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§9-1334. Priority of security interests in fixtures and crops


Published: 2015

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§9-1334. Priority of security interests in fixtures and crops








(1). 
 
A security interest under this Article may be created in goods that are fixtures
or may continue in goods that become fixtures. A security interest does not exist
under this Article in ordinary building materials incorporated into an improvement
on land.


[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]








(2). 
 
This Article does not prevent creation of an encumbrance upon fixtures under real
property law.


[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]








(3). 
 
In cases not governed by subsections (4) to (8), a security interest in fixtures
is subordinate to a conflicting interest of an encumbrancer or owner of the related
real property other than the debtor.


[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]








(4). 
 
Except as otherwise provided in subsection (8), a perfected security interest in
fixtures has priority over a conflicting interest of an encumbrancer or owner of the
real property if the debtor has an interest of record in or is in possession of the
real property and:





(a). The security interest is a purchase-money security interest; [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]











(b). The interest of the encumbrancer or owner arises before the goods become fixtures;
and [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]











(c). The security interest is perfected by a fixture filing before the goods become fixtures
or within 20 days thereafter. [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]








[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]








(5). 
 
A perfected security interest in fixtures has priority over a conflicting interest
of an encumbrancer or owner of the real property if:





(a). The debtor has an interest of record in the real property or is in possession of
the real property and the security interest:



(i) Is perfected by a fixture filing before the interest of the encumbrancer or
owner is of record; and






(ii) Has priority over any conflicting interest of a predecessor in title of the
encumbrancer or owner; [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]














(b). Before the goods become fixtures, the security interest is perfected by any method
permitted by this Article and the fixtures are readily removable:



(i) Factory or office machines;





(ii) Equipment that is not primarily used or leased for use in the operation of
the real property; or






(iii) Replacements of domestic appliances that are consumer goods; [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]














(c). The conflicting interest is a lien on the real property obtained by legal or equitable
proceedings after the security interest was perfected by any method permitted by this
Article; or [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]











(d). The security interest is:



(i) Created in a manufactured home in a manufactured-home transaction; and





(ii) Perfected pursuant to a statute described in section 9-1311, subsection (1),
paragraph (b). [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]











[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]








(6). 
 
A security interest in fixtures, whether or not perfected, has priority over a conflicting
interest of an encumbrancer or owner of the real property if:





(a). The encumbrancer or owner has, in an authenticated record, consented to the security
interest or disclaimed an interest in the goods as fixtures; or [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]











(b). The debtor has a right to remove the goods as against the encumbrancer or owner. [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]








[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]








(7). 
 
The priority of the security interest under subsection (6), paragraph (b) continues
for a reasonable time if the debtor's right to remove the goods as against the encumbrancer
or owner terminates.


[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]








(8). 
 
A mortgage is a construction mortgage to the extent that it secures an obligation
incurred for the construction of an improvement on land, including the acquisition
cost of the land, if a recorded record of the mortgage so indicates. Except as otherwise
provided in subsections (5) and (6), a security interest in fixtures is subordinate
to a construction mortgage if a record of the mortgage is recorded before the goods
become fixtures and the goods become fixtures before the completion of the construction.
A mortgage has this priority to the same extent as a construction mortgage to the
extent that it is given to refinance a construction mortgage.


[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]








(9). 
 
A perfected security interest in crops growing on real property has priority over
a conflicting interest of an encumbrancer or owner of the real property if the debtor
has an interest of record in or is in possession of the real property.


[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]





SECTION HISTORY

1999, c. 699, §A2 (NEW).
1999, c. 699, §A4 (AFF).