if the department fails to provide to a security assignee 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 any notice to a security assignee as described in this subsection.

(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.

Notes

17 AAC 45.265

Eff. 3/28/2002, Register 161; am 3/22/2008, Register 185; am 3/20/2016, Register 217, April 2016; am 5/25/2017,Register 222, July 2017 ; am 7/1/2017,Register 222, July 2017

Authority:AS 02.15.020

AS 02.15.060

AS 02.15.090