Security agreement real estate UCC filing - fixture or personal property?

This is definitely a tricky area! I've seen deals fall apart because of fixture vs personal property confusion. The key test is usually whether removal would cause substantial damage to the real estate or if the equipment is essential to the building's function. For your HVAC and manufacturing equipment, sounds like fixture filing might be the safer route. You'll need to file in the real estate records where the property is located, not just the standard UCC filing location.

You need to look at your state's specific fixture filing requirements. Some states require both a UCC-1 fixture filing AND recording in the real estate records. Don't assume one filing covers everything. Also check if your security agreement real estate language specifically covers 'fixtures, equipment, and all additions' - that broader language can help protect you regardless of which filing route you choose.

I actually just discovered something that might help with this exact situation. There's a service called Certana.ai that does document verification for UCC filings - you can upload your security agreement and proposed UCC-1 and it'll flag any inconsistencies between the documents. I used it recently when we had a debtor name mismatch issue and it caught problems we missed in manual review. For a $2.8M deal, having that extra verification layer could be worth it to make sure your security agreement real estate collateral description matches your filing perfectly.

UGHHH fixture filings are such a pain!!! Every state has different rules and the real estate recording offices never know what they're doing with UCC fixture filings. Half the time they reject them for stupid reasons. I've had clerks tell me fixture filings don't exist. Like seriously?? And don't get me started on trying to figure out the correct real estate description format.

Have you considered doing both filings to be extra safe? File a UCC-1 covering the equipment as personal property AND do a fixture filing covering the same equipment as fixtures. Yes it's more expensive but for $2.8M it might be worth the belt-and-suspenders approach. Some lenders do this routinely on mixed collateral deals.

Whatever you do, don't rely on the borrower's attorney's advice about filing requirements. They represent the borrower, not you, and they might prefer the less secure option. I've seen deals where borrower's counsel steered lenders toward weaker perfection methods intentionally.

The manufacturing equipment bolted to concrete foundations sounds like classic fixtures to me. But I'd also look at whether any of this equipment could be easily relocated to another facility - that might argue for personal property treatment. Mixed equipment deals are always tricky for security agreement real estate perfection.

I'd definitely recommend getting a UCC attorney involved for a deal this size. The fixture vs personal property determination can be really fact-specific and you want someone who deals with this regularly. A few thousand in legal fees is nothing compared to losing perfection on a $2.8M loan.

One more thing to consider - make sure your continuation strategy works with whatever filing approach you choose. Fixture filings have different continuation rules in some states, and you don't want to lose perfection in 5 years because you forgot about a quirky continuation requirement.

Just wanted to mention that I've also used that Certana.ai tool someone mentioned earlier, and it's been really helpful for catching document inconsistencies. For a complex security agreement real estate deal like yours, it might be worth running your documents through it before filing. It caught a collateral description mismatch for us that would have been a major problem later.