by Brian Fisher
Many Landlords and others file their own UCC-1s (promulgated Form UCC1 can be found at https://www.sos.state.tx.us/ucc/forms/UCC1.pdf) to “perfect”, or validate as against other creditors, a Landlord’s lien or security interest in personal property.
That can save some legal fees. However, we have seen some fairly common errors in non-lawyer prepared UCC-1s. The following are a few of those common errors:
1. Does not include the Debtor’s trade name, assumed name or DBA.
Debtor’s name should appear exactly as it appears in the records of the Office of the Texas Secretary of State (the “SOS) as of the date of the filing of the UCC Financing Statement, otherwise the secured party’s security interest will not be “perfected”. Good practice dictates confirming the debtor’s name with the SOS prior to filing the UCC Financing Statement.
2. Filing in the wrong state.
If the debtor is an entity registered with a state (e.g., corporation, limited liability company or limited partnership), then the UCC Financing Statement must be filed with the state of registration, not in the state where the personal property is located. This can be confusing in a financing of real property located in a state different from the state of debtor’s registration. In this case, the deed of trust is filed in the state in which the real property is located while the UCC Financing Statement is filed in the state of the debtor’s registration.
3. The “perfected” security interest is no longer “perfected”
Unless the organizational documents of such entity expressly opt-in to Article 8 of the Uniform Commercial Code (designating the ownership interests as “securities” rather than “general intangibles”), a security interest in the ownership interests of limited liability companies and limited partnership interests can be “perfected” only by the filing of UCC Financing Statements with the SOS of the state of the debtor’s registration.
Except with limited exceptions, a secured party must file a continuation of a UCC Financing Statement within six (6) months prior to the five (5) year anniversary of the filing of the UCC Financing Statement. Otherwise, the “perfected” security interest is no longer “perfected” and the secured party will lose its position of priority.
We can help you complete UCC -1s correctly
Care should be taken in correctly completing UCC -1s so as to avoid your security interest not being “perfected”. We can help you with that. For further information, please contact Brian Fisher at firstname.lastname@example.org.