Fixtures and Accessions

Question 1

Fixture

Answer 1

• 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.)

Question 2

Fixtures and Priority

Answer 2

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)

Question 3

When fixture filing not necessary

Answer 3

1. Factory or office machines
2. Equipment that is not pirmarily used or leased for use in the operation of real estate, or
3. Replacement of domestic appliances which are consumer goods.
   - Any method of perfection before such goods become fixtures entitles the secured party to priority.

Question 4

Accessions

Answer 4

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 )

Question 5

Removal of Accession

Answer 5

• 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.