Secured Transactions Assignments 20 and 33

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 . . . Real Personal

Property lies along a continuum from real to personal . . . Land Real Intermediate Chattels Personal

Real estate law “Fixtures” 9-102(a)(41) Land Real Intermediate Chattels Personal 9-334(b) Real estate law governs goods sufficiently related to real estate to be a “fixture” under real estate law.

Real estate law “Fixtures” 9-102(a)(41) 9-334(a) Land Real Intermediate Chattels Personal 9-334(b) UCC Article 9 UCC Article 9 permits the attachment and perfection of security interests in “goods, including fixtures.”

Real estate law “Fixtures” 9-102(a)(41) 9-334(a) Land Real “Ordinary building materials” Intermediate Chattels Personal 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.”

Real estate law “Fixtures” 9-102(a)(41) 9-334(a) “Trade fixtures” Land Real “Ordinary building materials” Intermediate Intermediate Chattels Personal 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.

Real estate law “Fixtures” 9-102(a)(41) 9-334(a) “Trade fixtures” Land Real “Ordinary building materials” Intermediate Chattels Personal 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

Real estate law “Fixtures” 9-102(a)(41) 9-334(a) “Trade fixtures” Land Real “Ordinary building materials” Intermediate Chattels Personal “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

Real estate law “Fixtures” 9-102(a)(41) 9-334(a) “Trade fixtures” Land Real “Ordinary building materials” Intermediate Chattels Personal 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)

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 Financing statements filed against fixtures, 9-501(a)(2). Financing statements against collateral, including fixtures, of a transmitting utility.

Real estate recording system Mortgages Article 9 filing system Financing statements

Real estate recording system Mortgages Financing statements filed as fixture filings, §9-502(b) Article 9 filing system Financing statements

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

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).

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.

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)

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)

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)

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)

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]

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

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

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 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

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

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.

Parcel of land with virgin growth of walnut trees? Are the trees fixtures? Maybe “timber to be cut,” (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))

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))

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))

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))

Parcel of land with virgin growth of walnut trees? Are the trees fixtures? Maybe “timber to be cut,” (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)) Secured Lend- ing Partners Promissory note 2 and security interest in the mortgage Promissory note 1 and mortgage Pacific Interests Mark IV Partners

Parcel of land with virgin growth of walnut trees? Are the trees fixtures? Maybe “timber to be cut,” (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)) Secured Lend- ing Partners Does Article 9 apply? §9-109(b) Promissory note 2 and security interest in the mortgage Promissory note 1 and mortgage Pacific Interests Mark IV Partners

Parcel of land with virgin growth of walnut trees? Are the trees fixtures? Maybe “timber to be cut,” (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)) Secured Lend- ing Partners Promissory note 2 and security interest in the mortgage Promissory note 1 and mortgage Pacific Interests Mark IV Partners

Parcel of land with virgin growth of walnut trees? Are the trees fixtures? Maybe “timber to be cut,” (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)) Secured Lend- ing Partners Promissory note 2 and security interest in the mortgage Promissory note 1 and mortgage Pacific Interests Mark IV Partners

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

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 Interests Pacific Cellular Inc. Farmer

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 Interests Stock Pacific Cellular Inc. Farmer

What does Pacific Interests own? How do we perfect a security interest in stock? Pacific Interests Stock Pacific Cellular Inc. Farmer

What does Pacific Interests own? How do we perfect a security interest in stock? We also want the tower. Is it a fixture? Pacific Interests Stock Pacific Cellular Inc. Farmer

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?” Pacific Interests Stock Pacific Cellular Inc. Farmer

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? Pacific Interests Stock Pacific Cellular Inc. Farmer

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 Pacific Interests Stock Pacific Cellular Inc. Farmer

Problem 20.1, page 357 Fixture Not fixture Transmitting utility
How do we perfect in the tower if: Pacific Interests Fixture Not fixture Transmitting utility Not transmitting utility Stock Pacific Cellular Inc. Farmer

How do we perfect in the tower if: Pacific Interests Fixture Not fixture Transmitting utility State UCC §9-501(b) Not transmitting utility Stock Pacific Cellular Inc. Farmer

How do we perfect in the tower if: Pacific Interests Fixture Not fixture Transmitting utility State UCC §9-501(b) Not transmitting utility Fixture filing in RE records 9-501(a)(1) Stock Pacific Cellular Inc. Farmer

How do we perfect in the tower if: Pacific Interests Fixture Not fixture Transmitting utility State UCC §9-501(b) Not transmitting utility Fixture filing in RE records 9-501(a)(1) State UCC §9-501(a)(2) Stock Pacific Cellular Inc. Farmer

How do we perfect in the tower if: Pacific Interests Fixture Not fixture Transmitting utility State UCC §9-501(b) Not transmitting utility Fixture filing in RE records 9-501(a)(1) State UCC §9-501(a)(2) Stock Pacific Cellular Inc. What do we file? Farmer

How do we perfect in the tower if: Pacific Interests Fixture Not fixture Transmitting utility State UCC §9-501(b) Not transmitting utility Fixture filing in RE records 9-501(a)(1) State UCC §9-501(a)(2) 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

Natural gas pipeline that runs through 119 counties in four states? Transmitting utility? Yes (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.

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

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.

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.

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.

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.

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 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 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 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

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

§334(e). First to file (in the real property records). In context, that means the mortgage will nearly always win:

§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

§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

§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

§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 Goods become fixtures 20 days

§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 Goods become fixtures 20 days Purchase money fixture filing has priority over the mortgage

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.

§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

§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

§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

§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 .

Problem 33.3, page 553 Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing .

Problem 33.3, page 553 Folds sells mobile home that is a fixture, takes SI, makes a non-fixture filing Debtor files bankruptcy .

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? .

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. .

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? .

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. .

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. .

Problem 33.3, page 553 1. Folds sells fixture (mobile home) perfects by non-fixture filing Folds perfects Goods Real estate Goods become fixtures

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

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

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

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

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

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

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

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. .

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. .

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? .

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 .

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 .

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? .

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. .

Problem 33.5, page 554 Does Sound City need the land owner’s signature for a fixture filing? .

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.” .

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 .

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 .

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? .

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 .

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. .

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). .

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. .

Secured Transactions Assignments 20 and 33

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Secured Transactions Assignments 20 and 33

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