UCC 9307 Jurisdiction Rules - Equipment Moved Between States After Filing

That's what I was afraid of. The borrower says it's for a 6-month project but they're already talking about other Kentucky work. Sounds like I need to file in Kentucky ASAP to be safe.

Better safe than sorry with UCC 9307. I've seen lenders lose perfection by waiting too long to refile when equipment moves states.

Did you have any issues with determining exactly when the 4-month period started? The equipment was moved gradually over about 2 weeks.

Good question. Courts usually look at when the equipment was first moved with intent to remain in the new location. If it was a gradual move but with clear intent to relocate, I'd count from when the first piece arrived.

This is why I always recommend adding a covenant in loan docs requiring borrower notification before moving collateral between states. Helps avoid these UCC 9307 deadline issues.

That sounds helpful - I'm worried about making mistakes in the Kentucky filing since their debtor name requirements might be slightly different than Ohio's.

Exactly! Different states can have subtle variations in how they handle entity names. The verification tool helps catch those inconsistencies before they become problems.

I haven't checked Kentucky's specific interpretation yet. The project site is supposed to be active for at least 6 months, possibly longer.

Six months is definitely long enough to be considered 'normally located' in Kentucky under UCC 9307. I'd file there within the next few weeks to be safe.

Agreed. For UCC 9307 purposes, 6 months at a location is well beyond what courts consider temporary.

That's terrifying. What did you end up doing to fix it?

Had to file a new UCC-1 in Louisiana immediately, but we were unperfected for about a month. Luckily no other creditors filed during that gap, but it could have been bad.

That's an interesting approach. Probably makes sense for borrowers with multi-state operations.

Wish I had thought of that beforehand. This borrower does work in several states so it would have been worth the extra filing fees.

Good point. The borrower is an LLC so I need to check if Kentucky requires the full legal name with 'LLC' suffix like Ohio does.

This is exactly why that Certana verification tool I mentioned earlier is so useful. It would catch any name discrepancies between your Ohio and Kentucky filings before you submit.

Vehicles can be even trickier because borrowers move them around so frequently. At least with construction equipment you usually know when it's been relocated for a major project.

True. We're trying to add GPS tracking requirements to our loan agreements now so we know immediately when vehicles cross state lines.

The Ohio filing is only about a year old so I've got time on that front. But good reminder - I need to calendar both the Ohio continuation and track the Kentucky filing timeline.

Smart. Multi-state filings can get complicated to track. I use a spreadsheet with alerts for all the continuation deadlines.

The loan docs have general language about not disposing of collateral but nothing specific about geographic restrictions or notification requirements.

That's a lesson for next time. We always include a covenant requiring 30 days notice before moving equipment to another state.

Good practice. Makes it much easier to maintain perfection when you know about moves in advance.

You're absolutely right. I'm going to prepare the Kentucky filing this week. Better to be overcautious with UCC 9307 than risk losing our security interest.

Exactly. The filing fee is minimal compared to the risk of having an unperfected security interest.