§ 41-09-36 — (9-316) Effect of change in governing law

1. A security interest perfected pursuant to the law of the jurisdiction designated in
subsection 1 of section 41-09-21, subsection 3 of section 41-09-25, subsection 4 of
section 41-09-26.1, or subsection 2 of section 41-09-26.2 remains perfected until the
earliest of:
a. The time perfection would have ceased under the law of that jurisdiction;
b. The expiration of four months after a change of the debtor's location to another
jurisdiction; or
c. The expiration of one year after a transfer of collateral to a person that thereby
becomes a debtor and is located in another jurisdiction.
2. If a security interest described in subsection 1 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.
3. 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:
a. The collateral is located in one jurisdiction and subject to a security interest
perfected under the law of that jurisdiction;
b. Thereafter the collateral is brought into another jurisdiction; and
c. Upon entry into the other jurisdiction, the security interest is perfected under the
law of the other jurisdiction.
4. Except as otherwise provided in subsection 5, 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.
5. A security interest described in subsection 4 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 subsection 2 of section 41-09-31 or section 41-09-33 are not satisfied before the
earlier of:
a. 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
b. The expiration of four months after the goods had become so covered.
6. A security interest in chattel paper, controllable accounts, controllable electronic
records, controllable payment intangibles, deposit accounts, certificates of deposit,
letter-of-credit rights, or investment property which is perfected under the law of the
chattel paper's jurisdiction, the controllable electronic record's jurisdiction, 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:
a. The time the security interest would have become unperfected under the law of
that jurisdiction; or
b. The expiration of four months after a change of the applicable jurisdiction to
another jurisdiction.
7. If a security interest described in subsection 6 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.
8. The following rules apply to collateral to which a security interest attaches within four
months after the debtor changes its location to another jurisdiction:

a. A financing statement filed before the change pursuant to the law of the
jurisdiction designated in subsection 1 of section 41-09-21 or subsection 3 of
section 41-09-25 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 if the debtor had not changed its location.
b. If a security interest that is perfected by a financing statement that is effective
under subdivision a 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 subsection 1 of section
41-09-21 or subsection 3 of section 41-09-25 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.
9. If a financing statement naming an original debtor is filed pursuant to the law of the
jurisdiction designated in subsection 1 of section 41-09-21 or subsection 3 of section
41-09-25 and the new debtor is located in another jurisdiction, the following rules
apply:
a. The financing statement is effective to perfect a security interest in collateral in
which the new debtor has or acquires rights before or within four months after the
new debtor becomes bound under subsection 4 of section 41-09-13, if the
financing statement would have been effective to perfect a security interest in the
collateral if the collateral had been acquired by the original debtor.
b. A security interest that is perfected by the financing statement and which
becomes perfected under the law of the other jurisdiction before the earlier of the
expiration of the four-month period or the time the financing statement would
have become ineffective under the law of the jurisdiction designated in
subsection 1 of section 41-09-21 or subsection 3 of section 41-09-25 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.