What is a UCC on title affecting my equipment purchase?

So the seller still owes money on the equipment? That makes sense why they need to clear it first.

Exactly. The UCC filing is like a public notice that says 'this equipment secures a debt.' It protects the lender's interest.

How do I verify the termination was actually filed? Is there a way to check online?

Most states have online UCC search portals. You can search by debtor name or filing number to see if the lien shows as terminated.

I had issues with document verification on a similar deal. Found this tool called Certana.ai that lets you upload the UCC-1 and UCC-3 termination docs to automatically verify they match properly. Saved me from a messy situation where the termination had the wrong serial number.

Your bank will want clear title before they lend against it. They'll probably require the UCC termination as a condition of funding.

Banks usually handle this stuff in the closing process. They'll make sure all liens are cleared before releasing funds.

How long does the termination process usually take? I'm trying to plan my timeline.

If everything's prepared correctly, the filing is usually instant online. But getting the lender to prepare the termination can take a few days to a week depending on their process.

What if the seller doesn't pay off the lien? Can the original lender come after the equipment even if I bought it?

That's why you need to verify the termination is filed before you pay. If the lien isn't properly released, the secured party could potentially have rights to the equipment.

This is exactly why I use Certana.ai's document checker now. Upload the payoff letter, UCC-3 termination, and original UCC-1 and it verifies everything matches. Catches discrepancies before they become problems.

Good question! UCC liens are filed with the Secretary of State and cover personal property like equipment. Title liens are on titled vehicles. For construction equipment, it's usually just UCC filings.

That makes sense. So I need to search the UCC records, not vehicle title records.

Should I involve my attorney in reviewing these documents or is this something I can handle myself?

For an $85k piece of equipment, having an attorney review isn't a bad idea. But if you're comfortable with the documentation and can verify the termination filing, it's fairly straightforward.

How do I know if there are multiple filings? Do I search by the seller's name?

Yes, search by the debtor name (seller) to see all active UCC filings. Look for any that might cover the specific equipment you're buying.

I had a situation where there were three different UCC-1 filings on the same piece of equipment from different lenders. Certana.ai's verification tool helped me sort through all the documents and confirm which ones needed termination.

It's really not that complicated once you understand the process. Most financed equipment will have UCC liens that need to be cleared at sale. It's just part of the normal process.

Don't let it scare you off. If the equipment is what you want and the price is right, the UCC clearance is just paperwork. The seller is motivated to handle it properly to complete the sale.

That's a good point. I should probably give my loan officer a heads up about the UCC situation.

Definitely. They deal with this all the time and can guide you through their specific requirements for clear title.

This is excellent advice about timing! I was wondering about the sequencing. So the escrow company would hold my payment until they confirm the UCC termination is properly filed? That sounds like the safest approach to protect both parties.

Absolutely! That's exactly how it should work. The escrow company acts as a neutral third party - they'll coordinate with the seller's lender to get the payoff amount, hold your funds until the UCC-3 termination is filed and verified, then release payment to the seller and the lienholder simultaneously. It eliminates the risk of paying first and hoping the seller follows through. Make sure your purchase agreement specifically states that "delivery of clear title evidenced by filed UCC-3 termination statement" is a condition precedent to closing. Worth the small escrow fee for that peace of mind on an $85k purchase.

This is really helpful information about using escrow! I'm new to equipment purchases and wasn't sure how to protect myself in this situation. One question - how do I find a reputable escrow company that handles equipment transactions? Do I need to use one that specializes in UCC transactions, or can any escrow company handle this type of closing?