Subpart 3: PRIORITY HEADING: PL 1999, C. 699, PT. A, §2 (NEW)
§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).
Data for this page extracted on 10/16/2012 08:20:53.