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Secured Transactions Assignments 20 and 33. Land and Fixtures Recording Systems. The relationship between Article 9 filing and real estate recording. Property lies along a continuum from real to personal. Personal. Real. The relationship between Article 9 filing and real estate recording.

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Secured Transactions Assignments 20 and 33

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Secured transactions assignments 20 and 33

Secured TransactionsAssignments 20 and 33

Land and Fixtures Recording Systems


The relationship between article 9 filing and real estate recording

The relationship between Article 9 filing and real estate recording

Property lies along a continuum from real to personal . . .

Personal

Real


The relationship between article 9 filing and real estate recording1

The relationship between Article 9 filing and real estate recording

Property lies along a continuum from real to personal . . .

Intermediate

Chattels

Personal

Land

Real


The relationship between article 9 filing and real estate recording2

The relationship between Article 9 filing and real estate recording

Real estate law “Fixtures” 9-102(a)(41)

Intermediate

Chattels

Personal

Land

Real

9-334(b)

Real estate law governs goods sufficiently related to real estate to be a “fixture” under real estate law.


The relationship between article 9 filing and real estate recording3

The relationship between Article 9 filing and real estate recording

Real estate law “Fixtures” 9-102(a)(41)

9-334(a)

Intermediate

Chattels

Personal

Land

Real

9-334(b)

UCC Article 9

UCC Article 9 permits the attachment and perfection of security interests in “goods, including fixtures.”


The relationship between article 9 filing and real estate recording4

The relationship between Article 9 filing and real estate recording

Real estate law “Fixtures” 9-102(a)(41)

9-334(a)

Intermediate

Chattels

Personal

Land

Real

“Ordinary

building

materials”

9-334(b)

UCC Article 9

UCC Article 9 permits the attachment and perfection of security interests in “goods, including fixtures.” But not “ordinary building materials incorporated into an improvement on land.”


The relationship between article 9 filing and real estate recording5

The relationship between Article 9 filing and real estate recording

Real estate law “Fixtures” 9-102(a)(41)

9-334(a)

“Trade

fixtures”

Intermediate

Intermediate

Chattels

Personal

Land

Real

“Ordinary

building

materials”

9-334(b)

UCC Article 9

“Trade fixtures” is a term used to refer to store shelving and display cases that are not part of the real estate.


The relationship between article 9 filing and real estate recording6

The relationship between Article 9 filing and real estate recording

Real estate law “Fixtures” 9-102(a)(41)

9-334(a)

“Trade

fixtures”

Intermediate

Chattels

Personal

Land

Real

“Ordinary

building

materials”

9-334(b)

UCC Article 9

“Goods” 9-102(a)(44)

“Goods” means all things that are moveable when a security interest attaches. “Goods” includes “(i) fixtures . . . .”

“Goods” includes “ordinary building materials incorporated into an improvement on land” Comment 3 to § 9-334


The relationship between article 9 filing and real estate recording7

The relationship between Article 9 filing and real estate recording

Real estate law “Fixtures” 9-102(a)(41)

9-334(a)

“Trade

fixtures”

Intermediate

Chattels

Personal

Land

Real

“Ordinary

building

materials”

“chattel financing is preserved”

9-334(b)

UCC Article 9

“Goods” 9-102(a)(44)

“Goods” means all things that are moveable when a security interest attaches. “Goods” includes “(i) fixtures . . . .”

“Goods” includes “ordinary building materials incorporated into an improvement on land” Comment 3 to § 9-334


The relationship between article 9 filing and real estate recording8

The relationship between Article 9 filing and real estate recording

Real estate law “Fixtures” 9-102(a)(41)

9-334(a)

“Trade

fixtures”

Intermediate

Chattels

Personal

Land

Real

“Ordinary

building

materials”

Readily

removables

9-334(b)

UCC Article 9

“Goods” 9-102(a)(44)

UCC deference to real estate law is not complete. UCC seeks to override as to “readily removable” fixtures § 9-334(e)(2)


Secured transactions assignments 20 and 33

Real estate

recording system

Mortgages

Financing statements filed as fixture filings, 9-502(b)

Mortgages effective as fixture filings under 9-502(c)

Article 9 filing system

Financing statements

Financing statements filed against fixtures, 9-501(a)(2).

Financing statements against collateral, including fixtures, of a transmitting utility.

Separate Filing Systems


Secured transactions assignments 20 and 33

Real estate

recording system

Mortgages

Article 9 filing system

Financing statements

Separate Filing Systems


Secured transactions assignments 20 and 33

Real estate

recording system

Mortgages

Financing statements filed as fixture filings, §9-502(b)

Article 9 filing system

Financing statements

Separate Filing Systems


Separate filing systems

Real estate

recording system

Mortgages

Financing statements filed as fixture filings, §9-502(b)

Mortgages effective as fixture filings under §9-502(c)

Article 9 filing system

Financing statements

Separate Filing Systems


Secured transactions assignments 20 and 33

Real estate

recording system

Mortgages

Financing statements filed as fixture filings, §9-502(b)

Mortgages effective as fixture filings under §9-502(c)

Article 9 filing system

Financing statements

Financing statements filed against fixtures, but not fixture filings §9-501(a)(2).

Separate Filing Systems


Separate filing systems1

Real estate

recording system

Mortgages

Financing statements filed as fixture filings, §9-502(b)

Mortgages effective as fixture filings under §9-502(c)

Article 9 filing system

Financing statements

Financing statements filed against fixtures, but not fixture filings §9-501(a)(2).

Financing statements against transmitting utilities, including fixture filings.

Separate Filing Systems


Financing statement which is filed as a fixture filing 9 502 b formalities

Financing statement which is filed as a fixture filing: §9-502(b) formalities

  • Provide name of the debtor

  • Provide name of the secured party

  • Indicate the collateral covered

  • Indicate that it covers fixtures (so real estate searchers will know what it is)

  • Indicate it is to be filed in the real estate records (so filing officer will know what to do with it)

  • Describe the real property (so real estate searcher can recognize it

  • Provide the name of a record owner (so it will be in the chain of title if fixture owner is not land owner)


Financing statement which is filed as a fixture filing 9 502 b formalities1

Financing statement which is filed as a fixture filing: §9-502(b) formalities

  • Provide name of the debtor

  • Provide name of the secured party

  • Indicate the collateral covered

  • Indicate that it covers fixtures (so real estate searchers will know what it is) [on the §9-521 addendum]

  • Indicate it is to be filed in the real estate records (so filing officer will know what to do with it)

  • Describe the real property (so real estate searcher can recognize it

  • Provide the name of a record owner (so it will be in the chain of title if fixture owner is not land owner)


Financing statement which is filed as a fixture filing 9 502 b formalities2

Financing statement which is filed as a fixture filing: §9-502(b) formalities

  • Provide name of the debtor

  • Provide name of the secured party

  • Indicate the collateral covered

  • Indicate that it covers fixtures (so real estate searchers will know what it is) [on the §9-521 addendum]

  • Indicate it is to be filed in the real estate records (so filing officer will know what to do with it) [§9-521form]

  • Describe the real property (so real estate searcher can recognize it

  • Provide the name of a record owner (so it will be in the chain of title if fixture owner is not land owner)


Financing statement which is filed as a fixture filing 9 502 b formalities3

Financing statement which is filed as a fixture filing: §9-502(b) formalities

  • Provide name of the debtor

  • Provide name of the secured party

  • Indicate the collateral covered

  • Indicate that it covers fixtures (so real estate searchers will know what it is) [on the §9-521 addendum]

  • Indicate it is to be filed in the real estate records (so filing officer will know what to do with it) [§9-521form]

  • Describe the real property (so real estate searcher can see its relevance) [§9-521 addendum]

  • Provide the name of a record owner (so it will be in the chain of title if fixture owner is not land owner)


Financing statement which is filed as a fixture filing 9 502 b formalities4

Financing statement which is filed as a fixture filing: §9-502(b) formalities

  • Provide name of the debtor

  • Provide name of the secured party

  • Indicate the collateral covered

  • Indicate that it covers fixtures (so real estate searchers will know what it is) [on the §9-521 addendum]

  • Indicate it is to be filed in the real estate records (so filing officer will know what to do with it) [§9-521form]

  • Describe the real property (so real estate searcher can see its relevance) [§9-521 addendum]

  • Provide the name of a record owner (so it will be in the chain of title if fixture owner is not land owner) [§9-521 addendum]


Financing statement which is filed as a fixture filing 9 502 b formalities5

Financing statement which is filed as a fixture filing: §9-502(b) formalities

  • Provide name of the debtor

  • Provide name of the secured party

  • Indicate the collateral covered

  • Indicate that it covers fixtures (so real estate searchers will know what it is)

  • Indicate it is to be filed in the real estate records (so filing officer will know what to do with it)

  • Describe the real property (so real estate searcher can recognize it)

  • Provide the name of a record owner (so it will be in the chain of title if fixture owner is not land owner)

Secured

Party

Security

interest

Real estate

owner


Financing statement which is filed as a fixture filing 9 502 b formalities6

Financing statement which is filed as a fixture filing: §9-502(b) formalities

  • Provide name of the debtor

  • Provide name of the secured party

  • Indicate the collateral covered

  • Indicate that it covers fixtures (so real estate searchers will know what it is)

  • Indicate it is to be filed in the real estate records (so filing officer will know what to do with it)

  • Describe the real property (so real estate searcher can recognize it)

  • Provide the name of a record owner (so it will be in the chain of title if fixture owner is not land owner)

Secured

Party

Security

interest

Fixture

owner

Real estate

Owner

Unrecorded

lease


Financing statement which is filed as a fixture filing 9 502 b formalities7

Financing statement which is filed as a fixture filing: §9-502(b) formalities

  • Provide name of the debtor

  • Provide name of the secured party

  • Indicate the collateral covered

  • Indicate that it covers fixtures (so real estate searchers will know what it is)

  • Indicate it is to be filed in the real estate records (so filing officer will know what to do with it)

  • Describe the real property (so real estate searcher can recognize it)

  • Provide the name of a record owner (so it will be in the chain of title if fixture owner is not land owner)

Secured

Party

Mortgagee

(searcher)

Security

interest

Mortgage

Fixture

owner

Real estate

Owner

Unrecorded

lease


Problem 20 1 page 357

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • A “one-third interest in a 160-acre tract of land?”

    Tenancy in common: Real estate mortgage

    Trust or partnership: Financing statement in SOS office

  • Pine trees growing in straight rows for easy harvesting?

    Not a fixture, not permanently affixed (Christmas tree case)

    Mortgage reaches crops in some states (Comment 12)

    Security interest in crops has priority over mortgage in crops, 9-334(i), so file financing statement with SOS


Problem 20 1 page 3571

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • A “one-third interest in a 160-acre tract of land?”

    Tenancy in common: Real estate mortgage

    Trust or partnership: Financing statement in SOS office

  • Pine trees growing in straight rows for easy harvesting?

    Not a fixture, not permanently affixed (Christmas tree case)

    Mortgage reaches crops in some states (Comment 12)

    Security interest in crops has priority over mortgage in crops, 9-334(i), so file financing statement with SOS


Problem 20 1 page 3572

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • A “one-third interest in a 160-acre tract of land?”

    Tenancy in common: Real estate mortgage

    Trust or partnership: Financing statement in SOS office

  • Pine trees growing in straight rows for easy harvesting?

    Not a fixture, not permanently affixed (Christmas tree case)

    Mortgage reaches crops in some states (Comment 12)

    Security interest in crops has priority over mortgage in crops, 9-334(i), so file financing statement with SOS


Problem 20 1 page 3573

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • A “one-third interest in a 160-acre tract of land?”

    Tenancy in common: Real estate mortgage

    Trust or partnership: Financing statement in SOS office

  • Pine trees growing in straight rows for easy harvesting?

    Not a fixture, not permanently affixed (Christmas tree case)

    Mortgage reaches crops in some states (Comment 12)

    Security interest in crops has priority over mortgage in crops, 9-334(i), so file financing statement with SOS


Problem 20 1 page 3574

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • A “one-third interest in a 160-acre tract of land?”

    Tenancy in common: Real estate mortgage

    Trust or partnership: Financing statement in SOS office

  • Pine trees growing in straight rows for easy harvesting?

    Probably not a fixture, not permanently affixed. Need a filing with SOS. (Christmas tree case)

    Mortgage reaches crops in some states (Comment 12)

    Security interest in crops has priority over mortgage in crops, 9-334(i), so file financing statement with SOS


Problem 20 1 page 3575

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • A “one-third interest in a 160-acre tract of land?”

    Tenancy in common: Real estate mortgage

    Trust or partnership: Financing statement in SOS office

  • Pine trees growing in straight rows for easy harvesting?

    Probably not a fixture, not permanently affixed. Need a filing with SOS. (Christmas tree case)

    May be fixture, so need fixture filing.

    Mortgage reaches crops in some states (§9-334 Cmt. 12), which means it doesn’t reach them in others.


Problem 20 1 page 3576

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • A “one-third interest in a 160-acre tract of land?”

    Tenancy in common: Real estate mortgage

    Trust or partnership: Financing statement in SOS office

  • Pine trees growing in straight rows for easy harvesting?

    Probably not a fixture, not permanently affixed. Need a filing with SOS. (Christmas tree case)

    May be fixture, so need fixture filing.

    Mortgage reaches crops in some states (§9-334 Cmt. 12), which means it doesn’t reach them in others.


Problem 20 1 page 3577

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Are the trees fixtures? Maybe “timber to be cut,” 9-501(a)(1)(A).

    Mortgage will reach trees unless we have decided to cut them.

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-308(e), 9-203(g)

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))


Problem 20 1 page 3578

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Mortgage will reach trees.

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-308(e), 9-203(g)

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))


Problem 20 1 page 3579

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Mortgage will reach trees.

    Can a UCC filing reach trees? Not if they are like “ordinary building materials.”

    Should the mortgage exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-308(e), 9-203(g)

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))


Problem 20 1 page 35710

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Mortgage will reach trees.

    Can a UCC filing reach trees? Not if they are like “ordinary building materials.”

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-308(e), 9-203(g)

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))


Problem 20 1 page 35711

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Mortgage will reach trees.

    Can a UCC filing reach trees? Not if they are like “ordinary building materials.”

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-308(e), 9-203(g)

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))


Problem 20 1 page 35712

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Mortgage will reach trees.

    Can a UCC filing reach trees? Not if they are like “ordinary building materials.”

    d.Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-308(e), 9-203(g)

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))


Problem 20 1 page 35713

Problem 20.1, page 357

Secured Lend-

ing Partners

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Are the trees fixtures? Maybe “timber to be cut,” 9-501(a)(1)(A), but see “goods” definition, 9-102(a)(44).

    Mortgage will reach trees unless we have decided to cut them.

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-308(e), 9-203(g)

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))

Promissory note 2 and security interest in the mortgage

Promissory note 1 and mortgage

Pacific

Interests

Mark IV

Partners


Problem 20 1 page 35714

Problem 20.1, page 357

Secured Lend-

ing Partners

Does Article 9 apply? §9-109(b)

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Are the trees fixtures? Maybe “timber to be cut,” 9-501(a)(1)(A), but see “goods” definition, 9-102(a)(44).

    Mortgage will reach trees unless we have decided to cut them.

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-308(e), 9-203(g)

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))

Promissory note 2 and security interest in the mortgage

Promissory note 1 and mortgage

Pacific

Interests

Mark IV

Partners


Problem 20 1 page 35715

Problem 20.1, page 357

Secured Lend-

ing Partners

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Are the trees fixtures? Maybe “timber to be cut,” 9-501(a)(1)(A), but see “goods” definition, 9-102(a)(44).

    Mortgage will reach trees unless we have decided to cut them.

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-203(g), 9-308(e).

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))

Promissory note 2 and security interest in the mortgage

Promissory note 1 and mortgage

Pacific

Interests

Mark IV

Partners


Problem 20 1 page 35716

Problem 20.1, page 357

Secured Lend-

ing Partners

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Are the trees fixtures? Maybe “timber to be cut,” 9-501(a)(1)(A), but see “goods” definition, 9-102(a)(44).

    Mortgage will reach trees unless we have decided to cut them.

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-203(g), 9-308(e). How?

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))

Promissory note 2 and security interest in the mortgage

Promissory note 1 and mortgage

Pacific

Interests

Mark IV

Partners


Problem 20 1 page 35717

Problem 20.1, page 357

Secured Lend-

ing Partners

How do we perfect in these items of collateral:

  • Parcel of land with virgin growth of walnut trees?

    Are the trees fixtures? Maybe “timber to be cut,” 9-501(a)(1)(A), but see “goods” definition, 9-102(a)(44).

    Mortgage will reach trees unless we have decided to cut them.

    d. Should the mortgage mention the trees?

    Maybe, but “include one, exclude the other.” (grass).

  • Promissory note and the mortgage that secures it.

    Perfect in the right to payment, 9-203(g), 9-308(e).How?

    Take possession (instrument, 9-313(a)) and file with SOS (account, 9-310(a))

Promissory note 2 and security interest in the mortgage

Promissory note 1 and mortgage

Pacific

Interests

Mark IV

Partners


Problem 20 1 page 35718

Problem 20.1, page 357

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own?

    Is the tower a fixture?

    Is Pacific Cellular, Inc. a transmitting utility?

    9-102(a)(80). Transmitting utility means a person primarily engaged in the business of:

    (B) Transmitting communications electrically, electromagnetically, or by light


Problem 20 1 page 35719

Problem 20.1, page 357

Pacific

Interests

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own?

    Is the tower a fixture?

    Is Pacific Cellular, Inc. a transmitting utility?

    9-102(a)(80). Transmitting utility means a person primarily engaged in the business of:

    (B) Transmitting communications electrically,

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35720

Problem 20.1, page 357

Pacific

Interests

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own?

    Is the tower a fixture?

    Is Pacific Cellular, Inc. a transmitting utility?

    9-102(a)(80). Transmitting utility means a person primarily engaged in the business of:

    (B) Transmitting communications electrically,

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35721

Problem 20.1, page 357

Pacific

Interests

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own? How do we perfect a security interest in stock?

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35722

Problem 20.1, page 357

Pacific

Interests

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own? How do we perfect a security interest in stock?

    We also want the tower. Is it a fixture?

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35723

Problem 20.1, page 357

Pacific

Interests

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own? How do we perfect a security interest in stock?

    We also want the tower. Is it a fixture?

    Who is the “debtor?”

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35724

Problem 20.1, page 357

Pacific

Interests

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own? How do we perfect a security interest in stock?

    We also want the tower. Is it a fixture?

    Who is the “debtor?” A transmitting utility?

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35725

Problem 20.1, page 357

Pacific

Interests

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own? How do we perfect a security interest in stock?

    We also want the tower. Is it a fixture?

    Who is the “debtor?” A transmitting utility?

    9-102(a)(80). Transmitting utility means a person primarily engaged in the business of:

    (B) Transmitting communications electrically, electromagnetically, or by light

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35726

Problem 20.1, page 357

Pacific

Interests

How do we perfect in:

  • Cell phone tower?

    What does Pacific Interests own? How do we perfect a security interest in stock?

    We also want the tower. Is it a fixture?

    Who is the “debtor?” A transmitting utility?

    9-102(a)(80). Transmitting utility means a person primarily engaged in the business of:

    (B) Transmitting communications electrically, electromagnetically, or by light

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35727

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35728

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35729

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35730

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35731

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35732

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35733

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35734

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

Farmer


Problem 20 1 page 35735

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

What do we file?

Farmer


Problem 20 1 page 35736

Problem 20.1, page 357

How do we perfect in the tower if:

Pacific

Interests

Stock

Pacific

Cellular Inc.

What do we file? (1) Local fixture filing and (2) SOS indicating that it may cover fixtures of a transmitting utility.

Farmer


Problem 20 1 page 35737

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. 9-102(a)(80)

    Are pipes fixtures? Probably yes. So we file under 9-501(b).

    How do we perfect in the real property and easements? Mortgages, 9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35738

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility?

    §9-102(a)(80) “Transmitting utility” means a person primarily engaged in the business of:

    . . . .

    (C) transmitting goods by pipeline or sewer

    . . . .


Problem 20 1 page 35739

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under 9-501(b).

    How do we perfect in the real property and easements? Mortgages, 9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35740

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures?Probably yes. So we file under 9-501(b).

    How do we perfect in the real property and easements? Mortgages, 9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35741

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements? Mortgages, 9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35742

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements?Mortgages, 9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35743

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements? Mortgages, §9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35744

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements? Mortgages, §9-334(a). Nightmare.

    Can the mortgages include the pipes?Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35745

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements? Mortgages, §9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35746

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements? Mortgages, §9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings?No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35747

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements? Mortgages, §9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is 9-501(b)? Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35748

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements? Mortgages, §9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is §9-501(b)?Helps if the fixtures are attached to someone else’s land.


Problem 20 1 page 35749

Problem 20.1, page 357

How do we perfect in these items of collateral:

  • Natural gas pipeline that runs through 119 counties in four states?

    Transmitting utility? Yes. §9-102(a)(80)(C)

    Are pipes fixtures? Probably yes. So we file under §9-501(b).

    How do we perfect in the real property and easements? Mortgages, §9-334(a). Nightmare.

    Can the mortgages include the pipes? Yes, automatically.

    If we do mortgages, do we need fixture filings? No.

    So what good is §9-501(b)? Helps if the fixtures are attached to land or easements that won’t be collateral (example, the cell phone tower).


Secured transactions assignments 20 and 33

Problem 20.1, page 357

Secured Lending

Partners, Inc.

Mortgagee on

the Mall

Security interest in “store fixtures”

Mortgage on the Mall

Pacific

Interests

Lease

Oaks Mall,

Ltd.

How do we perfect in the store fixtures?


Secured transactions assignments 20 and 33

Problem 20.1, page 357

Secured Lending

Partners, Inc.

Mortgagee on

the Mall

Security interest in “store fixtures”

Mortgage on the Mall

Pacific

Interests

Lease

Oaks Mall,

Ltd.

How do we perfect in the store fixtures?

Fixture filing and UCC filing


The big picture

The Big Picture

Assignment 33: Secureds vs. Secureds: Land and Fixtures

Mortgage vs. Mortgage

Purchase money mortgage vs. Mortgage

Judgment lien vs. Mortgage

Mechanic’s lien vs. Mortgage

Fixture filing vs. Mortgage (also Construction Mortgage)

Purchase money fixture filing vs. Mortgage


The big picture1

The Big Picture

Assignment 33: Secureds vs. Secureds: Land and Fixtures

Mortgage vs. Mortgage

Purchase money mortgage vs. Mortgage

Judgment lien vs. Mortgage

Mechanic’s lien vs. Mortgage

Fixture filing vs. Mortgage (also Construction Mortgage)

Purchase money fixture filing vs. Mortgage


Priority rules fixture filing vs ordinary mortgage

Priority Rules: Fixture Filing vs.Ordinary Mortgage

.


Priority rules fixture filing vs ordinary mortgage1

Priority Rules: Fixture Filing vs.Ordinary Mortgage

.

§334(e). First to file (in the real property records).


Priority rules fixture filing vs ordinary mortgage2

Priority Rules: Fixture Filing vs.Ordinary Mortgage

.

§334(e). First to file (in the real property records).

In context, that means the mortgage will nearly always win:


Priority rules fixture filing vs ordinary mortgage3

Priority Rules: Fixture Filing vs.Ordinary Mortgage

.

§334(e). First to file (in the real property records).

In context, that means the mortgage will nearly always win:

Goods

First fixture filing

opportunity

Mortgage 1

Mortgage 2

Real estate

Goods

become

fixtures


Priority rules fixture filing vs ordinary mortgage4

Priority Rules: Fixture Filing vs.Ordinary Mortgage

.

§334(e). First to file (in the real property records).

In context, that means the mortgage will nearly always win:

Goods

First fixture filing

opportunity

Mortgage 1

Mortgage 2

Real estate

Goods

become

fixtures

The fixture filing is subordinate to Mortgage 1, prior to Mortgage 2.


Priority rules purchase money fixture filing vs ordinary mortgage

Priority Rules: Purchase Money Fixture Filing vs. Ordinary Mortgage

.


Priority rules purchase money fixture filing vs ordinary mortgage1

Priority Rules: Purchase Money Fixture Filing vs. Ordinary Mortgage

.

§334(d). A purchase money security interest in fixtures has priority over an earlier-recorded mortgage if the fixture filing is made before 20 days after the goods become fixtures


Priority rules purchase money fixture filing vs ordinary mortgage2

Priority Rules: Purchase Money Fixture Filing vs. Ordinary Mortgage

.

§334(d). A purchase money security interest in fixtures has priority over an earlier-recorded mortgage if the fixture filing is made before 20 days after the goods become fixtures

Goods

Purchase money

fixture filing

Mortgage 1

Real estate

20 days

Goods

become

fixtures


Priority rules purchase money fixture filing vs ordinary mortgage3

Priority Rules: Purchase Money Fixture Filing vs. Ordinary Mortgage

.

§334(d). A purchase money security interest in fixtures has priority over an earlier-recorded mortgage if the fixture filing is made before 20 days after the goods become fixtures

Goods

Purchase money

fixture filing

Mortgage 1

Real estate

20 days

Goods

become

fixtures

Purchase money

fixture filing has priority

over the mortgage


Priority rules fixture filing vs construction mortgage

Priority Rules: Fixture Filing vs. Construction Mortgage

.


Priority rules fixture filing vs construction mortgage1

Priority Rules: Fixture Filing vs. Construction Mortgage

.

  • §334(h). [A construction mortgage has priority over a fixture filing] (unless the fixture filing is prior in time, §334(e)), if

  • The construction mortgage is recorded before the goods become fixtures and

  • The goods become fixtures before the completion of construction.


Priority rules fixture filing vs construction mortgage2

Priority Rules: Fixture Filing vs. Construction Mortgage

.

  • §334(h). [A construction mortgage has priority over a fixture filing] (unless the fixture filing is prior in time, §334(e)), if

  • The construction mortgage is recorded before the goods become fixtures and

  • The goods become fixtures before the completion of construction.

End

construction

Affixing

Construction

mortgage


Priority rules fixture filing vs construction mortgage3

Priority Rules: Fixture Filing vs. Construction Mortgage

.

  • §334(h). [A construction mortgage has priority over a fixture filing] (unless the fixture filing is prior in time, §334(e)), if

  • The construction mortgage is recorded before the goods become fixtures and

  • The goods become fixtures before the completion of construction.

PMSI

End

construction

Affixing

Construction

mortgage

This PMSI is subordinate


Priority rules fixture filing vs construction mortgage4

Priority Rules: Fixture Filing vs. Construction Mortgage

.

  • §334(h). [A construction mortgage has priority over a fixture filing (unless the fixture filing is prior in time, §334(e))], if

  • The construction mortgage is recorded before the goods become fixtures and

  • The goods become fixtures before the completion of construction.

End

construction

Affixing

Construction

mortgage


Priority rules fixture filing vs construction mortgage5

Priority Rules: Fixture Filing vs. Construction Mortgage

.

  • §334(h). [A construction mortgage has priority over a fixture filing (unless the fixture filing is prior in time, §334(e))], if

  • The construction mortgage is recorded before the goods become fixtures and

  • The goods become fixtures before the completion of construction.

Fixture filing

PMSI

End

construction

Affixing

Construction

mortgage

This fixture filing is prior, §334(e)


Secured transactions assignments 20 and 33

Problem 33.3, page 553

.


Secured transactions assignments 20 and 33

Problem 33.3, page 553

  • Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing

.


Secured transactions assignments 20 and 33

Problem 33.3, page 553

  • Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing

  • Debtor files bankruptcy

.


Secured transactions assignments 20 and 33

Problem 33.3, page 553

  • Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing

  • Debtor files bankruptcy

  • Is Folds perfected?

.


Secured transactions assignments 20 and 33

Problem 33.3, page 553

  • Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing

  • Debtor files bankruptcy

  • Is Folds perfected?

  • §9-501(a). [T]he office in which to file a financing statement . . . is . . . the office of the Secretary of State in all other cases, including a case in which the collateral is goods that are . . . fixtures and the financing statement is not filed as a fixture filing.

.


Secured transactions assignments 20 and 33

Problem 33.3, page 553

  • Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing

  • Debtor files bankruptcy

  • Is Folds perfected?

  • §9-501(a). [T]he office in which to file a financing statement . . . is . . . the office of the Secretary of State in all other cases, including a case in which the collateral is goods that are . . . fixtures and the financing statement is not filed as a fixture filing.

  • Between TIB and Folds, who has priority?

.


Secured transactions assignments 20 and 33

Problem 33.3, page 553

  • Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing

  • Debtor files bankruptcy

  • Is Folds perfected?

  • §9-501(a). [T]he office in which to file a financing statement . . . is . . . the office of the Secretary of State in all other cases, including a case in which the collateral is goods that are . . . fixtures and the financing statement is not filed as a fixture filing.

  • Between TIB and Folds, who has priority?

  • §9-334(e)(3). A perfected security interest in fixtures has priority over a conflicting interest . . . obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this article.

.


Secured transactions assignments 20 and 33

Problem 33.3, page 553

  • Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing

  • Debtor files bankruptcy

  • Is Folds perfected?

  • §9-501(a). [T]he office in which to file a financing statement . . . is . . . the office of the Secretary of State in all other cases, including a case in which the collateral is goods that are . . . fixtures and the financing statement is not filed as a fixture filing.

  • Between TIB and Folds, who has priority? Folds

  • §9-334(e)(3). A perfected security interest in fixtures has priority over a conflicting interest . . . obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this article.

.


Secured transactions assignments 20 and 33

Problem 33.3, page 553

1. Folds sells fixture (mobile home) perfects by non-fixture filing

Folds

perfects

Goods

Real estate

Goods

become

fixtures


Secured transactions assignments 20 and 33

Problem 33.3, page 553

1. Folds sells fixture (mobile home) perfects by non-fixture filing

2. Commercial Finance perfects by a fixture filing

Folds

perfects

Goods

Commercial

perfects

Real estate

Goods

become

fixtures


Secured transactions assignments 20 and 33

Problem 33.3, page 553

1. Folds sells fixture (mobile home) perfects by non-fixture filing

2. Commercial Finance perfects by a fixture filing

3. Debtor files bankruptcy

Folds

perfects

Goods

Commercial

perfects

Debtor bankruptcy

Real estate

Goods

become

fixtures


Secured transactions assignments 20 and 33

Problem 33.3, page 553

1. Folds sells fixture (mobile home) perfects by non-fixture filing

2. Commercial Finance perfects by a fixture filing

3. Debtor files bankruptcy

As between Folds and Commercial, who is first?

Folds

perfects

Goods

Commercial

perfects

Debtor bankruptcy

Real estate

Goods

become

fixtures


Secured transactions assignments 20 and 33

Problem 33.3, page 553

1. Folds sells fixture (mobile home) perfects by non-fixture filing

2. Commercial Finance perfects by a fixture filing

3. Debtor files bankruptcy

As between Folds and Commercial, who is first? Neither §9-334(c) or (e)(1) apply because a secured party is not an “encumbrancer . . . of the related real property.” Folds wins under §9-322(a)(1).

Folds

perfects

Goods

Commercial

perfects

Debtor bankruptcy

Real estate

Goods

become

fixtures


Secured transactions assignments 20 and 33

Problem 33.3, page 553

Is the holder of a security interest an “encumbrancer?” No.

Folds

perfects

Goods

Commercial

perfects

Debtor bankruptcy

Real estate

Goods

become

fixtures


Secured transactions assignments 20 and 33

Problem 33.3, page 553

Is the holder of a security interest an “encumbrancer?” No.

§9-102(a)(32). “Encumbrance” means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property.

Folds

perfects

Goods

Commercial

perfects

Debtor bankruptcy

Real estate

Goods

become

fixtures


Secured transactions assignments 20 and 33

Problem 33.3, page 553

Is the holder of a security interest an “encumbrancer?” No.

§9-102(a)(32). “Encumbrance” means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property.

§9-102(a)(52). “Lien creditor” means . . . a creditor that has acquired a lien on the property involved by . . . levy . . . or the like.

Folds

perfects

Goods

Commercial

perfects

Debtor bankruptcy

Real estate

Goods

become

fixtures


Secured transactions assignments 20 and 33

Problem 33.5, page 554

a.Sound City plans to install a sound system. No remodeling. Wants to rip the system out if buyer doesn’t pay.

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

a.Sound City plans to install a sound system. No remodeling. Wants to rip the system out if buyer doesn’t pay.

1. Will Sound City be entitled to a mechanic’s lien? Page 537.

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

a.Sound City plans to install a sound system. No remodeling. Wants to rip the system out if buyer doesn’t pay.

1. Will Sound City be entitled to a mechanic’s lien? Page 537.

Who must authorize the work?

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

a.Sound City plans to install a sound system. No remodeling. Wants to rip the system out if buyer doesn’t pay.

1. Will Sound City be entitled to a mechanic’s lien? Page 537.

Who must authorize the work?

New York Lien Law §3, page 537: A contractor . . . who performs services or furnishes materials . . . at the request of the owner . . . or his agent . . . shall have a lien . . . .

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

a.Sound City plans to install a sound system. No remodeling. Wants to rip the system out if buyer doesn’t pay.

1. Will Sound City be entitled to a mechanic’s lien? Page 537.

Who must authorize the work?

New York Lien Law §3, page 537: A contractor . . . who performs services or furnishes materials . . . at the request of the owner . . . or his agent . . . shall have a lien . . . .

§2. The term “owner” . . . includes . . . a lessee for a term of years . . . .

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

a.Sound City plans to install a sound system. No remodeling. Wants to rip the system out if buyer doesn’t pay.

1. Will Sound City be entitled to a mechanic’s lien? Page 537.

Who must authorize the work?

New York Lien Law §3, page 537: A contractor . . . who performs services or furnishes materials . . . at the request of the owner . . . or his agent . . . shall have a lien . . . .

§2. The term “owner” . . . includes . . . a lessee for a term of years . . . .

2. Will a mechanic’s lien entitle Sauls to rip the system out?

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

a.Sound City plans to install a sound system. No remodeling. Wants to rip the system out if buyer doesn’t pay.

1. Will Sound City be entitled to a mechanic’s lien? Page 537.

Who must authorize the work?

New York Lien Law §3, page 537: A contractor . . . who performs services or furnishes materials . . . at the request of the owner . . . or his agent . . . shall have a lien . . . .

§2. The term “owner” . . . includes . . . a lessee for a term of years . . . .

2. Will a mechanic’s lien entitle Sauls to rip the system out?

Right to foreclose, no right to remove.

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

  • Does Sound City need the land owner’s signature for a fixture filing?

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

  • Does Sound City need the land owner’s signature for a fixture filing?

  • No, §9-203(b)(3), §9-509(b). Just the “debtor.”

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

  • Does Sound City need the land owner’s signature for a fixture filing?

  • No, §9-203(b)(3), §9-509(b). Just the “debtor.”

  • Will a fixture filing give Sound City the right to remove?

  • §9-604(c). If a secured party . . . has priority over all owners and encumbrancers . . . the secured party, after default, may remove the collateral.

  • §9-334(d). A perfected security interest in fixtures has priority over . . . encumbrancer or owner . . . if . . . the debtor is in possession of the real estate and [the] purchase money security interest is perfected within 20 days . . . .

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

  • Does Sound City need the land owner’s signature for a fixture filing?

  • No, §9-203(b)(3), §9-509(b). Just the “debtor.”

  • Will a fixture filing give Sound City the right to remove? Yes.

  • §9-604(c). If a secured party . . . has priority over all owners and encumbrancers . . . the secured party, after default, may remove the collateral.

  • §9-334(d). A perfected security interest in fixtures has priority over . . . encumbrancer or owner . . . if . . . the debtor is in possession of the real estate and [the] purchase money security interest is perfected within 20 days . . . .

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

c.Sound City plans to install the sound system in a building presently under construction. Will a fixture filing give Sound City the right to repossess after default?

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

c.Sound City plans to install the sound system in a building presently under construction. Will a fixture filing give Sound City the right to repossess after default?

§9-334(h). A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land . . . if a recorded record of the mortgage so indicates. . . .

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

c.Sound City plans to install the sound system in a building presently under construction. Will a fixture filing give Sound City the right to repossess after default?

§9-334(h). A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land . . . if a recorded record of the mortgage so indicates. . . . [A] security interest in fixtures is subordinate to a construction mortgage if the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction.

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

c.Sound City plans to install the sound system in a building presently under construction. Will a fixture filing give Sound City the right to repossess after default?

§9-334(h). A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land . . . if a recorded record of the mortgage so indicates. . . . [A] security interest in fixtures is subordinate to a construction mortgage if the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction.

Would Dub’s consent in writing to removal in the event of default be of help? §9-334(f).

.


Secured transactions assignments 20 and 33

Problem 33.5, page 554

c.Sound City plans to install the sound system in a building presently under construction. Will a fixture filing give Sound City the right to repossess after default?

§9-334(h). A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land . . . if a recorded record of the mortgage so indicates. . . . [A] security interest in fixtures is subordinate to a construction mortgage if the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction.

Would Dub’s consent in writing to removal in the event of default be of help? §9-334(f).

Not unless Dub’s had a right to remove in its lease. The construction mortgage holder’s consent is needed.

.


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