Fixtures and Accessions Flashcards
Fixture
- Not defined in the code
- Under GA Law, personalty attached to real estate with the intent that it become a permanent party of the real estate is a fixture (e.g. central ac, built in appliances, elevators, etc.)
Fixtures and Priority
Generally, first party to file a fixture filing or record its real property interest has priority.
Exception: PMSI secured party who makes Article 9 Fixture Filing within 20 days after attachment/installation will prevail over real property interest. (Exception: Doesn’t apply to construction mortgages)
When fixture filing not necessary
- Factory or office machines
- Equipment that is not pirmarily used or leased for use in the operation of real estate, or
- Replacement of domestic appliances which are consumer goods.
- Any method of perfection before such goods become fixtures entitles the secured party to priority.
Accessions
Goods that are physically united with other goods in such a manner that the identity of the original goods is NOT lost. (e.g., pedals on a bike) Usually, the rule for priority is first to file or perfect, PMSI superiority.
Exception: “Notation on a certificate of title” - If notation on title present in the originally perfected SI, the accession becomes part of the whole (e.g., bank has SI on car that gets a new transmission -finance company loans money for new transmission - bank still has priority on the car )
Removal of Accession
- A SP may remove an accession from other goods if the SI in the accession has priority over the claims of every person having an interest in the whole
- SP removing is responsible for the cost of repair of any physical injury to the whole or other goods.
- A person entitled to reimbursement may refuse permission to remove until the secured party give adequate assurance for the performance of the obligation to reimburse.