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11 Cards in this Set

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Real Estate Recording System v. UCC Filing System

Real Estate Recording System: Adds documents, never removes; Mortgage and Satisfaction of Mortgage

UCC Filing System: May physically destroy documents after six years: Financing Statement, Termination Statement (Auto terminates at 5 Years); Continuation statement (5 Year Intervals)


What is Temporary Automatic Perfection: Rule



General Rule: perfection by possession continues only while the secured party retains possession.

Exception: Secured party who makes goods available for ultimate sale remains perfected for 20 days.


Sale exception to Possession as a Method for Perfection


§9-312(f) A perfected security interest in a negotiabledocument or goods in the possession ofa bailee . . . remains perfected for 20 days without filing if the secured partymakes availableto the debtor the goods or documents representing the goods for the purpose of

(1) ultimate sale or exchange; or

(2) . . . otherwise dealing with them . . .preliminary to their sale or exchange.


Do secured party's have to reply to requests for information?


§9-210(b). [A] secured party . . . shall comply with a request within 14 daysafter receipt:

(2) in thecase of a request regarding a list of collateral or a request regarding a statementof account, by authenticating and sending to the debtor an approval or correction.Thisis the only (non-contract) obligation for secured to furnish information.

Onlythe debtor may make a request.

The debtorcan request on behalf of the searcher.


What is Naked Possession?

The legal right to control is not determinative of possession. The observable fact of physical control so overwhelms the legal right to control that we think most courts would say that possession has passed. Naked Possession.


Fixture Rules

When a fixture becomes complemental to real property, it becomes a permanent accession and the fixture becomes part of the security with regard to any existing mortgage. The language regarding after acquired fixtures is sufficient to create and perfect.

A mortgage covers fixtures even when they are not explicitly mentioned in the mortgage.


How is the bankruptcy stay impacted by continuation requirements?



§362(b)(3). The filing of a petition . . . does not operate as a stay. . . of any act to perfect, or tomaintain or continue the perfection . . . to the extent that the trustee s rights. . . are subjectto such perfection under section 546(b) . . .

§546(b)(1)(B). The rights . . . of a trustee . . . are subject to anygenerally applicable law that. . . provides for the . . . continuationof perfection of an interest in property to be effectiveagainst an entity that acquires rights . . . before the date on which action istaken to effectsuch . . . continuation.


Is the existence of the initial security agreement enough for future financing statements permission?


No; 9-509(b). By authenticating . . . a security agreement,a debtor . . . authorizes the filing of an initialfinancing statement . . . covering the collateral described . . . .”


How to overcome continuance statement?


Perfect via different methods;

§9-308(c).“A security interest . . . is perfected continuously if it isoriginallyperfected by one method under this article and is later perfected byanothermethod under this article, without an intermediate period when it wasunperfected.”


Conflicted perfected security interests priority?


§9-322(a)(1). Conflicting perfected security interests . . . rank according to priority intime of filing or perfection. Priority dates from the earlier of the time a filing coveringthe collateral is first made or the security interest . . . is first perfected . . . .


Continuation pattern: by continuation date or original file date?


Follows every 6 years from the initial filing date, not the new continuation date (if filed a little early).