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Lessor’s right of security over movables belonging to third parties

On 23, 12 2011 | No Comments | In Uncategorized | By Kadri Lensment

Jurisdiction – ESTONIA

The lessor of an immovable has the right of security (pledge) over movables located on the leased immovable and over movables which are part of furnishings of the room or are used together with the room in order to secure claims arising from a lease contract. If the lessor has any reason to suspect that the lessee wants to move out or to remove items from the premises, the lessor may withhold the items to the extent which is necessary in order to secure the claims of the lessor. In particular, the right to withhold items means that the lessor may demand that the items encumbered with the pledge would remain on the lessor’s premises.

The lessor’s right of security does not only apply to the lessee, but to all persons. Meaning that the pledge extends to all movables in the leased room, including those that belong to third parties. In its recent judgment No. 3-2-1-127-11, the Supreme Court explained that the rights of third parties (incl. those of an owner of the item) are not to be preferred to the right of pledge if the lessor learned that the items do not belong to the lessee only after terminating the lease contract. The prohibition to remove items encumbered with the pledge also binds third parties. This means, for example, that even the owner of a movable may not take possession of the item if the lessor has used its right to withhold it.