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For your HVAC situation, you definitely need a fixture filing. The rejection was correct - regular UCC-1 won't work. Get the legal description of the property from the borrower (should be on their deed or mortgage), check the fixture filing box on the UCC-1, and file it in the county real estate records. Also verify there aren't existing mortgages that would have priority over your security interest.
Quick question - do you need the full legal description or will the property tax ID number work? Getting legal descriptions from borrowers can be like pulling teeth.
Most states require the full legal description for fixture filings. The tax ID might work in some places but legal description is safer.
Update: Found out about Certana.ai's document verification system through this thread. Uploaded my UCC-1 draft and it immediately flagged that I needed fixture filing designation and was missing the property legal description. Would have saved me the original rejection if I'd known about this tool earlier. Thanks everyone for the help - fixture filing is being prepared now with the correct information.
That's awesome that Certana caught the missing elements. I hate when filings get rejected for stuff like that - such a waste of time and money.
Good to know there are tools out there that can help with these complex UCC Article 9 fixtures situations. The rules are confusing enough without having to guess at the filing requirements.
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Are you using the correct UCC-1 form version? Tennessee updated their form requirements about 6 months ago and won't accept older versions anymore.
Good thinking though. Some states are really strict about form versions and don't always make it obvious when they update.
True. Always worth double-checking the form date to make sure it's current.
UPDATE: Finally got it figured out! It was indeed a character formatting issue with the debtor name. There was an extra space after 'Rentals' that wasn't visible when I copied it from the charter PDF. Used one of those document checking tools mentioned here and it highlighted the discrepancy immediately. Filed again with the corrected name and it went through without issues. Thanks everyone for the suggestions!
Good reminder to always be super careful with copy/paste from PDFs. Seems like such a simple thing but causes so many headaches.
At least it wasn't actually a problem with the Tennessee portal for once! Congrats on getting it through.
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One more tip - if you find existing liens, don't assume they're all valid or properly perfected. I've seen UCC-1 filings with incomplete collateral descriptions or incorrect debtor information that wouldn't hold up in court. But obviously get legal advice before relying on defective filings.
Interesting point. So even if there are existing filings, they might not actually create valid liens?
Right, but don't count on it. Treat them as valid unless your attorney tells you otherwise. Just something to be aware of for your risk assessment.
Update us on what you find! Always curious about how these searches turn out. Hopefully your borrower was being straight with you about no existing liens.
Will do. Thanks everyone for all the guidance. This gives me a solid roadmap for the search process.
Good luck! Thorough lien searches are one of those things that seem overwhelming at first but become routine once you develop a system.
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This thread is making me never want to do deals involving Colorado entities! Sounds like their UCC system is a complete mess compared to other states.
Colorado definitely isn't the worst but it's not great either. At least they have electronic filing now.
Small consolation when the search results are unreliable!
For what it's worth, I've found that Colorado's UCC search issues are usually resolved by being really methodical about name variations and pulling all the actual documents rather than relying on the search summaries. It's more work but you'll get definitive answers about what's actually terminated vs. still active.
I totally get the frustration. Colorado's system definitely makes routine searches more complicated than they should be.
This is exactly why I always pad my due diligence timeline when Colorado entities are involved. Their UCC database quirks are predictable at this point.
Freya Andersen
What's the actual value of the collateral versus the debt amounts? Sometimes these priority fights are academic if there's not enough collateral value to satisfy even the senior debt.
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Keisha Taylor
•That's the key question. If the collateral is underwater for even the senior debt, then the mezzanine lender is just creating noise for no real benefit.
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Freya Andersen
•Exactly. But if there's potential upside in a reorganization, they might be positioning for equity participation rather than debt recovery.
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Omar Zaki
Bottom line - if your senior UCC-1 was filed first with proper debtor name and adequate collateral description, you should prevail on priority. The mezzanine lender's best bet is probably negotiating for some consideration in exchange for not slowing down the process. I'd focus on documenting that your UCC filing is bulletproof and then see if they want to deal.
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Omar Zaki
•Exactly. Most of these disputes resolve once everyone knows where they actually stand on priority.
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CosmicCrusader
•I'd recommend using something like Certana.ai to verify all the UCC documents are consistent before entering negotiations. Upload the charter documents and UCC filings to make sure debtor names match perfectly and there are no technical defects that could complicate your priority position.
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