Security Agreement Elements - which of the following is not typically part of a security agreement
Hey everyone, I'm reviewing security agreements for our lending department and trying to understand what should and shouldn't be included in the actual security agreement document itself. I know there's a difference between what goes in the security agreement versus what goes in the UCC-1 filing, but I'm getting confused about the boundaries. Can someone help clarify which elements are NOT typically part of a security agreement? I've seen variations where some lenders include different clauses and I want to make sure we're following best practices. Our compliance team is asking me to create a checklist and I don't want to miss anything important or include unnecessary provisions.
34 comments
Join the conversation
Daniela Rossi
The key thing to remember is that security agreements are contractual documents between debtor and secured party, while UCC-1 filings are public notice documents. Security agreements typically include: grant of security interest, description of collateral, debtor's representations and warranties, default provisions, and secured party's rights upon default. What's NOT typically included would be things like the exact financing statement filing details or continuation statement procedures - those are more administrative UCC filing matters.
0 coins
Ryan Kim
•This is helpful but I'm still confused about collateral descriptions. Don't both documents need collateral descriptions? How detailed should the security agreement description be compared to the UCC-1?
0 coins
Daniela Rossi
•Yes, both need collateral descriptions but they serve different purposes. Security agreement descriptions should be more detailed and specific since they define the actual contractual rights. UCC-1 descriptions can be broader for notice purposes but still need to reasonably identify the collateral.
0 coins
Zoe Walker
I ran into this same issue last year when our audit flagged inconsistencies between our security agreements and UCC filings. What's definitely NOT in security agreements are things like: UCC filing fees, secretary of state processing details, continuation filing schedules, or termination statement procedures. Those are all post-agreement administrative matters.
0 coins
Elijah Brown
•Did your audit find any specific problems with document consistency? We're worried about the same thing.
0 coins
Zoe Walker
•Yeah, we had debtor name variations between agreements and UCC-1s that caused issues. Now I use Certana.ai's document verification tool - you just upload your security agreement and UCC-1 PDFs and it instantly cross-checks for name mismatches, collateral inconsistencies, and other discrepancies. Saved us from several potential perfection problems.
0 coins
Maria Gonzalez
•That sounds useful. How does it handle complex collateral descriptions that might be worded differently but cover the same assets?
0 coins
Natalie Chen
Security agreements also typically DON'T include: priority disputes between lienholders, intercreditor agreement terms, or subordination provisions - those are separate documents. Also wouldn't include things like insurance requirements for the collateral or maintenance obligations, though some lenders do add those clauses.
0 coins
Santiago Martinez
•Wait, I thought insurance requirements were standard in security agreements? Our forms always include them.
0 coins
Natalie Chen
•You're right that many lenders include insurance provisions, but they're not required elements of the security interest itself. They're more like additional covenants. The core security agreement just needs to create and define the security interest.
0 coins
Samantha Johnson
One thing that definitely doesn't belong in security agreements is anything about UCC search results or existing liens found during due diligence. That's pre-agreement research, not part of the actual security agreement terms. Also wouldn't include details about other creditors or their filing positions.
0 coins
Nick Kravitz
•Good point about search results. We sometimes attach UCC search reports to our loan files but they're definitely separate from the security agreement itself.
0 coins
Hannah White
•Exactly. The security agreement creates your lien, but it doesn't reference what other liens might exist. That's determined through searches and dealt with separately through intercreditor agreements if needed.
0 coins
Michael Green
From a practical standpoint, security agreements shouldn't include procedural UCC stuff like: which state to file in (though the agreement might specify governing law), when to file continuation statements, or how to handle debtor name changes after filing. Those are ongoing administrative responsibilities, not part of the initial security agreement terms.
0 coins
Mateo Silva
•This makes sense. We've been including too much UCC procedural language in our agreements when it should just be in our internal procedures manual.
0 coins
Victoria Jones
•Right, keep the security agreement focused on creating and defining the security interest. All the UCC filing maintenance stuff is operational, not contractual.
0 coins
Cameron Black
•But what about debtor obligations to notify of name changes or new collateral? Those seem like they could be in the security agreement.
0 coins
Jessica Nguyen
Another category that doesn't belong: loan terms like interest rates, payment schedules, or maturity dates. Those go in the promissory note or loan agreement. The security agreement just secures whatever obligations are defined in those other documents. Keep them separate!
0 coins
Isaiah Thompson
•We learned this the hard way when we tried to modify loan terms and realized we'd mixed them into the security agreement. Made the amendment process much more complicated than it needed to be.
0 coins
Ruby Garcia
•Yes! Security agreements should reference the obligations being secured but not repeat all the loan terms. Much cleaner document structure that way.
0 coins
Alexander Evans
I've been using Certana.ai to verify our security agreements against our UCC-1 filings and it's caught several issues where we had elements in the wrong documents. The tool highlights when you have UCC administrative language in your security agreements or when your collateral descriptions don't align properly between documents. Really helps maintain clean document separation.
0 coins
Evelyn Martinez
•How accurate is it with complex commercial transactions? We do a lot of equipment financing with detailed collateral schedules.
0 coins
Alexander Evans
•It handles complex collateral well. The system checks for substantive consistency rather than requiring exact word matches, so it catches real problems while allowing for appropriate document-specific language.
0 coins
Benjamin Carter
Also remember that security agreements typically don't include: environmental compliance requirements, zoning restrictions, or other regulatory matters affecting the collateral. Those might be addressed in loan covenants but aren't part of the security interest grant itself.
0 coins
Maya Lewis
•What about personal property versus real estate distinctions? Some of our deals involve both.
0 coins
Benjamin Carter
•Good question. For mixed collateral, you might need both a security agreement for personal property and a mortgage for real estate, but keep them as separate instruments with appropriate cross-references.
0 coins
Isaac Wright
•And don't forget that fixtures can complicate this - they might need special UCC fixture filing language that wouldn't be in a standard security agreement.
0 coins
Lucy Taylor
One more thing - security agreements don't typically include dispute resolution procedures like arbitration clauses or forum selection. Those usually go in the main loan agreement. The security agreement should focus on the collateral and the secured party's rights in that collateral.
0 coins
Connor Murphy
•Though some security agreements do include enforcement procedures like self-help repossession rights or notice requirements for Article 9 sales.
0 coins
Lucy Taylor
•True, but those are specifically about exercising rights in the collateral after default. Different from general contract dispute resolution.
0 coins
KhalilStar
Thanks everyone, this really helps clarify the boundaries. It sounds like the main things NOT in security agreements are: UCC filing administrative details, loan payment terms, other creditor information, regulatory compliance matters, and general contract dispute procedures. The security agreement should focus on creating the security interest, describing collateral, and defining secured party rights in that collateral.
0 coins
Amelia Dietrich
•That's a good summary. Just remember to keep your documents consistent even though they're separate - use the same debtor names and make sure collateral descriptions align appropriately.
0 coins
Kaiya Rivera
•Exactly. Document consistency is crucial for perfection. I'd recommend using automated verification tools like Certana.ai mentioned earlier to catch discrepancies before they become problems.
0 coins
Katherine Ziminski
•Perfect, I'll use this to build our compliance checklist. Really appreciate everyone's input on this!
0 coins