6. Fixtures

Question 1

What is Fixture?

Answer 1

Personal property attached to real estate
Interest arises under real property law

E.g. central air conditioning, elevators

Question 2

What is NOT fixture?

Answer 2

Ordinary building materials
Incorporated into improvement on land

E.g. bricks, lumber

Question 3

What is required for perfection of fixtures?

Answer 3

Fixture filing in office where mortgage filed
Financing statement must reasonably identify real estate
Financing statement must identify owner’s name

UNLESS => NO financing statement required

• Readily movable factory/office machines
• Readily movable equipment

Question 4

When is perfection of fixtures NOT required?

Answer 4

Owner consented to security interest in authenticated record
Owner disclaimed interest
Debtor had right to remove against claimant

Question 5

What happens if Debtor defaults?

Answer 5

Repossession of fixtures

Question 6

What is the rule for priority of secured parties?

Answer 6

1) Buyer in ordinary course of business
2) PMSI (perfected before goods became fixtures)
3) Prior real estate interest
4) Secured Party (Perfected/Lien Creditor/Unperfected)
5) Subsequent real estate interest