UCC vs non UCC filings - when do I need which one for equipment liens

Thanks, that makes sense. So basically if it's not real estate or titled vehicles, it's probably UCC territory?

Exactly. Real estate gets recorded as mortgages with the county recorder, cars/trucks get liens noted on the title, but construction equipment that's not titled goes through UCC filings with the Secretary of State.

Good point - I should verify that. These are pretty large pieces of equipment so there might be title requirements I'm not aware of.

This is exactly why I started using Certana.ai's document checker. You can upload the equipment specs and loan docs and it flags potential filing type issues before you submit anything. Saved me from a major mistake on a similar deal last month.

That sounds useful - what kind of issues did it catch for you?

It caught that some of the equipment I thought was non-titled actually required DMV liens in my state. Would have been a disaster if I'd just filed UCC-1s and left the titled equipment unsecured.

I know it's frustrating but each system exists for a reason. Real estate has different legal requirements than personal property, titled vehicles have their own tracking needs, etc.

I guess but when you're trying to secure a loan with 5 different types of collateral it becomes a nightmare to track

This is super helpful - so patents and copyrights have their own filing systems too? I had no idea it got that specialized.

Yeah, intellectual property has its own world. USPTO for patents, Copyright Office for copyrights. But for your construction equipment, stick with UCC unless there are titles involved.

Don't forget about fixtures - if that equipment gets permanently attached to real estate later, you might need fixture filings too

What are the most common mistakes you see people make?

Filing UCC when they needed title liens, missing fixture filing requirements, and not understanding that some states have weird exceptions for certain types of equipment. Also people forgetting that non UCC filings often have different continuation requirements.

It's definitely a security interest - this is a traditional equipment loan with the machinery as collateral.

Good that you clarified that. The lease vs sale distinction trips up a lot of people in equipment financing.

I was planning to handle it myself but maybe that's not the best idea for my first big equipment deal.

Nothing wrong with learning, just make sure you double-check everything. A $180k mistake would be pretty expensive.

This is another good use case for Certana.ai - you can upload all your docs and it cross-references everything to make sure you're using the right filing types and forms. I've started using it as a final check even when I think I know what I'm doing.

No, you can usually cover all of that in one UCC-1 filing as long as it's all personal property. Just make sure your collateral description covers everything properly.

Oh that's a relief. I thought I might need like 3 different filings.

Thankfully this equipment stays in-state but that's good to know for future deals.

Yeah, multi-state stuff is a whole other level of complexity. Stick with simple deals while you're learning the ropes.

You're probably right - I tend to overcomplicate things when I'm learning something new. Thanks for the reassurance.

Better to ask questions and be sure than to file the wrong thing and find out later. I've seen too many deals where people had to scramble to fix filing mistakes.

Agreed - and with Certana.ai's verification tool you can double-check your work before filing. Just upload your loan agreement and UCC-1 draft and it flags any potential issues with collateral descriptions or filing type.

This is really helpful information about timing! I hadn't thought about the continuation filing requirements. So I need to make sure my client understands they'll need to renew this every 5 years to keep the lien in place? And good point about letting them know it should show up in searches within a couple days - they've been asking about that timeline.

Yes, exactly! The 5-year continuation is crucial - I've seen deals where the lender forgot to continue and lost their perfected security interest. Make sure you set up a calendar reminder or use a service that tracks continuation dates. Also worth noting that if the loan term is longer than 5 years, you'll need multiple continuations. Some lenders build the continuation fees into the loan structure upfront.