3. Perfection Flashcards
What is perfection?
Maximise secured party’s rights over collateral against other third parties
What is required for perfection?
1) Attachment
2) Perfection
What is required for perfection of intangibles?
By control
What is required for perfection of consumer goods/fixtures?
PMSI
- Automatic perfection
NO PMSI
- Filing financing statement
What is required for perfection of motor vehicles?
Notation on certificate of title
What is required for perfection of all collateral?
Filing financing statement
Taking possession (pledge)
What is required for filing financing statements?
1) Debtor’s name + address
- Unexpired driver’s licence/Most recent public organic record
- NOT seriously misleading error
- Seriously misleading error + Discoverable under filing office standard search logic
2) Secured party’s name + address
3) Collateral description
- Category/Type
- Specific
- Supergeneric
- Real property (Description + Name)
4) Debtor’s authentication
5) Filing with Secretary of State
- In writing
- Electronically
What are the consequences of amending financing statements?
Dated from date of filing amendment (no extensions)
What is required for perfection of changed collateral?
Filing financing statement
How long are financing statements effective?
5 years
When may secured party file termination statement?
No further obligations/advances/value to be provided
Discharge obligations (chattel paper/accounts)
PMSI goods not in Debtor’s position
Debtor not authorised to file financing statement
What is required for secured party to file termination statement?
File within 20 days after receiving Debtor’s authenticated demand to terminate statement
File within 1 month after no obligations required (consumer goods)
What are the consequences of filing termination statements?
Terminates financing statement’s effect
What is required for perfection of proceeds?
Temporary perfection (20 days)
Perfection beyond 20 days
- Identifiable cash proceeds (cash proceeds rule)
- File financing statement within 20 days
- Originally perfected + would be perfected by filing in same office + purchased not with cash proceeds (same office rule)
When is perfected proceeds dated?
Same date as original collateral (relate back)
