§ 33-5B-24 — Rights of Secured Party

(a) Subject to subsection (b), the effect of perfection and nonperfection of a security interest and the priority of a perfected or unperfected security interest with respect to the rights of a purchaser or creditor, including a lien creditor, is governed by Title 7. For purposes of the application of the provisions of Title 7, lien creditor has the meaning provided by this chapter.
(b) If, while a security interest in a vessel is perfected by any method under this chapter, the office creates a certificate of title that does not indicate that the vessel is subject to the security interest or contain a statement that it may be subject to security interests not indicated on the certificate:
(1) a buyer of the vessel, other than a person in the business of selling or leasing vessels of that kind, takes free of the security interest if the buyer, acting in good faith and without knowledge of the security interest, gives value and receives possession of the vessel; and
(2) the security interest is subordinate to a conflicting security interest in the vessel that is perfected under Section 33-5B-15 after creation of the certificate and without the conflicting secured party’s knowledge of the security interest.

Legislative History

(Act 2022-144, §24.)