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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

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)


Real estate recording

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


Real estate recording

recording system

Mortgages

Article 9 filing system

Financing statements

Separate Filing Systems


Real estate recording

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

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


Real estate recording

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

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: recording§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: recording§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: recording§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: recording§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: recording§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: recording§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: recording§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: recording§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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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 recording

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).


Problem 20.1, page 357 recording

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?


Problem 20.1, page 357 recording

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 recording

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 recording

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. recordingOrdinary Mortgage

.


Priority rules fixture filing vs ordinary mortgage1
Priority Rules: Fixture Filing vs. recordingOrdinary Mortgage

.

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


Priority rules fixture filing vs ordinary mortgage2
Priority Rules: Fixture Filing vs. recordingOrdinary 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. recordingOrdinary 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. recordingOrdinary 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 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 mortgage1
Priority Rules: Fixture Filing vs. Construction Mortgage 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 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 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 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 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)



Problem 33.3, page 553 Mortgage

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

.


Problem 33.3, page 553 Mortgage

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

  • Debtor files bankruptcy

.


Problem 33.3, page 553 Mortgage

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

  • Debtor files bankruptcy

  • Is Folds perfected?

.


Problem 33.3, page 553 Mortgage

  • 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.

.


Problem 33.3, page 553 Mortgage

  • 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?

.


Problem 33.3, page 553 Mortgage

  • 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.

.


Problem 33.3, page 553 Mortgage

  • 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.

.


Problem 33.3, page 553 Mortgage

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

Folds

perfects

Goods

Real estate

Goods

become

fixtures


Problem 33.3, page 553 Mortgage

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


Problem 33.3, page 553 Mortgage

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


Problem 33.3, page 553 Mortgage

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


Problem 33.3, page 553 Mortgage

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


Problem 33.3, page 553 Mortgage

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

Folds

perfects

Goods

Commercial

perfects

Debtor bankruptcy

Real estate

Goods

become

fixtures


Problem 33.3, page 553 Mortgage

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


Problem 33.3, page 553 Mortgage

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


Problem 33.5, page 554 Mortgage

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

.


Problem 33.5, page 554 Mortgage

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.

.


Problem 33.5, page 554 Mortgage

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?

.


Problem 33.5, page 554 Mortgage

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 . . . .

.


Problem 33.5, page 554 Mortgage

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 . . . .

.


Problem 33.5, page 554 Mortgage

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?

.


Problem 33.5, page 554 Mortgage

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.

.


Problem 33.5, page 554 Mortgage

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

.


Problem 33.5, page 554 Mortgage

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

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

.


Problem 33.5, page 554 Mortgage

  • 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 . . . .

.


Problem 33.5, page 554 Mortgage

  • 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 . . . .

.


Problem 33.5, page 554 Mortgage

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?

.


Problem 33.5, page 554 Mortgage

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. . . .

.


Problem 33.5, page 554 Mortgage

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.

.


Problem 33.5, page 554 Mortgage

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).

.


Problem 33.5, page 554 Mortgage

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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