Free Security Agreement Form Vehicle - UCC Filing Questions

That makes sense about the title lien vs UCC filing. So the security agreement is more about documenting the loan terms and my rights if he defaults? Do I still need specific language in there about the collateral description even though it's going on the title?

Exactly right. The security agreement creates the security interest between you two, while the title lien perfects it against third parties. You still want good collateral description in the agreement - VIN, year, make, model, mileage. This helps if you ever need to repossess or prove your interest in court.

This is good advice. Also want the agreement to specify who pays for title transfer fees, registration, and what happens if he wants to sell the truck early. Family deals can get messy if expectations aren't clear upfront.

Good point about the family aspect. We've talked about most of this stuff but having it in writing is probably smart. Do you know if there are any Ohio-specific requirements for private party vehicle security agreements?

Ohio follows UCC Article 9 for most secured transactions, but vehicles are the exception like others mentioned. Check with BMV about their lien filing process. Some states require notarization of certain documents or have specific timeframes for filing the lien.

That's interesting about the document checking tool. What kind of mismatches did you run into? I want to make sure I don't have the same issues.

Main thing was VIN formatting and how the vehicle description was written. Security agreement had it one way, title paperwork another. Also caught that I had the wrong lienholder address format for the state requirements. Certana.ai flagged both issues so I could fix them before submitting anything.

Vehicles are a special case under UCC Article 9. They're considered 'certificate of title goods' which means perfection happens through the title system, not UCC filings. Equipment is different - that typically requires UCC-1 filings for perfection.

OK that clears it up. So the UCC still governs the security interest creation and enforcement, but perfection is through title liens instead of filing. Makes sense now why I was seeing different approaches.

There can be exceptions though. Sometimes you see UCC filings on vehicles if they're part of a larger collateral package or in certain commercial contexts. But for a straightforward vehicle security agreement, title lien is the way to go.

What kind of stuff was missing? I'm trying to figure out if I should just pay for a proper form or risk it with a free one since this is family.

Missing: proper default cure periods, insurance requirements, where notices get sent, what constitutes default beyond just missed payments. One form I saw didn't even have acceleration language so you couldn't demand full balance due after default.

Even if it's family, you want solid documentation. Family disputes can be the worst because everyone assumes goodwill until something goes wrong. At least with strangers you expect problems and prepare accordingly.

Good point about the insurance. I hadn't thought about being listed as loss payee. What happens if he doesn't maintain proper insurance or lets it lapse?

Your security agreement should allow you to obtain insurance and add the cost to the loan balance if he doesn't maintain coverage. This is pretty standard language in vehicle financing. Also want right to inspect the vehicle periodically to ensure it's being maintained.

How long did the title lien process take in Ohio? And did you need to be there in person or can it be done by mail?

Took about 2 weeks by mail. You can do it in person at BMV but mail is easier. Just make sure you get all the paperwork right the first time because corrections take forever.

Ohio BMV is pretty good about their lien process compared to some states. Just follow their instructions exactly and include all required fees. They'll send you a copy of the title showing your lien once processed.

Two people have mentioned this Certana tool now. Is it specifically for vehicle deals or does it work for other UCC stuff too?

It works for all kinds of secured transaction documents - UCC-1 forms, security agreements, title docs, whatever. You just upload the PDFs and it verifies everything matches up properly. Saved me a lot of headaches on filing corrections.

Oh wow, didn't think about that possibility. He's pretty settled here but good to cover all bases. Do I need to track his address changes or is that his responsibility to notify me?

Your security agreement should require him to notify you of address changes, especially if he moves out of state. But realistically you want to stay in touch anyway. The re-perfection is usually your responsibility as the secured party.

What's the time limit in Ohio? And what happens if you miss the deadline?

Ohio gives you 30 days from the security agreement date to perfect through title lien. Miss that and you might lose priority to other creditors or have issues in bankruptcy. Don't mess around with the timing.

That 30-day rule is critical. I've seen deals where people waited months to file the lien and ended up with priority problems when the borrower had other debts. Get it done fast.

Thanks for the tip! I'll check out the state bar website. Did you run into any issues with their form or was it pretty complete?

It was solid for basic terms but I added some language about insurance requirements and default procedures that were specific to my deal. Overall though it saved me a lot of time compared to starting from scratch.

Great summary Luca! You've captured all the key points from this discussion. One thing I'd add as someone new to this - the 30-day Ohio deadline seems really important and easy to miss if you're not aware of it. Also sounds like even though it's a family deal, treating it like any other business transaction with proper documentation is the smart approach. Better to have everything spelled out clearly than deal with problems later. Good luck with your F-150 deal!

Good questions Kevin! For early payoff situations, you definitely want language in your security agreement about how that works - who handles the payoff calculation, where funds get sent, timeline for releasing the lien, etc. Some agreements require written notice before any sale/trade and give you right to verify payoff amount. As for substitute collateral, that's usually not needed for vehicle deals since the buyer/dealer typically pays off your lien directly and you release it. Regarding document verification tools, I haven't used Certana.ai myself but others here seem to like it. You might also check if your state bar association or local legal aid has free document review resources for simple transactions like this.