57A-9-334 Security interest in fixtures--Priority--Security interest in growing crops.
57A-9-334.
Security interest in fixtures--Priority--Security interest in growing crops.
(a) A
security interest under this chapter 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.
(b) This chapter does not prevent creation of an encumbrance upon fixtures under real property
law.
(c) In cases not governed by subsections (d) through (h), 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.
(d) Except as otherwise provided in subsection (h), 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:
(1)
The security interest is a purchase-money security interest;
(2)
The interest of the encumbrancer or owner arises before the goods become fixtures; and
(3)
The security interest is perfected by a fixture filing before the goods become fixtures or
within twenty days thereafter.
(e) A perfected security interest in fixtures has priority over a conflicting interest of an
encumbrancer or owner of the real property if:
(1)
The debtor has an interest of record in the real property or is in possession of the real
property and the security interest:
(A)
Is perfected by a fixture filing before the interest of the encumbrancer or owner is
of record; and
(B)
Has priority over any conflicting interest of a predecessor in title of the
encumbrancer or owner;
(2)
Before the goods become fixtures, the security interest is perfected by any method
permitted by this article and the fixtures are readily removable:
(A)
Factory or office machines;
(B)
Equipment that is not primarily used or leased for use in the operation of the real
property; or
(C)
Replacements of domestic appliances that are consumer goods;
(3)
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
(4)
The security interest is:
(A)
Created in a manufactured home in a manufactured-home transaction; and
(B)
Perfected pursuant to a statute described in § 57A-9-311(a)(2).
(f) 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:
(1)
The encumbrancer or owner has, in an authenticated record, consented to the security
interest or disclaimed an interest in the goods as fixtures; or
(2)
The debtor has a right to remove the goods as against the encumbrancer or owner.
(g) The priority of the security interest under paragraph (f)(2) continues for a reasonable time if
the debtor's right to remove the goods as against the encumbrancer or owner terminates.
(h) 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 (e) and (f), 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.
(i) 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.
(j) Subsection (i) prevails over any inconsistent statute.
Source: SL 2000, ch 231.