What a UCC filing attaches to
Most financing statements are not in the land records at all, and the few that are got there for one of four reasons. A UCC that turns up in a property search is a narrow kind of filing, and the ones that do not turn up are the majority.
One session, published twice. The written version below follows the recording as it plays. Click any line to jump the film to it.
0:23It is filed against a person, not against a lot
Start with how it's filed. It's filed against a person, and the index is built around that name.
A financing statement perfects a security interest in personal property. UCC 9-502 sets out what it has to contain, and the list is short. The debtor's name, the secured party's name, and an indication of the collateral.
Notice what isn't in that list. No parcel identifier. And UCC 9-519 requires the filing office to index an initial financing statement according to the name of the debtor, and to associate every later record with the initial one.
So the index is built around a name. Searching a lot will not find it. And that is a completely different failure from finding nothing.
1:10The four that go in the land records
Now, the four that do go in the land records.
UCC 9-501, subsection A, names the exceptions, and there are exactly four.
A financing statement goes to the office where a mortgage on the related real property would be recorded when the collateral is as-extracted collateral. When it's timber to be cut. When the statement is filed as a fixture filing and the collateral is goods that are, or will become, fixtures. Or when the collateral is a co-operative interest. Everything else goes to the secretary of state.
And subsection A, paragraph 2, closes the gap you'd otherwise walk through. Where the collateral is fixtures but the statement wasn't filed as a fixture filing, it goes to the secretary of state like anything else. So the collateral doesn't decide the office. The kind of filing does.
In New York the recording officer is the county clerk. Except in the Bronx, Kings, New York and Queens, where nine dash five oh one, subsection C, makes it the city register.
2:23What that means for a search of a parcel
So what does that mean for a search of a parcel.
A UCC in a property index is evidence about the property. A UCC absent from one is evidence about nothing.
Your debtor may have a dozen financing statements against equipment, inventory and receivables. Every one of them properly filed, and not one of them visible in any land record. Finding none in a parcel search tells you only that none of the four categories applied. Which is the ordinary case.
A fixture filing is the one to read carefully when it does appear, because it's a claim on something that's part of the building. It's also the one most likely to be stale, for the reason I'm about to give you.
3:13Five years, and then it is gone
5 years, and then it's gone.
UCC 9-515, subsection A, makes a filed financing statement effective for 5 years from the date of filing. Subsection C does the rest of the work.
On lapse, the statement ceases to be effective, and any security interest perfected by it becomes unperfected, unless it's perfected some other way. And then the sentence to remember. If it becomes unperfected on lapse, it's deemed never to have been perfected, as against a purchaser of the collateral for value.
Never to have been perfected. Read that one twice.
A continuation may be filed, but only within the 6 months before expiry, under nine dash 20, subsection D. So a financing statement from 2015 with nothing after it has stopped. Age has nothing to do with it.
Three exceptions carry longer clocks. Public-financed and manufactured-home transactions run 30 years where the statement says so. A co-operative interest runs 50 years where a co-operative addendum is filed. And a transmitting utility's filing runs until a termination statement is filed.
4:34When the mortgage is itself the filing
Then there's the case where the mortgage is itself the filing, and this one is easy to miss.
UCC 9-502, subsection C, allows a record of a mortgage to operate as a financing statement filed as a fixture filing. And nine dash 20, subsection G, gives that arrangement its own duration.
Such a record stays effective as a fixture filing until the mortgage is released or satisfied of record, or its effectiveness otherwise ends as to the real property. No 5 year clock. No continuation statements.
So a document indexed as a mortgage may be doing two jobs, and the second one is invisible unless somebody reads the instrument. Counting it once as a mortgage is right. Concluding there's no fixture claim because no separate UCC appears is not.
5:32What this does not cover
Here's what I'm not
Priority among competing security interests. Which is most of article nine, and none of this.
Fla. Stat. 679.3171, and its New York counterpart, set out who takes free of a security interest and who takes ahead of it. Those answers turn on purchase money status, control, possession, and the order of perfection. None of that is readable from an index entry. And a filing that exists isn't the same as a filing that wins.
I'm not a lawyer and none of this is advice. Whether a particular financing statement reaches a particular asset is a question for counsel, with the security agreement in front of them.
What I can tell you is narrower. Which office to look in. And that the one you're looking in holds four kinds of filing, out of all the kinds there are.
If a fixture filing turns up against a parcel you're working, read the instrument before you count it. And the co-op piece covers the one filing in article nine that runs for 50 years instead of five.