Florida Secured Transactions
Terms in this set (12)
SI Perfection, general place of filing FS
M: general rule that most FS must be filed with state's SoS
F: most FS must be filed with:
FL Secured Transaction Registry
SI Perfection, filing FS for timber, minerals, fixtures
M: Under UCC, filing is in office where mortgage on property would be filed if collateral is:
- timber to be cut or minerals, or
- is to become fixture and filing is fixture filing
F: filing is with office of clerk of circuit court
M: goods that become so attached that interest arises under property law (built-in oven). Ordinary building minerals (like bricks) not considered to be fixtures.
Holder of SI in fixture vs. holder of SI in property to which fixture attached = first party to file fixture filing or record property interest prevails
PSMI secured party who makes fixture filing w/in 20 days after affixation prevails over property interest in same fixture recorded prior to affixation.
FL: SI in fixtures generally NOT valid against someone w/ conflicting interest in property unless:
1. SI perfected by making fixture filing AND
2. property interest arose AFTER either goods affixed or SI perfected, whichever occurred later
Perfected SI in fixtures has priority over conflicting interest in related property if:
(1) SI perfected pursuant to FL's certificate of title law;
(2) SI created in manufactured- home transaction;
(3) or party with property interest consented to SI or disclaimed interest in fixtures.
FL law provides no grace period to party w/ PSMI to make fixture filing
Priorities, readily removable collateral (fixtures)
M: UCC provides that security interest in fixture perfected in any manner authorized by the code before affixation has priority if it is readily removable.
F: provides no exception to the priority rules for readily removable collateral. Note, however, that easily removable goods might not qualify as fixtures under applicable law and thus would not conflict w/ real property interest.
Rights on default, retention of collateral in satisfaction of debt ("strict foreclosure")
M: Under UCC, foreclosing party can keep collateral after default to fully satisfy debt if debtor fails to make authenticated objection w/in 20 days after secure party sent notice
F: debtor consents to full strict foreclosure if fails to make authenticated objection w/in 30 days after secured party sends notice.
In consumer transactions, notice must say debtor will be deemed to have consented if he does not object
Rights on default, failure to comply w/ code default rules -- possible loss of deficiency judgment
M: UCC rebuttable presumption rule applies only to non-consumer transactions
Rebuttable presumption rule says value of collateral presumed to equal amount of debt unless secured party proves otherwise
F: rebuttal presumption rule applies to consumer AND non-consumer transactions. If secured party violates A9's default rules, value of collateral presumed to equal amount of debt unless secured party proves otherwise
Credit transactions. One party/debtor buys something on credit from another party/creditor or secured party but does not pay immediately.
Creditor takes SI in property/collateral of debtor, allowing creditor to take property if debtor fails to fulfill credit obligation
For SI to be effective, attachment must be taken
If debtor defaults, creditor has right to take property to satisfy obligation
Attachment generally does not provide creditor w/ rights against other parties who might also have interest in same collateral.
To maximize rights against such parties, creditor must take additional steps to PERFECT SI.
When more than 1 creditor has interest in same collateral, rules of priority determine whose interest is superior.
- Scope of UCC A9
- Dual status rule
- Tangible collateral or goods (consumer goods, inventory, farm products, equipment)
- Intangible or semi-intangible collateral (instruments, documents, chattel paper, accounts, deposit accounts, investment property, commercial tort claims, general intangibles)
Creation (attachment) of SI
A9 concerns secured party's rights against debtor and third parties.
>> Rights against debtor established by ATTACHMENT
>> Rights against 3rd parties established by PERFECTION
- Requisites for attachment:
>> description of collateral in authenticated security agreement
>> methods of obtaining control
>> non-consumer deposit accounts
>> electronic chattel paper
>> investment property (certificated securities, securities accounts)
>> rights and duties of secured party in possession or control
- Property that debtor acquired in future
>> after-acquired property
>> future advances
Perfection of security interest
Attachment establishes secured party's rights to collateral as against DEBTOR
But other parties can also have rights in collateral (subsequent purchasers, unsecured creditors, other priority creditors).
To acquire max priority in collateral over most such third parties, secured party must PERFECT
5 methods for perfection:
2. Taking possession of the collateral
4. Automatic perfection
5. Temporary perfection
- time of perfection
>> Perfection by filing
>> Perfection by taking possession (pledge)
>> Temporary perfection
>> Continuation of perfection of interest in proceeds
Priorities ("fight rules")
A9: allocation of priority among conflicting interests in same collateral.
>> Secured party vs. security party
>> Secured party vs. buyer or other transferee
>> Secured party vs. judicial lien creditor or holder of possessory lien
>> Secured party vs. A2 claimant
Priorities in a nutshell
Rights on default
A9 does not define events that trigger default, but agreement usually will define default to include events. Default on an ag lien determined by lien statute.
>> Right to take possession and sell collateral
>> Other rights of secured party on default
>> Remedies are cumulative
Which state's law govern perfection important when SI perfected by filing (filing must occur in proper state)
General rule: law of state where debtor located generally governs perfection of SI
- Individual = state of principal residence
- Registered organization (corporation, LLC, or LP) = state under whose laws it is organized (where article of incorporation filed)
- Unreg organization (GP) = place of business (if it only has one place of business) OR chief executive office (if it has more than 1 place of business)
>> Movement of debtor or collateral from one state to another
- collateral in which perfection is governed by debtor's location
- other collateral