§ 26-1-9.1-334 — Priority of security interests in fixtures and crops

Indiana § 26-1-9.1-334

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 9.1: Secured Transactions

Text

(a) A security interest under IC 26-1-9.1
may be created in goods that are fixtures or may continue in goods that
become fixtures. A security interest does not exist under IC 26-1-9.1 in
ordinary building materials incorporated into an improvement on land.
(b) IC 26-1-9.1 does not prevent creation of an encumbrance upon
fixtures under real property law.
(c) 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) 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 security interest;
(2) the interest of the encumbrancer or owner arises before the
goods become fixtures; and
(3) the security interest is perfected by a fixture filing before the
goods become fixtures or within twenty (20) days thereafter.
(e) 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 property or is in
possession of the real property and the security interest:
(A) is perfected by a fixture filing before the interest of the
encumbrancer or owner is of record; and
(B) has priority over any conflicting interest of a predecessor in
title of the encumbrancer or owner;
(2) before the goods become fixtures, the security interest is
perfected by any method permitted by IC 26-1-9.1 and the fixtures
are readily removable:
(A) factory or office machines;
(B) equipment that is not primarily used or leased for use in the
operation of the real property; or
(C) replacements of domestic appliances that are consumer
goods;
(3) the conflicting interest is a lien on the real property obtained
by legal or equitable proceedings after the security interest was
perfected by any method permitted by IC 26-1-9.1; or
(4) the security interest is:
(A) created in a manufactured home in a manufactured-home
transaction; and
(B) perfected pursuant to a statute described in IC 26-1-9.1-311(a)(2).
(f) 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 a signed record, consented
to the security interest or disclaimed an interest in the goods as
fixtures; or
(2) the debtor has a right to remove the goods against the
encumbrancer or owner.
(g) The priority of the security interest under subsection (f)
continues for a reasonable time if the debtor's right to remove the goods
as against the encumbrancer or owner terminates.
(h) 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) A perfected security interest in crops growing on real property
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.

Legislative History

As added by P.L.57-2000, SEC.45. Amended by P.L.199-2023, SEC.69.