Lesson 46: Fixture Filings

Welcome to Lesson 46 of our instructable on Secured Transactions and Real Property. In this lesson, we will delve into the concept of Fixture Filings, a critical aspect of secured transactions involving real property.

What is a Fixture?

A fixture is personal property that has been affixed to real estate in such a way that it becomes part of the real property. Examples include air conditioning units, built-in cabinets, and lighting fixtures. For a humorous dive into property law, check out this book.

Fixture Filings under UCC Article 9

Under the Uniform Commercial Code (UCC) Article 9, a fixture filing is a financing statement filed in the real property records to perfect a security interest in goods that become fixtures.

Requirements for a Valid Fixture Filing

To be effective, a fixture filing must:

  • Contain the name of the debtor
  • Contain the name of the secured party
  • Indicate that it covers fixtures
  • Provide a description of the real property
  • Be filed in the office where a mortgage on the real property would be filed

Priority Issues Involving Fixtures

Understanding the priority rules is crucial when dealing with fixtures. The general priority rule is that a fixture filing has priority over the interests of an encumbrancer or owner of the related real property if it is properly filed before the encumbrancer's interest is perfected.

Diagram: Priority of Fixture Filings

graph LR A["Fixture Filing"] --> B["Real Property"] C["Secured Party"] --> A D["Encumbrancer"] --> B E["Priority Rule"] -.-> B

Conclusion

Fixture filings are a vital part of securing interests in goods that become fixtures attached to real property. Proper filing ensures priority over conflicting claims, which can be complex depending on various rules and exceptions.

For more detailed insights, you may also refer to our lessons on Filing a Financing Statement and General Priority Rules under UCC Article 9.

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