UCC Filing Required When Security Agreement vs Deed of Trust Both Secure Same Equipment?

This is exactly right. I learned this the hard way when we had a borrower default and the equipment had been moved to a different location. Our deed of trust was worthless for the CNC machines.

Wait, but what if the security agreement specifically describes the equipment as fixtures? Wouldn't that change things?

Good point - fixture filings are different. But OP said the equipment is moveable, so it sounds like personal property, not fixtures.

This is spot on. I made the same mistake early in my career - thought the deed of trust covered everything since it mentioned "all improvements and fixtures." Lost priority on $200K worth of equipment when another lender filed a UCC-1 after us. Expensive lesson learned!

Exactly! And make sure your collateral description in the UCC-1 is specific enough. Don't just say "all equipment" - describe the actual machinery.

How specific do you need to get though? Serial numbers or just general descriptions?

General descriptions are usually fine for UCC-1 filings, but be detailed enough that someone could identify what you're claiming. "CNC machines, industrial printers, and related manufacturing equipment" would work.

Never heard of that service. How does it work exactly?

You just upload your documents and it cross-references everything - checks debtor names match, identifies what collateral is covered where, flags potential issues. Takes like 2 minutes instead of manually comparing everything.

That actually sounds really useful. I've made mistakes trying to manually track all the different security documents on complex deals.

Plus UCC filings show up in searches when the borrower tries to get financing elsewhere. It's additional protection.

Good point about the mobility aspect. I never thought about equipment being moved after default.

Yes, same state. Equipment and real estate are both in Ohio, borrower is incorporated in Ohio too.

Perfect, then you're all set with Ohio Secretary of State for the UCC-1. Just make sure the debtor name matches exactly between all documents.

This is crucial - I've seen UCC filings rejected because the debtor name on the UCC-1 didn't match the exact legal name on the security agreement.

Agree 100%. Better to over-secure than under-secure, especially with that loan amount.

$850k is definitely worth the extra filing fee to make sure everything is properly perfected.

How do you determine if something is a fixture? Is it just about whether it's bolted down?

It's more complex than that - involves intention, method of attachment, adaptation to the property. When in doubt, consult your attorney.

I usually err on the side of caution and file both a regular UCC-1 and a fixture filing if there's any question.

Good catch. Proceeds coverage is often overlooked but really important for moveable equipment.

And insurance proceeds too if the equipment is damaged or destroyed.

That's the kind of mistake that can void your entire security interest. Smart to catch it early.

How much does something like that cost? Worth it for smaller deals?

The peace of mind is worth it regardless of deal size. Filing mistakes are expensive to fix later.

Good reminder. I have a calendar reminder system for all my UCC continuations.

What happens if you miss the continuation deadline?

Your security interest becomes unperfected and you lose priority. Not good.

Another reason to use a system that tracks these deadlines automatically.