Perfection of Security Interests Flashcards
What are the five methods of perfection?
(i) filing, (ii) taking possession of the collateral, (iii) control, (iv) automatic perfection, and (v) temporary perfection.
When must perfection occur?
Only after attachment. If perfection occurs before attachment, it will only come into effect after attachment.
What is required for perfection by filing?
The secured party must file a financing statement that contains: (i) the debtor’s name and mailing address, (ii) the secured party’s name and mailing address, (iii) an indication of the collateral covered by the financing statement, and (iv) if the financing statement covers real property-related collateral, a description of the related real property, the name of the record owner, and an indication that it is to be filed in the real property records.
Where is a filing filed?
- Centrally in the office of the secretary of state. 2. Timber, minerals, and fixtures must be filed in the county where a mortgage on real estate is filed.
How long are filings good for?
Five years.
What interests cannot be perfected by possession (pledge)?
(i) general intangibles, (ii) non-consumer deposit accounts, (iii) nonnegotiable documents, (iv) electronic chattel paper, (v) certificate of title goods, and (vi) accounts.
When is perfection by possession attained?
At the moment of possession and for as long as possession is retained.
When is perfection automatic?
When the security interest is a PMSI and it is in a consumer good.
For how long is a filing statement effective?
5 Years.
When is perfection automatic?
- PMSI in consumer goods, unless it’s a motor vehicle
- Small-scale assignment of accounts of payment intangibles
- Sales of payment intangibles or promissory notes
- Beneficial interest in a decedent’s estate
- Investment Property
What happens if a financing statement contains seriously misleading errors?
It is ineffective.
