(810 ILCS 5/9-301) (from Ch. 26, par. 9-301)
Sec. 9-301. Law governing perfection and priority of security interests. Except as otherwise provided in Sections 9-303 through 9-306.1,
the following
rules
determine the law governing perfection, the effect of perfection or
nonperfection,
and the priority of a security interest in collateral:
(1) Except as otherwise provided in this Section, |
| while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral.
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(2) While collateral is located in a jurisdiction,
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| the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a possessory security interest in that collateral.
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(3) Except as otherwise provided in paragraph (4),
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| while tangible negotiable documents, goods, instruments, money, or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:
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(A) perfection of a security interest in the
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| goods by filing a fixture filing;
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(B) perfection of a security interest in timber
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(C) the effect of perfection or nonperfection and
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| the priority of a nonpossessory security interest in the collateral.
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(4) The local law of the jurisdiction in which the
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| wellhead or minehead is located governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in as-extracted collateral.
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(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/9-304) (from Ch. 26, par. 9-304)
Sec. 9-304.
Law governing perfection and priority of security interests
in deposit accounts.
(a) Law of bank's jurisdiction governs. The local law of a bank's
jurisdiction governs perfection, the effect of perfection or nonperfection, and
the
priority of a security interest in a deposit account maintained with that bank.
(b) Bank's jurisdiction. The following rules determine a bank's
jurisdiction for purposes of this Part:
(1) If an agreement between the bank and the debtor |
| governing the deposit account expressly provides that a particular jurisdiction is the bank's jurisdiction for purposes of this Part, this Article, or the Uniform Commercial Code, that jurisdiction is the bank's jurisdiction.
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(2) If paragraph (1) does not apply and an agreement
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| between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank's jurisdiction.
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(3) If neither paragraph (1) nor paragraph (2)
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| applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank's jurisdiction.
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(4) If none of the preceding paragraphs applies, the
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| bank's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer's account is located.
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(5) If none of the preceding paragraphs applies, the
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| bank's jurisdiction is the jurisdiction in which the chief executive office of the bank is located.
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(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-305) (from Ch. 26, par. 9-305)
Sec. 9-305.
Law governing perfection and priority of security interests
in investment property.
(a) Governing law: general rules. Except as otherwise provided
in subsection (c), the following rules apply:
(1) While a security certificate is located in a |
| jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby.
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(2) The local law of the issuer's jurisdiction as
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| specified in Section 8-110(d) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.
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(3) The local law of the securities intermediary's
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| jurisdiction as specified in Section 8-110(e) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.
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(4) The local law of the commodity intermediary's
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| jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account.
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(b) Commodity intermediary's jurisdiction. The following rules
determine a commodity intermediary's jurisdiction for purposes of this Part:
(1) If an agreement between the commodity
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| intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary's jurisdiction for purposes of this Part, this Article, or the Uniform Commercial Code, that jurisdiction is the commodity intermediary's jurisdiction.
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(2) If paragraph (1) does not apply and an agreement
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| between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.
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(3) If neither paragraph (1) nor paragraph (2)
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| applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.
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(4) If none of the preceding paragraphs applies, the
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| commodity intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer's account is located.
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(5) If none of the preceding paragraphs applies, the
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| commodity intermediary's jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located.
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(c) When perfection governed by law of jurisdiction where
debtor located. The local law of the jurisdiction in which the debtor is located
governs:
(1) perfection of a security interest in investment
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(2) automatic perfection of a security interest in
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| investment property created by a broker or securities intermediary; and
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(3) automatic perfection of a security interest in a
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| commodity contract or commodity account created by a commodity intermediary.
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(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-307) (from Ch. 26, par. 9-307)
Sec. 9-307. Location of debtor.
(a) "Place of business." In this Section, "place of business" means
a place where a debtor conducts its affairs.
(b) Debtor's location: general rules. Except as otherwise
provided in this Section, the following rules determine a debtor's location:
(1) A debtor who is an individual is located at the |
| individual's principal residence.
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(2) A debtor that is an organization and has only one
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| place of business is located at its place of business.
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(3) A debtor that is an organization and has more
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| than one place of business is located at its chief executive office.
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(c) Limitation of applicability of subsection (b). Subsection (b)
applies only if a debtor's residence, place of business, or chief executive
office, as applicable, is located in a jurisdiction whose law generally
requires information concerning the existence of a nonpossessory security
interest to be made generally available in a filing, recording, or registration
system as a condition or result of the security interest's obtaining priority
over the rights of a lien creditor with respect to the collateral. If
subsection (b) does not apply, the debtor is located in the District of
Columbia.
(d) Continuation of location: cessation of existence, etc. A person that
ceases to exist, have a residence, or have a place of business continues
to be located in the jurisdiction specified by subsections (b) and (c).
(e) Location of registered organization organized under State
law. A registered organization that is organized under the law of a State is
located in that State.
(f) Location of registered organization organized under federal law; bank
branches and agencies. Except as otherwise provided in subsection (i), a
registered organization that is organized under the law of the United States
and a branch or agency of a bank that is not organized under the law of the
United States or a State are located:
(1) in the State that the law of the United States
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| designates, if the law designates a State of location;
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(2) in the State that the registered organization,
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| branch, or agency designates, if the law of the United States authorizes the registered organization, branch, or agency to designate its State of location, including by designating its main office, home office, or other comparable office; or
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(3) in the District of Columbia, if neither paragraph
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| (1) nor paragraph (2) applies.
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(g) Continuation of location: change in status of registered organization.
A registered organization continues to be located in the jurisdiction specified
by subsection (e) or (f) notwithstanding:
(1) the suspension, revocation, forfeiture, or lapse
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| of the registered organization's status as such in its jurisdiction of organization; or
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(2) the dissolution, winding up, or cancellation of
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| the existence of the registered organization.
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(h) Location of United States. The United States is located in the
District of Columbia.
(i) Location of foreign bank branch or agency if licensed in only one
State. A branch or agency of a bank that is not organized under the law
of the United States or a State is located in the State in which the branch
or agency is licensed, if all branches and agencies of the bank are licensed
in only one State.
(j) Location of foreign air carrier. A foreign air carrier under the
Federal Aviation Act of 1958, as amended, is located at the designated office
of the agent upon which service of process may be made on behalf of the
carrier.
(k) Section applies only to this Part. This Section applies only for
purposes of this Part.
(Source: P.A. 97-1034, eff. 7-1-13 .)
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(810 ILCS 5/9-309) (from Ch. 26, par. 9-309)
Sec. 9-309.
Security interest perfected upon attachment.
The following
security interests are perfected when they attach:
(1) a purchase-money security interest in consumer |
| goods, except as otherwise provided in Section 9-311(b) with respect to consumer goods that are subject to a statute or treaty described in Section 9-311(a);
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(2) an assignment of accounts or payment intangibles
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| which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor's outstanding accounts or payment intangibles;
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(3) a sale of a payment intangible;
(4) a sale of a promissory note;
(5) a security interest created by the assignment of
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| a health-care-insurance receivable to the provider of the health-care goods or services;
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(6) a security interest arising under Section 2-401,
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| 2-505, 2-711(3), or 2A-508(5), until the debtor obtains possession of the collateral;
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(7) a security interest of a collecting bank arising
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(8) a security interest of an issuer or nominated
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| person arising under Section 5-118;
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(9) a security interest arising in the delivery of a
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| financial asset under Section 9-206(c);
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(10) a security interest in investment property
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| created by a broker or securities intermediary;
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(11) a security interest in a commodity contract or a
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| commodity account created by a commodity intermediary;
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(12) an assignment for the benefit of all creditors
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| of the transferor and subsequent transfers by the assignee thereunder; and
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(13) a security interest created by an assignment of
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| a beneficial interest in a decedent's estate.
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(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-310) (from Ch. 26, par. 9-310)
Sec. 9-310. When filing required to perfect security interest or
agricultural lien; security interests and agricultural liens to which filing
provisions do not apply.
(a) General rule: perfection by filing. Except as otherwise
provided in subsection (b) and Section 9-312(b), a financing statement must be
filed to perfect all security interests and agricultural liens.
(b) Exceptions: filing not necessary. The filing of a financing
statement is not necessary to perfect a security interest:
(1) that is perfected under Section 9-308(d), (e), |
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(2) that is perfected under Section 9-309 when it
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(3) in property subject to a statute, regulation, or
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| treaty described in Section 9-311(a);
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(4) in goods in possession of a bailee which is
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| perfected under Section 9-312(d)(1) or (2);
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(5) in certificated securities, documents, goods, or
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| instruments which is perfected without filing, control, or possession under Section 9-312(e), (f), or (g);
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(6) in collateral in the secured party's possession
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(7) in a certificated security which is perfected by
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| delivery of the security certificate to the secured party under Section 9-313;
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(8) in deposit accounts, electronic chattel paper,
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| electronic documents, investment property, letter-of-credit rights, or beneficial interests in Illinois land trusts which is perfected by control under Section 9-314;
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(9) in proceeds which is perfected under Section
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(10) that is perfected under Section 9-316.
(c) Assignment of perfected security interest. If a secured party
assigns a perfected security interest or agricultural lien, a filing under this
Article is
not required to continue the perfected status of the security interest against
creditors
of and transferees from the original debtor.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/9-311) (from Ch. 26, par. 9-311)
Sec. 9-311. Perfection of security interests in property subject to
certain
statutes, regulations, and treaties.
(a) Security interest subject to other law. Except as otherwise
provided in subsection (d), the filing of a financing statement is not
necessary or
effective to perfect a security interest in property subject to:
(1) a statute, regulation, or treaty of the United |
| States whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to the property preempt Section 9-310(a);
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(2) the Illinois Vehicle Code or the Boat
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| Registration and Safety Act; or
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(3) a statute of another jurisdiction which provides
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| for a security interest to be indicated on a certificate of title as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the property.
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(b) Compliance with other law. Compliance with the
requirements of a statute, regulation, or treaty described in subsection (a)
for
obtaining priority over the rights of a lien creditor is equivalent to the
filing of a
financing statement under this Article. Except as otherwise provided in subsection
(d) and Sections 9-313 and 9-316(d) and (e) for goods covered by a certificate of
title, a security interest in property subject to a statute, regulation, or treaty
described in subsection (a) may be perfected only by compliance with those
requirements, and a security interest so perfected remains perfected
notwithstanding a change in the use or transfer of possession of the collateral.
(c) Duration and renewal of perfection. Except as otherwise
provided in subsection (d) and Section 9-316(d) and (e), duration and renewal
of
perfection of a security interest perfected by compliance with the requirements
prescribed by a statute, regulation, or treaty described in subsection (a) are
governed by the statute, regulation, or treaty. In other respects, the
security interest
is subject to this Article.
(d) Inapplicability to certain inventory. During any period in
which
collateral subject to a
statute specified in subsection (a)(2)
is inventory held for sale or lease by a person or leased by
that
person as lessor and that person is in the business of selling or leasing goods
of that
kind, this Section does not apply to a security interest in that collateral
created by
that person as debtor.
(Source: P.A. 97-1034, eff. 7-1-13 .)
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(810 ILCS 5/9-312) (from Ch. 26, par. 9-312)
Sec. 9-312. Perfection of security interests in chattel paper, deposit
accounts, documents, goods covered by documents, instruments, investment
property, letter-of-credit rights, and money; perfection by permissive filing;
temporary perfection without filing or transfer of possession.
(a) Perfection by filing permitted. A security interest in chattel
paper, negotiable documents, instruments,
beneficial interests in Illinois land trusts,
or investment property may be
perfected
by filing.
(b) Control or possession of certain collateral. Except as
otherwise provided in Section 9-315(c) and (d) for proceeds:
(1) a security interest in a deposit account may be |
| perfected only by control under Section 9-314;
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(2) and except as otherwise provided in Section
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| 9-308(d), a security interest in a letter-of-credit right may be perfected only by control under Section 9-314; and
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(3) a security interest in money may be perfected
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| only by the secured party's taking possession under Section 9-313.
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(c) Goods covered by negotiable document. While goods are in
the possession of a bailee that has issued a negotiable document covering the
goods:
(1) a security interest in the goods may be perfected
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| by perfecting a security interest in the document; and
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(2) a security interest perfected in the document has
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| priority over any security interest that becomes perfected in the goods by another method during that time.
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(d) Goods covered by nonnegotiable document. While goods are
in the possession of a bailee that has issued a nonnegotiable document covering the
goods, a security interest in the goods may be perfected by:
(1) issuance of a document in the name of the secured
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(2) the bailee's receipt of notification of the
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| secured party's interest; or
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(3) filing as to the goods.
(e) Temporary perfection: new value. A security interest in
certificated securities, negotiable documents, or instruments is perfected without
filing or the taking of possession or control for a period of 20 days from the time it attaches to
the extent that it arises for new value given under an authenticated security
agreement.
(f) Temporary perfection: goods or documents made available
to debtor. A perfected security interest in a negotiable document or goods in
possession of a bailee, other than one that has issued a negotiable document for the
goods, remains perfected for 20 days without filing if the secured party makes
available to the debtor the goods or documents representing the goods for the
purpose of:
(1) ultimate sale or exchange; or
(2) loading, unloading, storing, shipping,
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| transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.
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(g) Temporary perfection: delivery of security certificate or
instrument to debtor. A perfected security interest in a certificated security
or
instrument remains perfected for 20 days without filing if the secured party
delivers
the security certificate or instrument to the debtor for the purpose of:
(1) ultimate sale or exchange; or
(2) presentation, collection, enforcement, renewal,
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| or registration of transfer.
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(h) Expiration of temporary perfection. After the 20-day period
specified in subsection (e), (f), or (g) expires, perfection depends upon
compliance
with this Article.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/9-313) (from Ch. 26, par. 9-313)
Sec. 9-313. When possession by or delivery to secured party perfects
security interest without filing.
(a) Perfection by possession or delivery. Except as otherwise provided
in subsection (b), a secured party may perfect a security interest in
tangible negotiable documents, goods, instruments, money, or tangible chattel paper by
taking possession of the collateral. A secured party may perfect a security
interest in certificated securities by taking delivery of the certificated
securities under Section 8-301.
(b) Goods covered by certificate of title. With respect to goods covered
by a certificate of title issued by this State, a secured party may perfect a
security interest in the goods by taking possession of the goods only in the
circumstances described in Section 9-316(d).
(c) Collateral in possession of person other than debtor. With respect to
collateral other than certificated securities and goods covered by a document,
a secured party takes possession of collateral in the possession of a person
other than the debtor, the secured party, or a lessee of the collateral from
the debtor in the ordinary course of the debtor's business, when:
(1) the person in possession authenticates a record |
| acknowledging that it holds possession of the collateral for the secured party's benefit; or
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(2) the person takes possession of the collateral
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| after having authenticated a record acknowledging that it will hold possession of collateral for the secured party's benefit.
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(d) Time of perfection by possession; continuation of perfection. If
perfection of a security interest depends upon possession of the collateral by
a secured party, perfection occurs no earlier than the time the secured party
takes possession and continues only while the secured party retains possession.
(e) Time of perfection by delivery; continuation of perfection. A security
interest in a certificated security in registered form is perfected by
delivery when delivery of the certificated security occurs under Section 8-301
and remains perfected by delivery until the debtor obtains possession of the
security certificate.
(f) Acknowledgment not required. A person in possession of
collateral is not required to acknowledge that it holds possession for a
secured party's benefit.
(g) Effectiveness of acknowledgment; no duties or confirmation.
If a person acknowledges that it holds possession for the secured party's
benefit:
(1) the acknowledgment is effective under subsection
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| (c) or Section 8-301(a), even if the acknowledgment violates the rights of a debtor; and
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(2) unless the person otherwise agrees or law other
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| than this Article otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.
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(h) Secured party's delivery to person other than debtor. A secured
party having possession of collateral does not relinquish possession by
delivering the collateral to a person other than the debtor or a lessee
of the collateral from the debtor in the ordinary course of the debtor's
business if the person was instructed before the delivery or is instructed
contemporaneously with the delivery:
(1) to hold possession of the collateral for the
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| secured party's benefit; or
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(2) to redeliver the collateral to the secured party.
(i) Effect of delivery under subsection (h); no duties or confirmation.
A secured party does not relinquish possession, even if a delivery under
subsection (h) violates the rights of a debtor. A person to which collateral
is delivered under subsection (h) does not owe any duty to the secured party
and is not required to confirm the delivery to another person unless the
person otherwise agrees or law other than this Article otherwise provides.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/9-314) (from Ch. 26, par. 9-314)
Sec. 9-314. Perfection by control.
(a) Perfection by control. A security interest in investment
property, deposit accounts,
electronic chattel paper, letter-of-credit rights,
electronic documents, or beneficial interests in Illinois land trusts may be
perfected by control of the collateral under Section 7-106, 9-104, 9-105, 9-106,
9-107, or 9-107.1.
(b) Specified collateral: time of perfection by control;
continuation of perfection. A security interest in deposit accounts,
electronic
chattel paper, letter-of-credit rights,
electronic documents, or beneficial interests in Illinois land trusts
is perfected by control under Section
7-106, 9-104,
9-105, 9-107, or 9-107.1 when the secured party obtains control and
remains perfected by
control only while the secured party retains control.
(c) Investment property: time of perfection by control;
continuation of perfection. A security interest in investment property is
perfected
by control under Section 9-106 from the time the secured party obtains control
and
remains perfected by control until:
(1) the secured party does not have control; and
(2) one of the following occurs:
(A) if the collateral is a certificated security, |
| the debtor has or acquires possession of the security certificate;
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(B) if the collateral is an uncertificated
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| security, the issuer has registered or registers the debtor as the registered owner; or
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(C) if the collateral is a security entitlement,
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| the debtor is or becomes the entitlement holder.
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|
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/9-315) (from Ch. 26, par. 9-315)
Sec. 9-315.
Secured party's rights on disposition of collateral and in
proceeds.
(a) Disposition of collateral: continuation of security interest or
agricultural lien; proceeds. Except as otherwise provided in this Article and
in
Section 2-403(2):
(1) a security interest or agricultural lien |
| continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and
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(2) a security interest attaches to any identifiable
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|
(b) When commingled proceeds identifiable. Proceeds that are
commingled with other property are identifiable proceeds:
(1) if the proceeds are goods, to the extent provided
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|
(2) if the proceeds are not goods, to the extent that
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| the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this Article with respect to commingled property of the type involved.
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|
(c) Perfection of security interest in proceeds. A security interest
in proceeds is a perfected security interest if the security interest in the original
collateral was perfected.
(d) Continuation of perfection. A perfected security interest in
proceeds becomes unperfected on the 21st day after the security interest attaches to
the proceeds unless:
(1) the following conditions are satisfied:
(A) a filed financing statement covers the
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(B) the proceeds are collateral in which a
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| security interest may be perfected by filing in the office in which the financing statement has been filed; and
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(C) the proceeds are not acquired with cash
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(2) the proceeds are identifiable cash proceeds; or
(3) the security interest in the proceeds is
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| perfected other than under subsection (c) when the security interest attaches to the proceeds or within 20 days thereafter.
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|
(e) When perfected security interest in proceeds becomes
unperfected. If a filed financing statement covers the original collateral, a
security
interest in proceeds which remains perfected under subsection (d)(1) becomes
unperfected at the later of:
(1) when the effectiveness of the filed financing
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| statement lapses under Section 9-515 or is terminated under Section 9-513; or
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|
(2) the 21st day after the security interest attaches
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|
(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-316) (from Ch. 26, par. 9-316)
Sec. 9-316. Effect of change
in governing law. (a) General rule: effect on perfection of change in governing
law. A security interest perfected pursuant to the law of the jurisdiction
designated
in Section 9-301(1) or 9-305(c) remains perfected until the earliest of:
(1) the time perfection would have ceased under the |
| law of that jurisdiction;
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|
(2) the expiration of four months after a change of
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| the debtor's location to another jurisdiction; or
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|
(3) the expiration of one year after a transfer of
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| collateral to a person that thereby becomes a debtor and is located in another jurisdiction.
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|
(b) Security interest perfected or unperfected under law of new
jurisdiction. If a security interest described in subsection (a) becomes perfected
under the law of the other jurisdiction before the earliest time or event described in
that subsection, it remains perfected thereafter. If the security interest does not
become perfected under the law of the other jurisdiction before the earliest time or
event, it becomes unperfected and is deemed never to have been perfected as
against a purchaser of the collateral for value.
(c) Possessory security interest in collateral moved to new
jurisdiction. A possessory security interest in collateral, other than goods covered
by a certificate of title and as-extracted collateral consisting of goods, remains
continuously perfected if:
(1) the collateral is located in one jurisdiction and
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| subject to a security interest perfected under the law of that jurisdiction;
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|
(2) thereafter the collateral is brought into another
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(3) upon entry into the other jurisdiction, the
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| security interest is perfected under the law of the other jurisdiction.
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|
(d) Goods covered by certificate of title from this State. Except
as otherwise provided in subsection (e), a security interest in goods covered by a
certificate of title which is perfected by any method under the law of another
jurisdiction when the goods become covered by a certificate of title from this State
remains perfected until the security interest would have become unperfected
under
the law of the other jurisdiction had the goods not become so covered.
(e) When subsection (d) security interest becomes unperfected
against purchasers. A security interest described in subsection (d) becomes
unperfected as against a purchaser of the goods for value and is deemed never
to
have been perfected as against a purchaser of the goods for value if the
applicable
requirements for perfection under Section 9-311(b) or 9-313 are not satisfied
before
the earlier of:
(1) the time the security interest would have become
|
| unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from this State; or
|
|
(2) the expiration of four months after the goods had
|
|
(f) Change in jurisdiction of bank, issuer, nominated person,
securities intermediary, or commodity intermediary. A security interest in
deposit accounts, letter-of-credit rights, or investment property which is perfected
under the law of the bank's jurisdiction, the issuer's jurisdiction, a nominated
person's jurisdiction, the securities intermediary's jurisdiction, or the commodity
intermediary's jurisdiction, as applicable, remains perfected until the earlier of:
(1) the time the security interest would have become
|
| unperfected under the law of that jurisdiction; or
|
|
(2) the expiration of four months after a change of
|
| the applicable jurisdiction to another jurisdiction.
|
|
(g) Subsection (f) security interest perfected or unperfected
under law of new jurisdiction. If a security interest described in subsection
(f)
becomes perfected under the law of the other jurisdiction before the earlier of
the
time or the end of the period described in that subsection, it remains
perfected
thereafter. If the security interest does not become perfected under the law
of the
other jurisdiction before the earlier of that time or the end of that period,
it becomes
unperfected and is deemed never to have been perfected as against a purchaser
of
the collateral for value.
(h) Effect on filed financing statement of change in governing law. The following rules apply to collateral to which a security interest attaches within four months after the debtor changes its location to another jurisdiction:
(1) A financing statement filed before the change
|
| pursuant to the law of the jurisdiction designated in Section 9-301(1) or 9-305(c) is effective to perfect a security interest in the collateral if the financing statement would have been effective to perfect a security interest in the collateral had the debtor not changed its location.
|
|
(2) If a security interest perfected by a financing
|
| statement that is effective under paragraph (1) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in Section 9-301(1) or 9-305(c) or the expiration of the four-month period, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
|
|
(i) Effect of change in governing law on financing statement filed against original debtor. If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in Section 9-301(1) or 9-305(c) and the new debtor is located in another jurisdiction, the following rules apply:
(1) The financing statement is effective to perfect
|
| a security interest in collateral acquired by the new debtor before, and within four months after, the new debtor becomes bound under Section 9-203(d), if the financing statement would have been effective to perfect a security interest in the collateral had the collateral been acquired by the original debtor.
|
|
(2) A security interest perfected by the financing
|
| statement and which becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in Section 9-301(1) or 9-305(c) or the expiration of the four-month period remains perfected thereafter. A security interest that is perfected by the financing statement but which does not become perfected under the law of the other jurisdiction before the earlier time or event becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.
|
|
(Source: P.A. 97-1034, eff. 7-1-13 .)
|
(810 ILCS 5/9-317) (from Ch. 26, par. 9-317)
Sec. 9-317. Interests that take priority over or take free of
security interest or agricultural lien. (a) Conflicting security interests and rights of lien creditors. A
security interest or agricultural lien is subordinate to the rights
of:
(1) a person entitled to priority under Section |
|
(2) except as otherwise provided in subsection (e) or
|
| (f), a person that becomes a lien creditor before the earlier of the time:
|
|
(A) the security interest or agricultural lien is
|
|
(B) one of the conditions specified in Section
|
| 9-203(b)(3) is met and a financing statement covering the collateral is filed.
|
|
(b) Buyers that receive delivery. Except as otherwise provided in
subsection (e), a buyer, other than a secured party, of tangible chattel paper,
tangible documents, goods, instruments, or a certificated security takes free of a
security
interest or agricultural lien if the buyer gives value and receives delivery of
the
collateral without knowledge of the security interest or agricultural lien and
before
it is perfected.
(c) Lessees that receive delivery. Except as otherwise provided in
subsection (e), a lessee of goods takes free of a security interest or agricultural lien
if the lessee gives value and receives delivery of the collateral without knowledge
of the security interest or agricultural lien and before it is perfected.
(d) Licensees and buyers of certain collateral. A licensee of a
general intangible or a buyer, other than a secured party, of collateral other than tangible chattel paper, tangible documents, goods, instruments, or a certificated
security takes free of a security interest if the licensee or buyer gives value
without
knowledge of the security interest and before it is perfected.
(e) Purchase-money security interest. Except as otherwise
provided in Sections 9-320 and 9-321, if a person files a financing statement
with
respect to a purchase-money security interest before or within 20 days after
the
debtor receives delivery of the collateral, the security interest takes
priority over the
rights of a buyer, lessee, or lien creditor which arise between the time the
security
interest
attaches and the time of filing.
(f) Public deposits. An unperfected security interest shall take priority
over the rights of
a lien creditor if (i) the lien creditor is a trustee or receiver of a bank
or acting in furtherance of its
supervisory authority over such bank and (ii) a security interest is granted by
the bank to secure a deposit of
public funds with the bank or a repurchase agreement
with the bank pursuant to the Government Securities
Act of 1986, as amended.
(Source: P.A. 97-1034, eff. 7-1-13 .)
|
(810 ILCS 5/9-320)
Sec. 9-320.
Buyer of goods and farm products.
(a) Buyer in ordinary course of business. Except as otherwise
provided in subsections (e) and (f), a buyer in the ordinary course of business
takes free of a
security interest created by the buyer's seller, even if the security
interest
is perfected and the buyer knows of its existence.
(b) Buyer of consumer goods. Except as otherwise provided in
subsection (e), a buyer of goods from a person who used or bought the goods for
use primarily for personal, family, or household purposes takes free of a
security
interest, even if perfected, if the buyer buys:
(1) without knowledge of the security interest;
(2) for value;
(3) primarily for the buyer's personal, family, or |
|
(4) before the filing of a financing statement
|
|
(c) Effectiveness of filing for subsection (b). To the extent that it
affects the priority of a security interest over a buyer of goods under subsection (b),
the period of effectiveness of a filing made in the jurisdiction in which the
seller is
located is governed by Section 9-316(a) and (b).
(d) Buyer in ordinary course of business at wellhead or
minehead. A buyer in ordinary course of business buying oil, gas, or other
minerals at the wellhead or minehead or after extraction takes free of an
interest
arising out of an encumbrance.
(e) Possessory security interest not affected. Subsections (a) and
(b) do not affect a security interest in goods in the possession of the secured
party
under Section 9-313.
(f) Buyer of farm products.
(1) A buyer of farm products takes subject to a
|
| security interest created by the seller if:
|
|
(A) within one year before the sale of the farm
|
| products, the buyer has received from the secured party or the seller written notice of the security interest organized according to farm products that:
|
|
(i) is an original or reproduced copy thereof;
(ii) contains: (a) the name and address of
|
| the secured party; (b) the name and address of the person indebted to the secured party; (c) the social security number of the debtor or, in the case of a debtor doing business other than as an individual, the Internal Revenue Service taxpayer identification number of such debtor; (d) a description of the farm products subject to the security interest created by the debtor, including the amount of such products where applicable, crop year, county, and a reasonable description of the property;
|
|
(iii) must be amended in writing, within 3
|
| months, similarly signed and transmitted, to reflect material changes;
|
|
(iv) will lapse on either the expiration
|
| period of the statement or the transmission of a notice signed by the secured party that the statement has lapsed, whichever occurs first; and
|
|
(v) sets forth any payment obligations
|
| imposed on the buyer by the secured party as conditions for waiver or release of the security interest; and
|
|
(B) the buyer has failed to perform the payment
|
|
(2) For the purposes of this subsection (f), a buyer
|
| of farm products has received notice from the secured party or seller when written notice of the security interest is sent to the buyer by registered or certified mail.
|
|
(Source: P.A. 91-893, eff. 7-1-01.)
|
(810 ILCS 5/9-320.1)
Sec. 9-320.1.
Liability of commission merchant or selling agent engaged in
sale of livestock or other farm products to holder of security interest.
(a) A commission merchant or selling agent
who sells a farm product for others shall be subject to a security interest
created by the seller in
such farm product if:
(1) within one year before the sale of the farm |
| products, the buyer has received from the secured party or the seller written notice of the security interest organized according to farm products that:
|
|
(A) is an original or reproduced copy thereof;
(B) contains: (i) the name and address of the
|
| secured party; (ii) the name and address of the person indebted to the secured party; (iii) the social security number of the debtor or, in case of a debtor doing business other than as an individual, the Internal Revenue Service taxpayer identification number of such debtor; (iv) a description of the farm products subject to the security interest created by the debtor, including the amount of such products where applicable, crop year, county, and a reasonable description of the property;
|
|
(C) must be amended in writing, within 3 months,
|
| similarly signed and transmitted, to reflect material changes;
|
|
(D) will lapse on either the expiration period of
|
| the statement or the transmission of a notice signed by the secured party that the statement has lapsed, whichever occurs first; and
|
|
(E) sets forth any payment obligations imposed on
|
| the buyer by the secured party as conditions for waiver or release of the security interest; and
|
|
(2) the commission merchant or selling agent has
|
| failed to perform the payment obligations.
|
|
(b) For the purposes of this Section, a commission merchant or selling
agent has received notice from the secured party or seller when written
notice of the security
interest is sent to the commission merchant or selling agent by registered or
certified mail.
(Source: P.A. 91-893, eff. 7-1-01.)
|
(810 ILCS 5/9-322)
Sec. 9-322.
Priorities among conflicting security interests in and
agricultural liens on same collateral.
(a) General priority rules. Except as otherwise provided in this
Section, priority among conflicting security interests and agricultural liens
in the
same collateral is determined according to the following rules:
(1) Conflicting perfected security interests and |
| agricultural liens rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest or agricultural lien is first perfected, if there is no period thereafter when there is neither filing nor perfection.
|
|
(2) A perfected security interest or agricultural
|
| lien has priority over a conflicting unperfected security interest or agricultural lien.
|
|
(3) The first security interest or agricultural lien
|
| to attach or become effective has priority if conflicting security interests and agricultural liens are unperfected.
|
|
(b) Time of perfection: proceeds and supporting obligations.
For the purposes of subsection (a)(1):
(1) the time of filing or perfection as to a security
|
| interest in collateral is also the time of filing or perfection as to a security interest in proceeds; and
|
|
(2) the time of filing or perfection as to a security
|
| interest in collateral supported by a supporting obligation is also the time of filing or perfection as to a security interest in the supporting obligation.
|
|
(c) Special priority rules: proceeds and supporting obligations.
Except as otherwise provided in subsection (f), a security interest in
collateral
which qualifies for priority over a conflicting security interest under Section
9-327,
9-328, 9-329, 9-329.1, 9-330, or 9-331 also has priority over a conflicting
security interest
in:
(1) any supporting obligation for the collateral; and
(2) proceeds of the collateral if:
(A) the security interest in proceeds is
|
|
(B) the proceeds are cash proceeds or of the same
|
| type as the collateral; and
|
|
(C) in the case of proceeds that are proceeds of
|
| proceeds, all intervening proceeds are cash proceeds, proceeds of the same type as the collateral, or an account relating to the collateral.
|
|
(d) First-to-file priority rule for certain collateral. Subject to
subsection (e) and except as otherwise provided in subsection (f), if a
security
interest in chattel paper, deposit accounts, negotiable documents, instruments,
investment property, letter-of-credit rights,
or beneficial interests in Illinois land trusts
is perfected by a method other than
filing, conflicting perfected security interests in proceeds of the collateral
rank
according to priority in time of filing.
(e) Applicability of subsection (d). Subsection (d) applies only if
the proceeds of the collateral are not cash proceeds, chattel paper, negotiable
documents, instruments, investment property,
beneficial interests in Illinois land trusts,
or letter-of-credit rights.
(f) Limitations on subsections (a) through (e). Subsections (a)
through (e) are subject to:
(1) subsection (g) and the other provisions of this
|
|
(2) Section 4-210 with respect to a security interest
|
|
(3) Section 5-118 with respect to a security interest
|
| of an issuer or nominated person; and
|
|
(4) Section 9-110 with respect to a security interest
|
| arising under Article 2 or 2A.
|
|
(g) Priority under agricultural lien statute. A perfected
agricultural lien on collateral has priority over a conflicting security
interest in or
agricultural lien on the same collateral if the statute creating the
agricultural lien so
provides.
(Source: P.A. 91-893, eff. 7-1-01; 92-234, eff. 1-1-02.)
|
(810 ILCS 5/9-323)
Sec. 9-323.
Future advances.
(a) When priority based on time of advance. Except as otherwise
provided in subsection (c), for purposes of determining the priority of a
perfected
security interest under Section 9-322(a)(1), perfection of the security interest dates
from the time an advance is made to the extent that the security interest secures an
advance that:
(1) is made while the security interest is perfected |
|
(A) under Section 9-309 when it attaches; or
(B) temporarily under Section 9-312(e), (f), or
|
|
(2) is not made pursuant to a commitment entered into
|
| before or while the security interest is perfected by a method other than under Section 9-309 or 9-312(e), (f), or (g).
|
|
(b) Lien creditor. Except as otherwise provided in subsection (c),
a security interest is subordinate to the
rights of a person that becomes a lien creditor to the extent that the
security interest secures an advance made more than 45 days after the
person
becomes a lien creditor unless
the advance is made:
(1) without knowledge of the lien; or
(2) pursuant to a commitment entered into without
|
|
(c) Buyer of receivables. Subsections (a) and (b) do not apply to a
security interest held by a secured party that is a buyer of accounts, chattel paper,
payment intangibles, or promissory notes or a consignor.
(d) Buyer of goods. Except as otherwise provided in subsection
(e), a buyer of goods other than a buyer in ordinary course of business takes free of
a security interest to the extent that it secures advances made after the earlier of:
(1) the time the secured party acquires knowledge of
|
|
(2) 45 days after the purchase.
(e) Advances made pursuant to commitment: priority of buyer
of goods. Subsection (d) does not apply if the advance is made pursuant to a
commitment entered into without knowledge of the buyer's purchase and before the
expiration of the 45-day period.
(f) Lessee of goods. Except as otherwise provided in subsection
(g), a lessee of goods, other than a lessee in ordinary course of business,
takes the
leasehold interest free of a security interest to the extent that it secures
advances
made after the earlier of:
(1) the time the secured party acquires knowledge of
|
|
(2) 45 days after the lease contract becomes
|
|
(g) Advances made pursuant to commitment: priority of lessee
of goods. Subsection (f) does not apply if the advance is made pursuant to a
commitment entered into without knowledge of the lease and before the
expiration
of the 45-day period.
(Source: P.A. 91-893, eff. 7-1-01.)
|
(810 ILCS 5/9-324)
Sec. 9-324.
Priority of purchase-money security interests.
(a) General rule: purchase-money priority. Except as otherwise
provided in subsection (g), a perfected purchase-money security interest in
goods
other than inventory or livestock has priority over a conflicting security
interest in
the same goods, and, except as otherwise provided in Section 9-327, a perfected
security interest in its identifiable proceeds also has priority, if the
purchase-money
security interest is perfected when the debtor receives possession of the
collateral or
within 20 days thereafter.
(b) Inventory purchase-money priority. Subject to subsection (c)
and except as otherwise provided in subsection (g), a perfected purchase-money
security interest in inventory has priority over a conflicting security
interest in the
same inventory, has priority over a conflicting security interest in chattel paper or
an instrument constituting proceeds of the inventory and in proceeds of the chattel
paper, if so provided in Section 9-330, and, except as otherwise provided in Section
9-327, also has priority in identifiable cash proceeds of the inventory to the extent
the identifiable cash proceeds are received on or before the delivery of the
inventory to a buyer, if:
(1) the purchase-money security interest is perfected |
| when the debtor receives possession of the inventory;
|
|
(2) the purchase-money secured party sends an
|
| authenticated notification to the holder of the conflicting security interest;
|
|
(3) the holder of the conflicting security interest
|
| receives the notification within five years before the debtor receives possession of the inventory; and
|
|
(4) the notification states that the person sending
|
| the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.
|
|
(c) Holders of conflicting inventory security interests to be
notified. Subsections (b)(2) through (4) apply only if the holder of the conflicting
security interest had filed a financing statement covering the same types of
inventory:
(1) if the purchase-money security interest is
|
| perfected by filing, before the date of the filing; or
|
|
(2) if the purchase-money security interest is
|
| temporarily perfected without filing or possession under Section 9-312(f), before the beginning of the 20-day period thereunder.
|
|
(d) Livestock purchase-money priority. Subject to subsection (e)
and except as otherwise provided in subsection (g), a perfected purchase-money
security interest in livestock that are farm products has priority over a conflicting
security interest in the same livestock, and, except as otherwise provided in Section
9-327, a perfected security interest in their identifiable proceeds and identifiable
products in their unmanufactured states also has priority, if:
(1) the purchase-money security interest is perfected
|
| when the debtor receives possession of the livestock;
|
|
(2) the purchase-money secured party sends an
|
| authenticated notification to the holder of the conflicting security interest;
|
|
(3) the holder of the conflicting security interest
|
| receives the notification within six months before the debtor receives possession of the livestock; and
|
|
(4) the notification states that the person sending
|
| the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock.
|
|
(e) Holders of conflicting livestock security interests to be
notified. Subsections (d)(2) through (4) apply only if the holder of the conflicting
security interest had filed a financing statement covering the same types of
livestock:
(1) if the purchase-money security interest is
|
| perfected by filing, before the date of the filing; or
|
|
(2) if the purchase-money security interest is
|
| temporarily perfected without filing or possession under Section 9-312(f), before the beginning of the 20-day period thereunder.
|
|
(f) Software purchase-money priority. Except as otherwise
provided in subsection (g), a perfected purchase-money security interest in software
has priority over a conflicting security interest in the same collateral, and, except as
otherwise provided in Section 9-327, a perfected security interest in its identifiable
proceeds also has priority, to the extent that the purchase-money security interest in
the goods in which the software was acquired for use has priority in the goods and
proceeds of the goods under this Section.
(g) Conflicting purchase-money security interests. If more than
one security interest qualifies for priority in the same collateral under
subsection
(a), (b), (d), or (f):
(1) a security interest securing an obligation
|
| incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and
|
|
(2) in all other cases, Section 9-322(a) applies to
|
| the qualifying security interests.
|
|
(Source: P.A. 91-893, eff. 7-1-01.)
|
(810 ILCS 5/9-325)
Sec. 9-325.
Priority of security interests in transferred collateral.
(a) Subordination of security interest in transferred collateral.
Except as otherwise provided in subsection (b), a security interest created by
a
debtor is subordinate to a security interest in the same collateral created by
another
person if:
(1) the debtor acquired the collateral subject to the |
| security interest created by the other person;
|
|
(2) the security interest created by the other person
|
| was perfected when the debtor acquired the collateral; and
|
|
(3) there is no period thereafter when the security
|
|
(b) Limitation of subsection (a) subordination. Subsection (a)
subordinates a security interest only if the security interest:
(1) otherwise would have priority solely under
|
| Section 9-322(a) or 9-324; or
|
|
(2) arose solely under Section 2-711(3) or 2A-508(5).
(Source: P.A. 91-893, eff. 7-1-01.)
|
(810 ILCS 5/9-328)
Sec. 9-328.
Priority of security interests in investment property.
The
following rules govern priority among conflicting security interests in the
same
investment property:
(1) A security interest held by a secured party having control of
investment property under Section 9-106 has priority over a security interest
held
by a secured party that does not have control of the investment property.
(2) Except as otherwise provided in paragraphs (3) and (4),
conflicting security interests held by secured parties each of which has
control
under Section 9-106 rank according to priority in time of:
(A) if the collateral is a security, obtaining |
|
(B) if the collateral is a security entitlement
|
| carried in a securities account and:
|
|
(i) if the secured party obtained control under
|
| Section 8-106(d)(1), the secured party's becoming the person for which the securities account is maintained;
|
|
(ii) if the secured party obtained control under
|
| Section 8-106(d)(2), the securities intermediary's agreement to comply with the secured party's entitlement orders with respect to security entitlements carried or to be carried in the securities account; or
|
|
(iii) if the secured party obtained control
|
| through another person under Section 8-106(d)(3), the time on which priority would be based under this paragraph if the other person were the secured party; or
|
|
(C) if the collateral is a commodity contract carried
|
| with a commodity intermediary, the satisfaction of the requirement for control specified in Section 9-106(b)(2) with respect to commodity contracts carried or to be carried with the commodity intermediary.
|
|
(3) A security interest held by a securities intermediary in a security
entitlement or a securities account maintained with the securities intermediary
has
priority over a conflicting security interest held by another secured party.
(4) A security interest held by a commodity intermediary in a
commodity contract or a commodity account maintained with the commodity
intermediary has priority over a conflicting security interest held by another
secured party.
(5) A security interest in a certificated security in registered form
which is perfected by taking delivery under Section 9-313(a) and not by control
under Section 9-314 has priority over a conflicting security interest perfected
by a
method other than control.
(6) Conflicting security interests created by a broker, securities
intermediary, or commodity intermediary which are perfected without control
under Section 9-106 rank equally.
(7) In all other cases, priority among conflicting security interests in
investment property is governed by Sections 9-322 and 9-323.
(Source: P.A. 91-893, eff. 7-1-01.)
|
(810 ILCS 5/9-330)
Sec. 9-330.
Priority of purchaser of chattel paper or instrument.
(a) Purchaser's priority: security interest claimed merely as
proceeds. A purchaser of chattel paper has priority over a security interest
in the
chattel paper which is claimed merely as proceeds of inventory subject to a
security
interest if:
(1) in good faith and in the ordinary course of the |
| purchaser's business, the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under Section 9-105; and
|
|
(2) the chattel paper does not indicate that it has
|
| been assigned to an identified assignee other than the purchaser.
|
|
(b) Purchaser's priority: other security interests. A purchaser
of chattel paper has priority over a security interest in the chattel paper which is
claimed other than merely as proceeds of inventory subject to a security interest if
the purchaser gives new value and takes possession of the chattel paper or obtains
control of the chattel paper under Section 9-105 in good faith, in the ordinary
course of the purchaser's business, and without knowledge that the purchase
violates the rights of the secured party.
(c) Chattel paper purchaser's priority in proceeds. Except as
otherwise provided in Section 9-327, a purchaser having priority in chattel paper
under subsection (a) or (b) also has priority in proceeds of the chattel paper to the
extent that:
(1) Section 9-322 provides for priority in the
|
|
(2) the proceeds consist of the specific goods
|
| covered by the chattel paper or cash proceeds of the specific goods, even if the purchaser's security interest in the proceeds is unperfected.
|
|
(d) Instrument purchaser's priority. Except as otherwise
provided in Section 9-331(a), a purchaser of an instrument has priority over a
security interest in the instrument perfected by a method other than possession if
the purchaser gives value and takes possession of the instrument in good faith and
without knowledge that the purchase violates the rights of the secured party.
(e) Holder of purchase-money security interest gives new value.
For purposes of subsections (a) and (b), the holder of a purchase-money
security
interest in inventory gives new value for chattel paper constituting proceeds
of the
inventory.
(f) Indication of assignment gives knowledge. For purposes of
subsections (b) and (d), if chattel paper or an instrument indicates that it
has been
assigned to an identified secured party other than the purchaser, a purchaser
of the
chattel paper or instrument has knowledge that the purchase violates the rights
of
the secured party.
(Source: P.A. 91-893, eff. 7-1-01.)
|
(810 ILCS 5/9-334)
Sec. 9-334.
Priority of security interests in fixtures and crops.
(a) Security interest in fixtures under this Article. A security
interest under this Article may be created in goods that are fixtures or may
continue
in goods that become fixtures. A security interest does not exist under this
Article
in ordinary building materials incorporated into an improvement on land.
(b) Security interest in fixtures under real-property law. This
Article does not prevent creation of an encumbrance upon fixtures under real
property law.
(c) General rule: subordination of security interest in fixtures.
In cases not governed by subsections (d) through (h), a security interest in
fixtures
is subordinate to a conflicting interest of an encumbrancer or owner of the
related
real property other than the debtor.
(d) Fixtures purchase-money priority. Except as otherwise
provided in subsection (h), a perfected security interest in fixtures has
priority over
a conflicting interest of an encumbrancer or owner of the real property if the
debtor
has an interest of record in or is in possession of the real property and:
(1) the security interest is a purchase-money |
|
(2) the interest of the encumbrancer or owner arises
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| before the goods become fixtures; and
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(3) the security interest is perfected by a fixture
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| filing before the goods become fixtures or within 20 days thereafter.
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(e) Priority of security interest in fixtures over interests in real
property. A perfected security interest in fixtures has priority over a conflicting
interest of an encumbrancer or owner of the real property if:
(1) the debtor has an interest of record in the real
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| property or is in possession of the real property and the security interest:
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|
(A) is perfected by a fixture filing before the
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| interest of the encumbrancer or owner is of record; and
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|
(B) has priority over any conflicting interest of
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| a predecessor in title of the encumbrancer or owner;
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|
(2) before the goods become fixtures, the security
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| interest is perfected by any method permitted by this Article and the fixtures are readily removable:
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|
(A) factory or office machines;
(B) equipment that is not primarily used or
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| leased for use in the operation of the real property; or
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|
(C) replacements of domestic appliances that are
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|
(3) the conflicting interest is a lien on the real
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| property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this Article; or
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|
(4) the security interest is:
(A) created in a manufactured home in a
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| manufactured-home transaction; and
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|
(B) perfected pursuant to a statute described in
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|
(f) Priority based on consent, disclaimer, or right to remove. A
security interest in fixtures, whether or not perfected, has priority over a
conflicting
interest of an encumbrancer or owner of the real property if:
(1) the encumbrancer or owner has, in an
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| authenticated record, consented to the security interest or disclaimed an interest in the goods as fixtures; or
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|
(2) the debtor has a right to remove the goods as
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| against the encumbrancer or owner.
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|
(g) Continuation of subsection (f)(2) priority. The priority of the
security interest under subsection (f)(2) continues for a reasonable time if
the debtor's
right to remove the goods as against the encumbrancer or owner terminates.
(h) Priority of construction mortgage. A mortgage is a
construction mortgage to the extent that it secures an obligation incurred for the
construction of an improvement on land, including the acquisition cost of the land,
if a recorded record of the mortgage so indicates. Except as otherwise
provided in
subsections (e) and (f), a security interest in fixtures is subordinate to a
construction
mortgage if a record of the mortgage is recorded before the goods become
fixtures
and the goods become fixtures before the completion of the construction. A
mortgage has this priority to the same extent as a construction mortgage to the
extent that it is given to refinance a construction mortgage.
(i) Priority of security interest in crops.
(1) Subject to Section 9-322(g), a perfected security
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| interest in crops growing on real property has priority over:
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|
(A) a conflicting interest of an encumbrancer or
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| owner of the real property; and
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|
(B) the rights of a holder of an obligation
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| secured by a collateral assignment of beneficial interest in a land trust, including rights by virtue of an equitable lien.
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|
(2) For purposes of this subsection:
(A) "Collateral assignment of beneficial
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| interest" means any pledge or assignment of the beneficial interest in a land trust to a person to secure a debt to other obligation.
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|
(B) "Land trust" means any trust arrangement
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| under which the legal and equitable title to real estate is held by a trustee, the interest of the beneficiary of the trust is personal property, and the beneficiary or any person designated in writing by the beneficiary has (i) the exclusive power to direct or control the trustee in dealing with the title to the trust property, (ii) the exclusive control of the management, operation, renting, and selling of the trust property, and (iii) the exclusive right to the earnings, avails, and proceeds of trust property.
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|
(Source: P.A. 91-893, eff. 7-1-01.)
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(810 ILCS 5/9-338)
Sec. 9-338. Priority of security interest or agricultural lien perfected
by
filed financing statement providing certain incorrect information. If a
security
interest or agricultural lien is perfected by a filed financing statement
providing
information described in Section 9-516(b)(5) which is incorrect at the time the
financing statement is filed:
(1) the security interest or agricultural lien is |
| subordinate to a conflicting perfected security interest in the collateral to the extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and
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|
(2) a purchaser, other than a secured party, of the
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| collateral takes free of the security interest or agricultural lien to the extent that, in reasonable reliance upon the incorrect information, the purchaser gives value and, in the case of tangible chattel paper, tangible documents, goods, instruments, or a security certificate, receives delivery of the collateral.
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|
(Source: P.A. 95-895, eff. 1-1-09.)
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