Fixtures

1

• Chapter 5
• Fixtures

2
Fixtures

• Degree of annexation
• Nature and use of property
• Relationship to property
• Relationship between annexor and premises
• Intent
• Issue of trade fixtures
• Who wants to know?

3
Fixture Analysis

• Figure 5.1

4
Attachments

• Fructus naturales
• Trees, bushes, grasses, etc.
• Fructus industriales
• Treated not as attachments but as personal
  property

5
Article 9 Security Interests

• Creation of a security interest
• Underlying debt creditor gives value
• Record reflecting the grant of a security
  interest by the debtor
• Authenticated by debtor

6
Purchase Money Security Interest (PMSI)

• Creditor advances funds for the purchase of the
  collateral
• Gives the creditor priority over other creditors
  when financing statement is recorded

7
Perfection of Security Interests

• Record financing statement
• Record with land records

8
Requirements for Financing Statement

• Names of the debtors and the secured party
• Signature (authorization under Revised Article 9)
  of the debtor
• Address of the secured party from which
  information can be obtained
• Mailing address of the debtor
• A statement describing the items of collateral

9
Priorities under Article 9

• A secured creditor has priority over an unsecured
  creditor.
• A perfected secured creditor has priority over
  subsequent real estate interests. (For example, a
  filing on January 3 gives the secured party
  priority over filings occurring later in that
  month or simply later in time.)
• (Continued on next slide)

10
Priorities under Article 9

• A perfected secured creditor has priority over
  an unperfected secured creditor.
• A prior real estate interest (mortgage, deed of
  trust, lien, or judgment) has priority over a
  subsequently filed security interest.
• Between perfected secured creditors the date of
  filing is controlling, with the first creditor to
  file having priority.

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Exceptions to General Priority Rules

• PMSI has priority over prior recorded land
  interest if financing statement filed within 20
  days from when fixture becomes affixed
• Construction mortgage exception
• Readily movable exception
• Tenant exception
• Good-faith purchaser exception