Question 1

What is UCC Article 9 in Florida?

Accepted Answer

UCC Article 9 (Chapter 679, FL Statutes): governs secured transactions, the creation of security interests in personal property, and the priority of competing claims. In Florida: Article 9 applies to: commercial loans (the lender takes a security interest in the borrower’s personal property: equipment, inventory, accounts receivable, and general intangibles), fixture filings (a security interest in personal property that has become attached to real property), and consignment transactions. The secured party: perfects their interest by filing a UCC-1 Financing Statement with the FL Department of State.

Question 2

How does Article 9 priority work in Florida?

Accepted Answer

Priority rules: first to file or perfect (Section 679.3221: the first secured party to file a financing statement or perfect their interest generally has priority), purchase money security interest (PMSI: Section 679.3241: a PMSI has priority over a prior filing if perfected within 20 days of the debtor’s receipt of the collateral), and buyer in the ordinary course (Section 679.3201: a buyer who purchases goods from a seller’s inventory in the ordinary course of business takes free of any security interest created by the seller). The priority: determines who gets paid first if the debtor defaults.

Question 3

What happens when a debtor defaults under Article 9 in Florida?

Accepted Answer

Default remedies (Part 6 of Article 9): the secured party can: repossess the collateral (without judicial process if it can be done without breach of the peace; Section 679.609), sell the collateral (the secured party must give the debtor reasonable notice of the sale; the sale must be commercially reasonable; Section 679.610), retain the collateral in satisfaction (if the debtor consents: the secured party can keep the collateral in full or partial satisfaction of the debt; Section 679.620), and sue for a deficiency (if the sale proceeds are insufficient to cover the debt: the secured party can sue the debtor for the deficiency; Section 679.615). The debtor: has the right to redeem the collateral before the sale by paying the full debt.

Uniform Commercial Code Article 9

UCC Article 9 in Florida

Scope

Priority

Default Remedies

Related Terms

Barnes Walker Business Law

Ready to Get Started?