57A-9-404. Rights acquired by assignee--Claims and defenses against assignee.

(a) Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subsections (b) through (e), the rights of an assignee are subject to:

(1)    All terms of the agreement between the account debtor and assignor and any defense or claim in recoupment arising from the transaction that gave rise to the contract; and

(2)    Any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives a notification of the assignment signed by the assignor or the assignee.

(b) Subject to subsection (c) and except as otherwise provided in subsection (d), the claim of an account debtor against an assignor may be asserted against an assignee under subsection (a) only to reduce the amount the account debtor owes.

(c) This section is subject to law other than this article which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.

(d) In a consumer transaction, if a record evidences the account debtor's obligation, law other than this chapter requires that the record include a statement to the effect that the account debtor's recovery against an assignee with respect to claims and defenses against the assignor may not exceed amounts paid by the account debtor under the record, and the record does not include such a statement, the extent to which a claim of an account debtor against the assignor may be asserted against an assignee is determined as if the record included such a statement.

(e) This section does not apply to an assignment of a health-care-insurance receivable.

Source: SL 2000, ch 231; SL 2024, ch 198, § 75.

57A-9-405. Effect of modification or substitution of assigned contract.

(a) A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that the modification or substitution is a breach of contract by the assignor. This subsection is subject to subsections (b) through (d).

(b) Subsection (a) applies to the extent that:

(1)    The right to payment or a part thereof under an assigned contract has not been fully earned by performance; or

(2)    The right to payment or a part thereof has been fully earned by performance and the account debtor has not received notification of the assignment under § 57A-9-406(a).

(c) This section is subject to law other than this article which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.

(d) This section does not apply to an assignment of a health-care-insurance receivable.

Source: SL 2000, ch 231.

57A-9-406. Discharge of account debtor--Notification of assignment--Identification and proof of assignment--Restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective.

(a) Subject to subsections (b) through (i) and (l), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, signed by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.

(b) Subject to subsections (h) and (l), notification is ineffective under subsection (a):

(1)    If it does not reasonably identify the rights assigned;

(2)    To the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor's duty to pay a person other than the seller and the limitation is effective under law other than this article; or

(3)    At the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if:

(A)    Only a portion of the account, chattel paper, or payment intangible has been assigned to that assignee;

(B)    A portion has been assigned to another assignee; or

(C)    The account debtor knows that the assignment to that assignee is limited.

(c) Subject to subsections (h) and (l), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection (a).

(d) In this subsection, "promissory note" includes a negotiable instrument that evidences chattel paper. Except as otherwise provided in subsections (e) and (k) and §§ 57A-2A-303 and 57A-9-407, and subject to subsection (h), a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:

(1)    Prohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or

(2)    Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note.

(e) Subsection (d) does not apply to the sale of a payment intangible or promissory note other than a sale pursuant to a disposition under § 57A-9-610 or an acceptance of collateral under § 57A-9-620.

(f) Except as otherwise provided in subsection (k) and §§ 57A-2A-303 and 57A-9-407 and subject to subsections (h) and (i), a rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute, or regulation:

(1)    Prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in the account or chattel paper; or

(2)    Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper.

(g) Subject to subsections (h) and (l), an account debtor may not waive or vary its option under subsection (b)(3).

(h) This section is subject to law other than this article which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.

(i) This section does not apply to an assignment of a health-care-insurance receivable.

(j) This section prevails over any inconsistent statute.

(k) Subsections (d), (f), and (j) do not apply to a security interest in an ownership interest in a general partnership, limited partnership, or limited liability company.

(l) Subsections (a), (b), (c), and (g) do not apply to a controllable account or controllable payment intangible.

Source: SL 2000, ch 231; SL 2012, ch 238, § 8, eff. July 1, 2013; SL 2024, ch 198, § 76.

57A-9-407. Ineffective prohibitions or restrictions in lease agreement.

(a) Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:

(1)    Prohibits, restricts, or requires the consent of a party to the lease to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, an interest of a party under the lease contract or in the lessor's residual interest in the goods; or

(2)    Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease.

(b) Except as otherwise provided in § 57A-2A-303(7), a term described in subsection (a)(2) is effective to the extent that there is:

(1)    A transfer by the lessee of the lessee's right of possession or use of the goods in violation of the term; or

(2)    A delegation of a material performance of either party to the lease contract in violation of the term.

(c) The creation, attachment, perfection, or enforcement of a security interest in the lessor's interest under the lease contract or the lessor's residual interest in the goods is not a transfer that materially impairs the lessee's prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of § 57A-2A-303(4) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.

Source: SL 2000, ch 231.

57A-9-408. Restrictions on assignment of promissory notes, health care insurance receivables, and certain general intangibles ineffective.

(a) Except as otherwise provided in subsections (b) and (f), a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license, or franchise, and which term prohibits, restricts, or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or creation, attachment, or perfection of a security interest in, the promissory note, health-care-insurance receivable, or general intangible, is ineffective to the extent that the term:

(1)    Would impair the creation, attachment, or perfection of a security interest; or

(2)    Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.

(b) Subsection (a) applies to a security interest in a payment intangible or promissory note only if the security interest arises out of a sale of the payment intangible or promissory note, other than a sale pursuant to a disposition under § 57A-9-610 or an acceptance of collateral under § 57A-9-620.

(c) Except as otherwise provided in subsection (f), a rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, person obligated on a promissory note, or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health-care-insurance receivable, or general intangible, including a contract, permit, license, or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute, or regulation:

(1)    Would impair the creation, attachment, or perfection of a security interest; or

(2)    Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.

(d) To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or general intangible or a rule of law, statute, or regulation described in subsection (c) would be effective under law other than this article but is ineffective under subsection (a) or (c), the creation, attachment, or perfection of a security interest in the promissory note, health-care-insurance receivable, or general intangible:

(1)    Is not enforceable against the person obligated on the promissory note or the account debtor;

(2)    Does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;

(3)    Does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or accept payment or performance from the secured party;

(4)    Does not entitle the secured party to use or assign the debtor's rights under the promissory note, health-care-insurance receivable, or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health-care-insurance receivable, or general intangible;

(5)    Does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and

(6)    Does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable, or general intangible.

(e)    This section prevails over any inconsistent statute.

(f) This section does not apply to a security interest in an ownership interest in a general partnership, limited partnership, or limited liability company.

(g) In this section, "promissory note" includes a negotiable instrument that evidences chattel paper.

Source: SL 2000, ch 231; SL 2012, ch 238, § 9, eff. July 1, 2013; SL 2024, ch 198, § 77.

57A-9-409. Ineffective restrictions on assignment or creation of security interest in letter-of-credit right.

(a) A term in a letter of credit or a rule of law, statute, regulation, custom, or practice applicable to the letter of credit which prohibits, restricts, or requires the consent of an applicant, issuer, or nominated person to a beneficiary's assignment of or creation of a security interest in a letter-of-credit right is ineffective to the extent that the term or rule of law, statute, regulation, custom, or practice:

(1)    Would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or

(2)    Provides that the assignment or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the letter-of-credit right.

(b) To the extent that a term in a letter of credit is ineffective under subsection (a) but would be effective under law other than this chapter or a custom or practice applicable to the letter of credit, to the transfer of a right to draw or otherwise demand performance under the letter of credit, or to the assignment of a right to proceeds of the letter of credit, the creation, attachment, or perfection of a security interest in the letter-of-credit right:

(1)    Is not enforceable against the applicant, issuer, nominated person, or transferee beneficiary;

(2)    Imposes no duties or obligations on the applicant, issuer, nominated person, or transferee beneficiary; and

(3)    Does not require the applicant, issuer, nominated person, or transferee beneficiary to recognize the security interest, pay or render performance to the secured party, or accept payment or other performance from the secured party.

Source: SL 2000, ch 231.

57A-9-501. Office for filing financing statement for security interest or agricultural lien.

(a) Except as otherwise provided in subsection (b), if the local law of this state governs perfection of a security interest or agricultural lien, the office in which to file a financing statement to perfect the security interest or agricultural lien is:

(1)    The office designated for the filing or recording of a record of a mortgage on the related real property, if:

(A)    The collateral is as-extracted collateral or timber to be cut; or

(B)    The financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures; or

(2)    The Office of the Secretary of State, in all other cases, including a case in which the collateral is goods that are or are to become fixtures and the financing statement is not filed as a fixture filing.

(b) The office in which to file a financing statement to perfect a security interest in collateral, including fixtures, of a transmitting utility is the Office of the Secretary of State. The financing statement also constitutes a fixture filing as to the collateral indicated in the financing statement which is or is to become fixtures.

Source: SL 2000, ch 231.

57A-9-501.1. Validation of noncomplying statements.

All statements to continue, release, assign, amend or terminate any financing statements filed subsequent to December 31, 1979, and prior to July 1, 1980, notwithstanding any noncompliance with § 57A-9-401.1 as amended, are hereby cured, legalized and validated as fully as if such filings had been made in full compliance with § 57A-9-401.1.

Source: SL 2000, ch 231.

57A-9-501.2. Secured party access through state's computer to record liens on real property--Rules.

The secretary of state shall maintain a program granting a secured party access through the state's computer system to record liens on real property pursuant to § 57A-9-501. The secretary may promulgate rules, pursuant to chapter 1-26, concerning the procedure for providing a secured party access to, adequate security for, and confidentiality of any public records related to the secured party's liens listed on the state's computer system.

Source: SL 2002, ch 226, § 1; SL 2004, ch 294, § 1.

57A-9-502. Contents of financing statement--Record of mortgage as financing statement--Time of filing financing statement.

(a) Subject to subsection (b), a financing statement is sufficient only if it:

(1)    Provides the name of the debtor and either the social security number or the internal revenue service taxpayer identification number of the debtor;

(2)    Provides the name of the secured party or a representative of the secured party; and

(3)    Indicates the collateral covered by the financing statement.

(b) Except as otherwise provided in § 57A-9-501(b), to be sufficient, a financing statement that covers as-extracted collateral or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy subsection (a) and also:

(1)    Indicate that it covers this type of collateral;

(2)    Indicate that it is to be filed for record in the real property records;

(3)    Provide a description of the real property to which the collateral is related sufficient to give constructive notice of a mortgage under the law of this State if the description were contained in a record of the mortgage of the real property. A financing statement covering timber to be cut or covering minerals or the like (including oil and gas) or accounts subject to § 57A-9-301, or a financing statement filed as a fixture filing where the debtor is not a transmitting utility, must show that it covers this type of collateral, must recite that it is to be filed for record in the real estate records, and the financing statement must contain a description of the real estate sufficient if it were contained in a mortgage of the real estate to give constructive notice of the mortgage under the law of this state. If the debtor does not have an interest of record in the real estate, the financing statement must show the name of a record owner. No description of the real estate or the name of the record owner thereof is required for a fixture filing where the debtor is a transmitting utility; and

(4)    If the debtor does not have an interest of record in the real property, provide the name of a record owner.

(c) A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if:

(1)    The record indicates the goods or accounts that it covers;

(2)    The goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut;

(3)    The record satisfies the requirements for a financing statement in this section, but:

(A)    The record need not indicate that it is to be filed in the real property records; and

(B)    The record sufficiently provides the name of a debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom § 57A-9-503(a)(4) applies; and

(4)    The record is recorded.

(d) A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.

Source: SL 2000, ch 231; SL 2012, ch 238, § 10, eff. July 1, 2013.

57A-9-503. Name of debtor and secured party.

(a) A financing statement sufficiently provides the name of the debtor:

(1)    Except as otherwise provided in paragraph (3), if the debtor is a registered organization or the collateral is held in a trust that is a registered organization, only if the financing statement provides the name that is stated to be the registered organization's name on the public organic record most recently filed with or issued or enacted by the registered organization's jurisdiction of organization which purports to state, amend, or restate the registered organization's name;

(2)    Subject to subsection (f), if the collateral is being administered by the personal representative of a decedent, only if the financing statement provides, as the name of the debtor, the name of the decedent and, in a separate part of the financing statement, indicates that the collateral is being administered by a personal representative;

(3)    If the collateral is held in a trust that is not a registered organization, only if the financing statement:

(A)    Provides, as the name of the debtor:

(i)    If the organic record of the trust specifies a name for the trust, the name so specified; or

(ii)    If the organic record of the trust does not specify a name for the trust, the name of the settlor or testator; and

(B)    In a separate part of the financing statement:

(i)    If the name is provided in accordance with subparagraph (A)(i), indicates that the collateral is held in a trust; or

(ii)    If the name is provided in accordance with subparagraph (A)(ii), provides additional information sufficient to distinguish the trust from other trusts having one or more of the same settlors or the same testator and indicates that the collateral is held in a trust, unless the additional information so indicates;

(4)    Subject to subsection (g), if the debtor is an individual to whom this state has issued a driver license that has not expired, only if it provides the name of the individual which is indicated on the driver license;

(5)    If the debtor is an individual to whom paragraph (4) does not apply, only if it provides the individual name of the debtor or the surname and first personal name of the debtor; and

(6)    In other cases:

(A)    If the debtor has a name, only if provides the organizational name of the debtor; and

(B)    If the debtor does not have a name, only if it provides the names of the partners, members, associates, or other persons comprising the debtor in a manner that each name provided would be sufficient if the person named were the debtor.

(b) A financing statement that provides the name of the debtor in accordance with subsection (a) is not rendered ineffective by the absence of:

(1)    A trade name or other name of the debtor; or

(2)    Unless required under subsection (a)(6)(B), names of partners, members, associates, or other persons comprising the debtor.

(c) A financing statement that provides only the debtor's trade name does not sufficiently provide the name of the debtor.

(d) Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.

(e) A financing statement may provide the name of more than one debtor and the name of more than one secured party.

(f) The name of the decedent indicated on the order appointing the personal representative of the decedent issued by the court having jurisdiction over the collateral is sufficient as the "name of the decedent" under subsection (a)(2).

(g) If this state has issued to an individual more than one driver license of a kind described in subsection (a)(4), the one that was issued most recently is the one to which subsection (a)(4) refers.

(h) In this section, the "name of the settlor or testator" means:

(1)    If the settlor is a registered organization, the name of the registered organization indicated on the public organic record filed with or enacted by the registered organization; or

(2)    In other cases, the name of the settlor or testator indicated in the trust's organic record.

Source: SL 2000, ch 231; SL 2012, ch 238, § 11, eff. July 1, 2013.

57A-9-504. Sufficiency of description of collateral.

A financing statement sufficiently indicates the collateral that it covers if the financing statement provides:

(1)    A description of the collateral pursuant to § 57A-9-108; or

(2)    An indication that the financing statement covers all assets or all personal property.

Source: SL 2000, ch 231.

57A-9-505. Filing by bailor of goods, licensor, or buyer of payment intangible or promissory note.

(a) A consignor, lessor, or other bailor of goods, a licensor, or a buyer of a payment intangible or promissory note may file a financing statement, or may comply with a statute or treaty described in § 57A-9-311(a), using the terms "consignor", "consignee", "lessor", "lessee", "bailor", "bailee", "licensor", "licensee", "owner", "registered owner", "buyer", "seller", or words of similar import, instead of the terms "secured party" and "debtor".

(b) This part applies to the filing of a financing statement under subsection (a) and, as appropriate, to compliance that is equivalent to filing a financing statement under § 57A-9-311(b), but the filing or compliance is not of itself a factor in determining whether the collateral secures an obligation. If it is determined for another reason that the collateral secures an obligation, a security interest held by the consignor, lessor, bailor, licensor, owner, or buyer which attaches to the collateral is perfected by the filing or compliance.

Source: SL 2000, ch 231.

57A-9-506. Substantial compliance with requirements.

(a) A financing statement substantially satisfying the requirements of this part is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading.

(b) Except as otherwise provided in subsection (c), a financing statement that fails sufficiently to provide the name of the debtor in accordance with § 57A-9-503(a) is seriously misleading.

(c) If a search of the records of the filing office under the debtor's correct name, using the filing office's standard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with § 57A-9-503(a), the name provided does not make the financing statement seriously misleading.

(d) For purposes of § 57A-9-508(b), the "debtor's correct name" in subsection (c) means the correct name of the new debtor.

Source: SL 2000, ch 231.

57A-9-507. Continuing effectiveness of filed financing statement.

(a) A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed, or otherwise disposed of and in which a security interest or agricultural lien continues, even if the secured party knows of or consents to the disposition.

(b) Except as otherwise provided in subsection (c) and § 57A-9-508, a financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under § 57A-9-506.

(c) If the name that a filed financing statement provides for a debtor becomes insufficient as the name of the debtor under § 57A-9-503(a) so that the financing statement becomes seriously misleading under § 57A-9-506:

(1)    The financing statement is effective to perfect a security interest in collateral acquired by the debtor before, or within four months after, the filed financing statement becomes seriously misleading; and

(2)    The financing statement is not effective to perfect a security interest in collateral acquired by the debtor more than four months after the filed financing statement becomes seriously misleading, unless an amendment to the financing statement which renders the financing statement not seriously misleading is filed within four months after that event.

Source: SL 2000, ch 231; SL 2012, ch 238, § 12, eff. July 1, 2013.

57A-9-508. Effect of new debtor's rights in collateral.

(a) Except as otherwise provided in this section, a filed financing statement naming an original debtor is effective to perfect a security interest in collateral in which a new debtor has or acquires rights to the extent that the financing statement would have been effective had the original debtor acquired rights in the collateral.

(b) If the difference between the name of the original debtor and that of the new debtor causes a filed financing statement that is effective under subsection (a) to be seriously misleading under § 57A-9-506:

(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 § 57A-9-203(d); and

(2)    The financing statement is not effective to perfect a security interest in collateral acquired by the new debtor more than four months after the new debtor becomes bound under § 57A-9-203(d) unless an initial financing statement providing the name of the new debtor is filed before the expiration of that time.

(c) This section does not apply to collateral as to which a filed financing statement remains effective against the new debtor under § 57A-9-507(a).

Source: SL 2000, ch 231.

57A-9-509. Persons entitled to file a record.

(a) A person may file an initial financing statement, amendment that adds collateral covered by a financing statement, or amendment that adds a debtor to a financing statement only if:

(1)    The debtor authorizes the filing in a signed record or pursuant to subsection (b) or (c); or

(2)    The person holds an agricultural lien that has become effective at the time of filing and the financing statement covers only collateral in which the person holds an agricultural lien.

(b) By signing or becoming bound as debtor by a security agreement, a debtor or new debtor authorizes the filing of an initial financing statement, and an amendment, covering:

(1)    The collateral described in the security agreement; and

(2)    Property that becomes collateral under § 57A-9-315(a)(2), whether or not the security agreement expressly covers proceeds.

(c) By acquiring collateral in which a security interest or agricultural lien continues under § 57A-9-315(a)(1), a debtor authorizes the filing of an initial financing statement, and an amendment, covering the collateral and property that becomes collateral under § 57A-9-315(a)(2).

(d) A person may file an amendment other than an amendment that adds collateral covered by a financing statement or an amendment that adds a debtor to a financing statement only if:

(1)    The secured party of record authorizes the filing; or

(2)    The amendment is a termination statement for a financing statement as to which the secured party of record has failed to file or send a termination statement as required by § 57A-9-513(a) or (c), the debtor authorizes the filing, and the termination statement indicates that the debtor authorized it to be filed.

(e) If there is more than one secured party of record for a financing statement, each secured party of record may authorize the filing of an amendment under subsection (d).

Source: SL 2000, ch 231; SL 2024, ch 198, § 78.

57A-9-510. Effectiveness of filed record.

(a) A filed record is effective only to the extent that it was filed by a person that may file it under § 57A-9-509.

(b) A record authorized by one secured party of record does not affect the financing statement with respect to another secured party of record.

(c) A continuation statement that is not filed within the period prescribed by § 57A-9-515(d) is ineffective.

Source: SL 2000, ch 231.

57A-9-511. Person constituting secured party of record.

(a) A secured party of record with respect to a financing statement is a person whose name is provided as the name of the secured party or a representative of the secured party in an initial financing statement that has been filed. If an initial financing statement is filed under 57A-9-514(a), the assignee named in the initial financing statement is the secured party of record with respect to the financing statement.

(b) If an amendment of a financing statement which provides the name of a person as a secured party or a representative of a secured party is filed, the person named in the amendment is a secured party of record. If an amendment is filed under § 57A-9-514(b), the assignee named in the amendment is a secured party of record.

(c) A person remains a secured party of record until the filing of an amendment of the financing statement which deletes the person.

Source: SL 2000, ch 231.

57A-9-512. Procedure for amending financing statement--Effectiveness.

(a) Subject to § 57A-9-509, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or, subject to subsection (e), otherwise amend the information provided in, a financing statement by filing an amendment that:

(1)    Identifies, by its file number, the initial financing statement to which the amendment relates and either the social security number or internal revenue service taxpayer identification number of the debtor; and

(2)    If the amendment relates to an initial financing statement filed or recorded in a filing office described in § 57A-9-501(a)(1), provides the date and time that the initial financing statement was filed or recorded and the information specified in § 57A-9-502(b).

(b) Except as otherwise provided in § 57A-9-515, the filing of an amendment does not extend the period of effectiveness of the financing statement.

(c) A financing statement that is amended by an amendment that adds collateral is effective as to the added collateral only from the date of the filing of the amendment.

(d) A financing statement that is amended by an amendment that adds a debtor is effective as to the added debtor only from the date of filing of the amendment.

(e) An amendment is ineffective to the extent it:

(1)    Purports to delete all debtors and fails to provide the name of a debtor to be covered by the financing statement; or

(2)    Purports to delete all secured parties of record and fails to provide the name of a new secured party of record.

Source: SL 2000, ch 231.

57A-9-513. Termination statement.

(a) A secured party shall cause the secured party of record for a financing statement to file a termination statement for the financing statement if the financing statement covers consumer goods and:

(1)    There is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or

(2)    The debtor did not authorize the filing of the initial financing statement.

(b) To comply with subsection (a), a secured party shall cause the secured party of record to file the termination statement:

(1)    Within one month after there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or

(2)    If earlier, within twenty days after the secured party receives a signed demand from a debtor.

(c) In cases not governed by subsection (a), within twenty days after a secured party receives a signed demand from a debtor, the secured party shall cause the secured party of record for a financing statement to send to the debtor a termination statement for the financing statement or file the termination statement in the filing office if:

(1)    Except in the case of a financing statement covering accounts or chattel paper that has been sold or goods that are the subject of a consignment, there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value;

(2)    The financing statement covers accounts or chattel paper that has been sold but as to which the account debtor or other person obligated has discharged its obligation;

(3)    The financing statement covers goods that were the subject of a consignment to the debtor but are not in the debtor's possession; or

(4)    The debtor did not authorize the filing of the initial financing statement.

(d) Except as otherwise provided in § 57A-9-510, upon the filing of a termination statement with the filing office, the financing statement to which the termination statement relates ceases to be effective. Except as otherwise provided in § 57A-9-510, for purposes of §§ 57A-9-519(g), 57A-9-522(a), and 57A-9-523(c), the filing with the filing office of a termination statement relating to a financing statement that indicates that the debtor is a transmitting utility also causes the effectiveness of the financing statement to lapse.

Source: SL 2000, ch 231; SL 2024, ch 198, § 79.

57A-9-514. Assignment of secured party's power to authorize amendment--Assignment of record of security's interest in fixture.

(a) Except as otherwise provided in subsection (c), an initial financing statement may reflect an assignment of all of the secured party's power to authorize an amendment to the financing statement by providing the name and mailing address of the assignee as the name and address of the secured party.

(b) Except as otherwise provided in subsection (c), a secured party of record may assign of record all or part of its power to authorize an amendment to a financing statement by filing in the filing office an amendment of the financing statement which:

(1)    Identifies, by its file number, the initial financing statement to which it relates;

(2)    Provides the name of the assignor; and

(3)    Provides the name and mailing address of the assignee.

(c) An assignment of record of a security interest in a fixture covered by a record of a mortgage which is effective as a financing statement filed as a fixture filing under § 57A-9-502(c) may be made only by an assignment of record of the mortgage in the manner provided by law of this state other than the Uniform Commercial Code.

Source: SL 2000, ch 231.

57A-9-515. Effective period for filed financing statement--Effect of lapse.

(a) Except as otherwise provided in subsections (b), (e), (f), and (g), a filed financing statement is effective for a period of five years after the date of filing. Financing statements filed before July 1, 1997, are effective for a period of five years from the date of filing and thereafter for a period of sixty days.

The expiration date established by a financing statement filed prior to July 1, 1997, whether or not continued by a continuation statement shall remain in full force and effect and is not diminished by any subsequent amendments to this chapter.

(b) Except as otherwise provided in subsections (e), (f), and (g), an initial financing statement filed in connection with a manufactured-home transaction is effective for a period of thirty years after the date of filing if it indicates that it is filed in connection with a manufactured-home transaction.

(c) The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the lapse a continuation statement is filed pursuant to subsection (d). Upon lapse, a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes unperfected, unless the security interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value.

(d) A continuation statement may be filed only within six months before the expiration of the five-year period specified in subsection (a) or the thirty-year period specified in subsection (b), whichever is applicable.

However, for financing statements filed before July 1, 1997, a continuation statement may be filed within six months before and sixty days after the expiration of the five-year period.

(e) Except as otherwise provided in § 57A-9-510, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of five years and, for initial financing statements filed before July 1, 1997, the effectiveness of the initial financing statement continues for a period of five years and sixty days, commencing on the day on which the financing statement would have become ineffective in the absence of the filing. Upon the expiration of the five-year period, the financing statement lapses in the same manner as provided in subsection (c), unless, before the lapse, another continuation statement is filed pursuant to subsection (d). Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.

(f) If a debtor is a transmitting utility and a filed initial financing statement so indicates, the financing statement is effective until a termination statement is filed.

(g) A record of a mortgage that is effective as a financing statement filed as a fixture filing under § 57A-9-502(c) remains effective as a financing statement filed as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property.

Source: SL 2000, ch 231; SL 2001, ch 261, § 3; SL 2012, ch 238, § 13, eff. July 1, 2013.

57A-9-516. What constitutes filing--Refusal to accept for filing--Effect.

(a) Except as otherwise provided in subsection (b), communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing.

(b) Filing does not occur with respect to a record that a filing office refuses to accept because:

(1)    The record is not communicated by a method or medium of communication authorized by the filing office;

(2)    An amount equal to or greater than the applicable filing fee is not tendered;

(3)    The filing office is unable to index the record because:

(A)    In the case of an initial financing statement, the record does not provide a name for the debtor;

(B)    In the case of an amendment or information statement, the record:

(i)    Does not identify the initial financing statement as required by § 57A-9-512 or 57A-9-518, as applicable; or

(ii)    Identifies an initial financing statement whose effectiveness has lapsed under § 57A-9-515;

(C)    In the case of an initial financing statement that provides the name of a debtor identified as an individual or an amendment that provides a name of a debtor identified as an individual which was not previously provided in the financing statement to which the record relates, the record does not identify the debtor's surname; or

(D)    In the case of a record filed or recorded in the filing office described in § 57A-9-501(a)(1), the record does not provide a sufficient description of the real property to which it relates;

(4)    In the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record;

(5)    In the case of an initial financing statement or an amendment that provides a name of a debtor which was not previously provided in the financing statement to which the amendment relates, the record does not:

(A)    Provide a mailing address for the debtor; or

(B)    Indicate whether the name provided as the name of the debtor is the name of an individual or an organization;

(6)    In the case of an assignment reflected in an initial financing statement under § 57A-9-514(a) or an amendment filed under § 57A-9-514(b), the record does not provide a name and mailing address for the assignee; or

(7)    In the case of a continuation statement, the record is not filed within the six-month period prescribed by § 57A-9-515(d).

(c) For purposes of subsection (b):

(1)    A record does not provide information if the filing office is unable to read or decipher the information; and

(2)    A record that does not indicate that it is an amendment or identify an initial financing statement to which it relates, as required by § 57A-9-512, 57A-9-514, or 57A-9-518, is an initial financing statement.

(d) If a person presents a financing statement to the secretary of state for filing or recording, the secretary of state may refuse to accept or reject the financing statement for filing or recording if:

(1)    The financing statement is not required or authorized to be filed or recorded with the secretary of state; or

(2)    The secretary of state has reasonable cause to believe the financing statement is materially false or fraudulent.

(e) A financing statement that the secretary of state may refuse to accept or reject includes the following:

(1)    Any financing statement that has the same name listed as both the debtor and the secured party;

(2)    Any financing statement that identifies an individual debtor as a transmitting utility;

(3)    Any financing statement that is determined to be intended for an improper purpose, such as hindering, harassing, or wrongfully interfering with another person or entity; or

(4)    Any financing statement that is filed:

(A)    Without the consent or participation of the:

(i)    Obligor named in the financing statement;

(ii)    The person named in the financing statement as debtor; and

(iii)    The owner of collateral described or indicated in the financing statement; or

(B)    By consent of an agent, a fiduciary, or another representative of the secured party of record without the consent of the secured party; or

(5)    Any financing statement that is forged.

(f) The secretary of state does not have a duty to inspect, evaluate, or investigate a financing statement that is presented for filing or recording.

(g) A record that is communicated to the filing office with tender of the filing fee, but which the filing office refuses to accept for a reason other than one set forth in subsection (b), is effective as a filed record except as against a purchaser of the collateral which gives value in reasonable reliance upon the absence of the record from the files.

Source: SL 2000, ch 231; SL 2012, ch 238, § 14, eff. July 1, 2013; SL 2018, ch 276, § 1.

57A-9-517. Effect of incorrect indexing of record.

The failure of the filing office to index a record correctly does not affect the effectiveness of the filed record.

Source: SL 2000, ch 231.

57A-9-518. Information statement regarding record.

(a) A person may file in the filing office an information statement with respect to a record indexed there under the person's name if the person believes that the record is inaccurate or was wrongfully filed.

(b) An information statement under subsection (a) must:

(1)    Identify the record to which it relates by:

(A)    The file number assigned to the initial financing statement to which the record relates; and

(B)    If the information statement relates to a record filed or recorded in a filing office described in § 57A-9-501(a)(1), the date and time that the initial financing statement was filed or recorded and the information specified in § 57A-9-502(b);

(2)    Indicate that it is an information statement; and

(3)    Provide the basis for the person's belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person's belief that the record was wrongfully filed.

(c) A person may file in the filing office an information statement with respect to a record filed there if the person is a secured party of record with respect to the financing statement to which the record relates and believes that the person that filed the record was not entitled to do so under § 57A-9-509(d).

(d) An information statement under subsection (c) must:

(1)    Identify the record to which it relates by:

(A)    The file number assigned to the initial financing statement to which the record relates; and

(B)    If the statement relates to a record filed or recorded in a filing office described in § 57A-9-501(a)(1), the date and time that the initial financing statement was filed or recorded and the information specified in § 57A-9-502(b);

(2)    Indicate that it is an information statement; and

(3)    Provide the basis for the person's belief that the person that filed the record was not entitled to do so under § 57A-9-509(d).

(e) The filing of an information statement does not affect the effectiveness of an initial financing statement or other filed record.

Source: SL 2000, ch 231; SL 2012, ch 238, § 15, eff. July 1, 2013.

57A-9-519. Duties of filing office in dealing with records.

(a) For each record filed in a filing office, the filing office shall:

(1)    Assign a unique number to the filed record;

(2)    Create a record that bears the number assigned to the filed record and the date and time of filing;

(3)    Maintain the filed record for public inspection; and

(4)    Index the filed record in accordance with subsections (c), (d), and (e).

(b) Deleted by SL 2002, ch 227, § 1.

(c) Except as otherwise provided in subsections (d) and (e), the filing office shall:

(1)    Index an initial financing statement according to the name of the debtor and index all filed records relating to the initial financing statement in a manner that associates with one another an initial financing statement and all filed records relating to the initial financing statement; and

(2)    Index a record that provides a name of a debtor which was not previously provided in the financing statement to which the record relates also according to the name that was not previously provided.

(d) If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, it must be filed for record and the filing office shall index it:

(1)    Under the names of the debtor and of each owner of record shown on the financing statement as if they were the mortgagors under a mortgage of the real property described; and

(2)    To the extent that the law of this state provides for indexing of records of mortgages under the name of the mortgagee, under the name of the secured party as if the secured party were the mortgagee thereunder, or, if indexing is by description, as if the financing statement were a record of a mortgage of the real property described.

(e) If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, the filing office shall index an assignment filed under 57A-9-514(a) or an amendment filed under § 57A-9-514(b):

(1)    Under the name of the assignor as grantor; and

(2)    To the extent that the law of this state provides for indexing a record of the assignment of a mortgage under the name of the assignee, under the name of the assignee.

(f) The filing office shall maintain a capability:

(1)    To retrieve a record by the name of the debtor and:

(A)    If the filing office is described in § 57A-9-501(a)(1), by the file number assigned to the initial financing statement to which the record relates and the date and time that the record was filed or recorded; or

(B)    If the filing office is described in § 57A-9-501(a)(2), by the file number assigned to the initial financing statement to which the record relates; and

(2)    To associate and retrieve with one another an initial financing statement and each filed record relating to the initial financing statement.

(g) The filing office may not remove a debtor's name from the index until one year after the effectiveness of a financing statement naming the debtor lapses under § 57A-9-515 with respect to all secured parties of record.

(h) The filing office shall perform the acts required by subsections (a) through (e) at the time and in the manner prescribed by filing-office rule, but not later than two business days after the filing office receives the record in question.

(i) Subsection (h) does not apply to a filing office described in 57A-9-501(a)(1).

Source: SL 2000, ch 231; SL 2002, ch 227, § 1.

57A-9-520. Refusal by filing office to accept record.

(a) A filing office shall refuse to accept a record for filing for a reason set forth in § 57A-9-516(b) and may refuse to accept a record for filing only for a reason set forth in § 57A-9-516(b).

(b) If a filing office refuses to accept a record for filing, it shall communicate to the person that presented the record the fact of and reason for the refusal and the date and time the record would have been filed had the filing office accepted it. The communication must be made at the time and in the manner prescribed by filing-office rule but, in the case of a filing office described in § 57A-9-501(a)(2), in no event more than two business days after the filing office receives the record.

(c) A filed financing statement satisfying § 57A-9-502(a) and (b) is effective, even if the filing office is required to refuse to accept it for filing under subsection (a). However, § 57A-9-338 applies to a filed financing statement providing information described in § 57A-9-516(b)(5) which is incorrect at the time the financing statement is filed.

(d) If a record communicated to a filing office provides information that relates to more than one debtor, this part applies as to each debtor separately.

Source: SL 2000, ch 231.

57A-9-521. Forms for financing statement, amendment to statement, and addendum for either.

(a) A filing office that accepts written records may not refuse to accept a written initial financing statement in the following form and format except for a reason set forth in § 57A-9-516(b).

(b) A filing office that accepts written records may not refuse to accept a written record in the following form and format except for a reason set forth in § 57A-9-516(b).

Source: SL 2000, ch 231; SL 2012, ch 238, § 16, eff. July 1, 2013.

57A-9-522. Required retention of information from financing statement--Destruction of written record.

(a) The filing office shall maintain a record of the information provided in a filed financing statement for at least one year after the effectiveness of the financing statement has lapsed under § 57A-9-515 with respect to all secured parties of record. The record must be retrievable by using the name of the debtor and:

(1)    If the record was filed or recorded in the filing office described in § 57A-9-501(a)(1), by using the file number assigned to the initial financing statement to which the record relates and the date and time that the record was filed or recorded; or

(2)    If the record was filed in the filing office described in § 57A-9-501(a)(2), by using the file number assigned to the initial financing statement to which the record relates.

(b) Except to the extent that a statute governing disposition of public records provides otherwise, the filing office immediately may destroy any written record evidencing a financing statement. However, if the filing office destroys a written record, it shall maintain another record of the financing statement which complies with subsection (a).

Source: SL 2000, ch 231.

57A-9-523. Acknowledgment of filing--Information to be communicated from records on request--Sale or licensing of records.

(a) If a person that files a written record requests an acknowledgment of the filing, the filing office shall send to the person an image of the record showing the number assigned to the record pursuant to § 57A-9-519(a)(1) and the date and time of the filing of the record. However, if the person furnishes a copy of the record to the filing office, the filing office may instead:

(1)    Note upon the copy the number assigned to the record pursuant to § 57A-9-519(a)(1) and the date and time of the filing of the record; and

(2)    Send the copy to the person.

(b) If a person files a record other than a written record, the filing office shall communicate to the person an acknowledgment that provides:

(1)    The information in the record;

(2)    The number assigned to the record pursuant to § 57A-9-519(a)(1); and

(3)    The date and time of the filing of the record.

(c) The filing office shall communicate or otherwise make available in a record the following information to any person that requests it:

(1)    Whether there is on file on a date and time specified by the filing office, but not a date earlier than three business days before the filing office receives the request, any financing statement that:

(A)    Designates a particular debtor or, if the request so states, designates a particular debtor at the address specified in the request;

(B)    Has not lapsed under § 57A-9-515 with respect to all secured parties of record; and

(C)    If the request so states, has lapsed under § 57A-9-515 and a record of which is maintained by the filing office under § 57A-9-522(a);

(2)    The date and time of filing of each financing statement; and

(3)    The information provided in each financing statement. However, if the financing statement contains a social security or employer identification number which has not been supplied by the person requesting the information, such number shall be redacted prior to providing the information. In the case of financing statements recorded in the office of the register of deeds, the requirement for redaction of social security or employer identification numbers only applies to financing statements recorded after July 1, 2009.

(d) In complying with its duty under subsection (c), the filing office may communicate information in any medium. However, if requested, the filing office shall communicate information by issuing a record that can be admitted into evidence in the courts of this state without extrinsic evidence of its authenticity.

A computer printout from the centralized computer system established by the secretary of state constitutes the certificate of the secretary of state as to whether there is on file, on the date and hour stated thereon, a financing statement covering the following collateral: farm products or accounts, or livestock, or general intangibles arising from or relating to the sale of farm products by a farmer, or crops growing or to be grown, or equipment used in farming operations.

The secretary of state shall, upon a telephone request, furnish to any person, company, or corporation, information as to whether a financing statement describing farm collateral has been filed in the Office of the Secretary of State and, if such financing statement has been filed, the secretary of state shall also furnish the name and business address of the secured creditor. However, the secretary of state need not answer telephone inquiries in writing nor send written confirmation from a telephone request. The secretary of state is not responsible for accuracy and completeness of the information furnished verbally in response to a telephone request.

(e) The filing office shall perform the acts required by subsections (a) through (d) at the time and in the manner prescribed by filing-office rule, but not later than two business days after the filing office receives the request.

Source: SL 2000, ch 231; SL 2009, ch 3, § 2; SL 2009, ch 255, § 1.

57A-9-524. Excuses for filing office failure to meet time limits.

Delay by the filing office beyond a time limit prescribed by this part is excused if:

(1)    The delay is caused by interruption of communication or computer facilities, war, emergency conditions, failure of equipment, or other circumstances beyond control of the filing office; and

(2)    The filing office exercises reasonable diligence under the circumstances.

Source: SL 2000, ch 231.

57A-9-525. Fees for filing and indexing records.

(a) Except as otherwise provided in subsection (e), the fee for filing and indexing a record under this part, other than an initial financing statement of the kind described in subsection (b), is the amount specified in subsection (c), if applicable, plus:

(1)    Twenty-five dollars if the record is communicated in writing and consists of one page, and five dollars for additional pages. One dollar of this fee shall be deposited into the financing statement and annual report filing fee fund;

(2)    Twenty dollars if the record is communicated by internet. One dollar of this fee shall be deposited into the financing statement and annual report filing fee fund; and

(3)    Twenty-five dollars if the record is communicated by another medium authorized by filing-office rule.

(b) The secretary of state may request a fee for on-line services for UCC data images available on a subscription basis. The office shall deposit any revenue from this fee into the financing statement and annual report filing fee fund.

(c) Except as otherwise provided in subsection (e), the fee for filing, whether communicated in writing, electronically, or another medium authorized by filing-office rule, and indexing an initial financing statement of the following kind is the amount specified in subsection (c), if applicable, plus:

(1)    Forty dollars if the financing statement indicates that it is filed in connection with a public-finance transaction;

(2)    Forty dollars if the financing statement indicates that it is filed in connection with a manufactured-home transaction.

(d) Except as otherwise provided in subsection (e), if a record is communicated in writing or electronically, the fee for each name more than one required to be indexed is three dollars.

(e) The fee for responding to a request for information from the filing office, including for issuing a certificate showing whether there is on file any financing statement naming a particular debtor, is:

(1)    Twenty dollars if the request is communicated in writing; and

(2)    Ten dollars if the request is communicated by internet authorized by filing-office rule.

Upon request the filing officer shall furnish a copy of any filed financing statement or statement of assignment for a uniform fee of one dollar per page.

(f) This section does not require a fee with respect to a record of a mortgage which is effective as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut under § 57A-9-502(c). However, the recording and satisfaction fees that otherwise would be applicable to the record of the mortgage apply.

Source: SL 2000, ch 231; SL 2001, ch 262, § 1; SL 2003, ch 8, § 29; SL 2009, ch 4, § 24; SL 2009, ch 256, § 2; SL 2016, ch 2, § 12.

57A-9-525.1. Effect of filing with register of deeds prior to July 1, 1986--Continuation or amendment thereof.

For the purposes of former § 57A-9-401, a filing made in the county office of register of deeds prior to July 1, 1986, which has not lapsed prior to July 1, 1986, shall remain effective for the period provided by this title. Any continuation of or amendment to such filing shall be made with the secretary of state. Such central filing shall be accompanied by a certified copy of the original filed financing statement.

Source: SL 2000, ch 231.

57A-9-525.2. Central filing system--Promulgation of regulations.

The secretary of state may promulgate all necessary regulations under the provisions of chapter 1-26 to implement a central filing system for filing financing statements.

Source: SL 2000, ch 231.

57A-9-525.3. Central agricultural security interest filing system--Adoption of rules.

The secretary of state may adopt rules concerning the operation of the central agricultural security interest computer filing system, prescribing such matters as format for data and the type of information to be recorded from the financing statement.

Source: SL 2000, ch 231.

57A-9-525.4. Fee for crop or livestock effective finance statement microfiche master list.

The annual registration fee for the crop or livestock effective finance statement microfiche master list is one hundred twenty dollars.

Source: SL 2003, ch 8, § 30.

57A-9-526. Rules and practices for filing offices.

(a) The secretary of state shall adopt rules to implement this chapter. The filing-office rules must be:

(1)    Consistent with this chapter; and

(2)    Adopted and published in accordance with chapter 1-26.

(b) To keep the filing-office rules and practices of the filing office in harmony with the rules and practices of filing offices in other jurisdictions that enact substantially this part, and to keep the technology used by the filing office compatible with the technology used by filing offices in other jurisdictions that enact substantially this part, the secretary of state's office, so far as is consistent with the purposes, policies, and provisions of this chapter, in adopting, amending, and repealing filing-office rules, shall:

(1)    Consult with filing offices in other jurisdictions that enact substantially this part; and

(2)    Consult the most recent version of the Model Rules promulgated by the International Association of Corporate Administrators or any successor organization; and

(3)    Take into consideration the rules and practices of, and the technology used by, filing offices in other jurisdictions that enact substantially this part.

Source: SL 2000, ch 231.

57A-9-527. Financing statement and annual report filing fee fund.

There is hereby created, within the state treasury, the financing statement and annual report filing fee fund, which is continuously appropriated, to provide funds for the operation of the uniform commercial code program and business services electronic filing and retrieval system within the Office of the Secretary of State.

Source: SL 2001, ch 262, § 2; SL 2009, ch 256, § 1.

57A-9-528. Fees deposited in filing fee fund.

For each effective financing statement filed under this chapter, three dollars of the fee collected pursuant to § 57A-9-525, and the computer search fee assessed pursuant to § 57A-9-525, shall be deposited in the financing statement and annual report filing fee fund. For each annual report filed pursuant to § 59-11-24 in fiscal years 2010 and 2011, three dollars of the fee collected shall be deposited in the financing statement and annual report filing fee fund. For each annual report filed pursuant to § 59-11-24 in fiscal year 2012 and each year thereafter, one dollar of the annual report fee shall be deposited in the financing statement and annual report filing fee fund. For each amendment of an annual report filed pursuant to § 59-11-24 in fiscal year 2016 and each year after, the fee for the amendment shall be deposited in the financing statement and annual report filing fee fund. For each application for a certificate of designation filed under § 47-34A-707, five dollars of the fee collected shall be deposited in the financing statement and annual report filing fee fund.

Source: SL 2001, ch 262, § 3; SL 2009, ch 256, § 3; SL 2015, ch 258, § 3, eff. Jan. 1, 2016; SL 2020, ch 200, § 12, eff. Nov. 15, 2020.

57A-9-529. Disposition of balance of funds.

At the end of each fiscal year, any funds in the financing statement and annual report filing fee fund, not otherwise appropriated, in excess of twenty-five thousand dollars, shall revert to the general fund.

Source: SL 2001, ch 262, § 4; SL 2009, ch 256, § 4.

57A-9-530. Combined financing statement for farm products.

If a filed financing or continuation statement covers farm products or accounts, or livestock, or general intangibles arising from or relating to the sale of farm products by a farmer, or crops growing or to be grown, the secured party may file a standard form to be prescribed by the secretary of state, which may be a combined effective financing statement and a uniform commercial code financing statement.

Source: SL 2001, ch 262, § 5.

57A-9-601. Rights after default--Judicial enforcement--Consignor or buyer of accounts, chattel paper, payment intangibles, or promissory notes.

(a) After default, a secured party has the rights provided in this part and, except as otherwise provided in § 57A-9-602, those provided by agreement of the parties. A secured party:

(1)    May reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, or agricultural lien by any available judicial procedure; and

(2)    If the collateral is documents, may proceed either as to the documents or as to the goods they cover.

(b) A secured party in possession of collateral or control of collateral under § 57A-7-106, 57A-9-104, 57A-9-105, 57A-9-105.1, 57A-9-106, 57A-9-107, or 57A-9-107.1 has the rights and duties provided in § 57A-9-207.

(c) The rights under subsections (a) and (b) are cumulative and may be exercised simultaneously.

(d) Except as otherwise provided in subsection (g) and § 57A-9-605, after default, a debtor and an obligor have the rights provided in this part and by agreement of the parties.

(e) If a secured party has reduced its claim to judgment, the lien of any levy that may be made upon the collateral by virtue of an execution based upon the judgment relates back to the earliest of:

(1)    The date of perfection of the security interest or agricultural lien in the collateral;

(2)    The date of filing a financing statement covering the collateral; or

(3)    Any date specified in a statute under which the agricultural lien was created.

(f) A sale pursuant to an execution is a foreclosure of the security interest or agricultural lien by judicial procedure within the meaning of this section. A secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this chapter.

(g) Except as otherwise provided in § 57A-9-607(c), this part imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.

Source: SL 2000, ch 231; SL 2009, ch 254, § 836; SL 2024, ch 198, § 80.

57A-9-602. Waiver or variance of rules by debtor or obligor.

Except as otherwise provided in § 57A-9-624, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following listed sections:

(1)    Section 57A-9-207(b)(4)(C), which deals with use and operation of the collateral by the secured party;

(2)    Section 57A-9-210, which deals with requests for an accounting and requests concerning a list of collateral and statement of account;

(3)    Section 57A-9-607(c), which deals with collection and enforcement of collateral;

(4)    Sections 57A-9-608(a) and 57A-9-615(c) to the extent that they deal with application or payment of noncash proceeds of collection, enforcement, or disposition;

(5)    Sections 57A-9-608(a) and 57A-9-615(d) to the extent that they require accounting for or payment of surplus proceeds of collateral;

(6)    Section 57A-9-609 to the extent that it imposes upon a secured party that takes possession of collateral without judicial process the duty to do so without breach of the peace;

(7)    Sections 57A-9-610(b), 57A-9-611, 57A-9-613, and 57A-9-614, which deal with disposition of collateral;

(8)    Section 57A-9-615(f), which deals with calculation of a deficiency or surplus when a disposition is made to the secured party, a person related to the secured party, or a secondary obligor;

(9)    Section 57A-9-616, which deals with explanation of the calculation of a surplus or deficiency;

(10)    Sections 57A-9-620, 57A-9-621, and 57A-9-622, which deal with acceptance of collateral in satisfaction of obligation;

(11)    Section 57A-9-623, which deals with redemption of collateral;

(12)    Section 57A-9-624, which deals with permissible waivers; and

(13)    Sections 57A-9-625 and 57A-9-626, which deal with the secured party's liability for failure to comply with this chapter.

Source: SL 2000, ch 231.

57A-9-603. Agreement on standards for fulfilling rights and duties.

(a) The parties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of a secured party under a rule stated in § 57A-9-602 if the standards are not manifestly unreasonable.

(b) Subsection (a) does not apply to the duty under § 57A-9-609 to refrain from breaching the peace.

Source: SL 2000, ch 231.

57A-9-604. Procedure if obligation secured by security interest in personal property or fixtures is also secured by interest in real property.

(a) If a security agreement covers both personal and real property, a secured party may proceed:

(1)    Under this part as to the personal property without prejudicing any rights with respect to the real property; or

(2)    As to both the personal property and the real property in accordance with the rights with respect to the real property, in which case the other provisions of this part do not apply.

(b) Subject to subsection (c), if a security agreement covers goods that are or become fixtures, a secured party may proceed:

(1)    Under this part; or

(2)    In accordance with the rights with respect to real property, in which case the other provisions of this part do not apply.

(c) Subject to the other provisions of this part, if a secured party holding a security interest in fixtures has priority over all owners and encumbrancers of the real property, the secured party, after default, may remove the collateral from the real property.

(d) A secured party that removes collateral shall promptly reimburse any encumbrancer or owner of the real property, other than the debtor, for the cost of repair of any physical injury caused by the removal. The secured party need not reimburse the encumbrancer or owner for any diminution in value of the real property caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.

Source: SL 2000, ch 231.

57A-9-605. Unknown debtor or secondary obligor.

(a) Except as provided in subsection (b), a secured party does not owe a duty based on its status as secured party:

(1)    To a person that is a debtor or obligor, unless the secured party knows:

(A)    That the person is a debtor or obligor;

(B)    The identity of the person; and

(C)    How to communicate with the person; or

(2)    To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:

(A)    That the person is a debtor; and

(B)    The identity of the person.

(b) A secured party owes a duty based on its status as a secured party to a person if, at the time the secured party obtains control of collateral that is a controllable account, controllable electronic record, or controllable payment intangible or at the time the security interest attaches to the collateral, whichever is later:

(1)    The person is a debtor or obligor; and

(2)    The secured party knows that the information in subsection (a)(1)(A), (B), or (C) relating to the person is not provided by the collateral, a record attached to or logically associated with the collateral, or the system in which the collateral is recorded.

Source: SL 2000, ch 231; SL 2024, ch 198, § 81.

57A-9-606. Time of default in connection with agricultural lien.

For purposes of this part, a default occurs in connection with an agricultural lien at the time the secured party becomes entitled to enforce the lien in accordance with the statute under which it was created.

Source: SL 2000, ch 231.

57A-9-607. Collection and enforcement by secured party.

(a) If so agreed, and in any event after default, a secured party:

(1)    May notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;

(2)    May take any proceeds to which the secured party is entitled under § 57A-9-315;

(3)    May enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;

(4)    If it holds a security interest in a deposit account perfected by control under § 57A-9-104(a)(1), may apply the balance of the deposit account to the obligation secured by the deposit account; and

(5)    If it holds a security interest in a deposit account perfected by control under § 57A-9-104(a)(2) or (3), may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.

(b) If necessary to enable a secured party to exercise under subsection (a)(3) the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded:

(1)    A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and

(2)    The secured party's sworn affidavit in recordable form stating that:

(A)    A default has occurred with respect to the obligation secured by the mortgage; and

(B)    The secured party is entitled to enforce the mortgage nonjudicially.

(c) A secured party shall proceed in a commercially reasonable manner if the secured party:

(1)    Undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and

(2)    Is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.

(d) A secured party may deduct from the collections made pursuant to subsection (c) reasonable expenses of collection and enforcement, including reasonable attorney's fees and legal expenses incurred by the secured party.

(e) This section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.

Source: SL 2000, ch 231; SL 2012, ch 238, § 17, eff. July 1, 2013.

57A-9-608. Application of proceeds of collection or enforcement--Liability for deficiency and right to surplus.

(a) If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:

(1)    A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under § 57A-9-607 in the following order to:

(A)    The reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;

(B)    The satisfaction of obligations secured by the security interest or agricultural lien under which the collection or enforcement is made; and

(C)    The satisfaction of obligations secured by any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lien under which the collection or enforcement is made if the secured party receives a signed demand for proceeds before distribution of the proceeds is completed.

(2)    If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder's demand under paragraph (1)(C).

(3)    A secured party need not apply or pay over for application noncash proceeds of collection and enforcement under § 57A-9-607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(4)    A secured party shall account to and pay a debtor for any surplus, and the obligor is liable for any deficiency.

(b) If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency.

Source: SL 2000, ch 231; SL 2024, ch 198, § 82.

57A-9-609. Secured party's rights with respect to collateral following default.

(a) After default, a secured party:

(1)    May take possession of the collateral; and

(2)    Without removal, may render equipment unusable and dispose of collateral on a debtor's premises under § 57A-9-610.

(b) A secured party may proceed under subsection (a):

(1)    Pursuant to judicial process; or

(2)    Without judicial process, if it proceeds without breach of the peace.

(c) If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.

Source: SL 2000, ch 231.

57A-9-609.1. Action for recovery of security by creditor against third party purchaser of farm products--Limitation period--Offer to file criminal complaint.

No cause of action for recovery of security or its value may be commenced by a secured creditor against an innocent third-party purchaser of farm products as defined in subsection (34) of § 57A-9-102, nor may such a cause of action be commenced against a livestock auction agency, as defined in chapter 40-15 and § 301 of the Packers and Stockyards Act (7 USC 201), or a public grain warehouse, or a public terminal grain warehouse, or a grain dealer as defined by chapters 49-43, 49-44, and 49-45 respectively, unless such action is commenced within twenty-four months from the date the farm products are sold and unless such action is preceded by the secured creditor offering to file against the debtor, a complaint as defined by § 23A-2-1.

Source: SL 2000, ch 231.

57A-9-609.2. Farm products fraud--Misdemeanor.

Any person who for himself, or through an agent, sells livestock through a livestock auction agency, as defined in chapter 40-15 and § 301 of the Packers and Stockyards Act (7 USC 201), or who so sells grain through a public grain warehouse, or through a public terminal grain warehouse, or a grain dealer as defined in chapters 49-43, 49-44, and 49-45 respectively, without notifying the livestock auction agency or the grain warehouse or grain dealer of a security interest in such farm products, and with intent to defraud, is guilty of farm products fraud. The failure of the seller to give written notice of a security interest in the farm products prior to the date of the sale by the livestock auction agency, or the grain warehouse, or grain dealer, is prima facie evidence of intent to defraud.

A violation of this section is a Class 1 misdemeanor.

Source: SL 2000, ch 231.

57A-9-610. Disposition of collateral after default--Treatment of warranties.

(a) After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing .

(b) Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms.

(c) A secured party may purchase collateral:

(1)    At a public disposition; or

(2)    At a private disposition only if the collateral is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations.

(d) A contract for sale, lease, license, or other disposition includes the warranties relating to title, possession, quiet enjoyment, and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.

(e) A secured party may disclaim or modify warranties under subsection (d):

(1)    In a manner that would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition; or

(2)    By communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.

(f) A record is sufficient to disclaim warranties under subsection (e) if it indicates "There is no warranty relating to title, possession, quiet enjoyment, or the like in this disposition" or uses words of similar import.

Source: SL 2000, ch 231.

57A-9-611. "Notification date"--Notification of disposition of collateral.

(a) In this section, "notification date" means the earlier of the date on which:

(1)    A secured party sends to the debtor and any secondary obligor a signed notification of disposition; or

(2)    The debtor and any secondary obligor waive the right to notification.

(b) Except as otherwise provided in subsection (d), a secured party that disposes of collateral under § 57A-9-610 shall send to the persons specified in subsection (c) a reasonable signed notification of disposition.

(c) To comply with subsection (b), the secured party shall send a signed notification of disposition to:

(1)    The debtor;

(2)    Any secondary obligor; and

(3)    If the collateral is other than consumer goods:

(A)    Any other person from which the secured party has received, before the notification date, a signed notification of a claim of an interest in the collateral;

(B)    Any other secured party or lienholder that, ten days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:

(i)    Identified the collateral;

(ii)    Was indexed under the debtor's name as of that date; and

(iii)    Was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and

(C)    Any other secured party that, ten days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in § 57A-9-311(a).

(d) Subsection (b) does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.

(e) A secured party complies with the requirement for notification prescribed by subsection (c)(3)(B) if:

(1)    Not later than twenty days or earlier than thirty days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor's name in the office indicated in subsection (c)(3)(B); and

(2)    Before the notification date, the secured party:

(A)    Did not receive a response to the request for information; or

(B)    Received a response to the request for information and sent a signed notification of disposition to each secured party or other lienholder named in that response whose financing statement covered the collateral.

Source: SL 2000, ch 231; SL 2024, ch 198, § 83.

57A-9-612. Reasonable time for sending notification.

(a) Except as otherwise provided in subsection (b), whether a notification is sent within a reasonable time is a question of fact.

(b) In a transaction other than a consumer transaction, a notification of disposition sent after default and ten days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.

Source: SL 2000, ch 231.

57A-9-613. Contents and form of notification before disposition of collateral--General.

(a) Except in a consumer-goods transaction, the following rules apply:

(1)    The contents of a notification of disposition are sufficient if the notification:

(A)    Describes the debtor and the secured party;

(B)    Describes the collateral that is the subject of the intended disposition;

(C)    States the method of intended disposition;

(D)    States that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and

(E)    States the time and place of a public disposition or the time after which any other disposition is to be made.

(2)    Whether the contents of a notification that lacks any of the information specified in paragraph (1) are nevertheless sufficient is a question of fact.

(3)    The contents of a notification providing substantially the information specified in paragraph (1) are sufficient, even if the notification includes:

(A)    Information not specified by that paragraph; or

(B)    Minor errors that are not seriously misleading.

(4)    A particular phrasing of the notification is not required.

(5)    The following form of notification and the form appearing in § 57A-9-614(a)(3), when completed in accordance with the instructions in subsection (b) and § 57A-9-614(b), each provides sufficient information:

NOTIFICATION OF DISPOSITION OF COLLATERAL

To: (Name of debtor, obligor, or other person to which the notification is sent)

From: (Name, address, and telephone number of secured party)

{1} Name of any debtor that is not an addressee: (Name of each debtor)

{2} We will sell (describe collateral) (to the highest qualified bidder) at public sale. A sale could include a lease or license. The sale will be held as follows:

(Date)

(Time)

(Place)

{3} We will sell (describe collateral) at private sale sometime after (date). A sale could include a lease or license.

{4} You are entitled to an accounting of the unpaid indebtedness secured by the property that we intend to sell or, as applicable, lease or license.

{5} If you request an accounting, you must pay a charge of $ (amount).

{6} You may request an accounting by calling us at (telephone number).

[END OF FORM]

(b) The following instructions apply to the form of notification in subsection (a)(5):

(1)    The instructions in this subsection refer to the numbers in braces before items in the form of notification in subsection (a)(5). Do not include numbers or braces in the notification. The numbers and braces are used only for the purpose of these instructions;

(2)    Include and complete {1} only if there is a debtor that is not an addressee of the notification and list the name or names;

(3)    Include and complete either item {2}, if the notification relates to a public disposition of the collateral, or item {3}, if the notification relates to a private disposition of the collateral. If item {2} is included, include the words "to the highest qualified bidder" only if applicable;

(4)    Include and complete items {4} and {6}; and

(5)    Include and complete item {5} only if the sender will charge the recipient for an accounting.

Source: SL 2000, ch 231; SL 2024, ch 198, § 84.

57A-9-614. Contents and form of notification before disposition of collateral--Consumer-goods transaction.

(a) In a consumer-goods transaction, the following rules apply:

(1)    A notification of disposition must provide the following information:

(A)    The information specified in § 57A-9-613(a)(1);

(B)    A description of any liability for a deficiency of the person to which the notification is sent;

(C)    A telephone number from which the amount that must be paid to the secured party to redeem the collateral under § 57A-9-623 is available; and

(D)    A telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.

(2)    A particular phrasing of the notification is not required.

(3)    The following form of notification, when completed in accordance with the instructions in subsection (b), provides sufficient information:

(Name and address of secured party)

(Date)

NOTICE OF OUR PLAN TO SELL PROPERTY

(Name and address of any obligor who is also a debtor)

Subject: (Identify transaction)

We have your (describe collateral), because you broke promises in our agreement.

{1} We will sell (describe collateral) at public sale. A sale could include a lease or license. The sale will be held as follows:

(Date)

(Time)

(Place)

You may attend the sale and bring bidders if you want.

{2} We will sell (describe collateral) at private sale sometime after (date). A sale could include a lease or license.

{3} The money that we get from the sale, after paying our costs, will reduce the amount you owe. If we get less money than you owe, you (will or will not, as applicable) still owe us the difference. If we get more money than you owe, you will get the extra money, unless we must pay it to someone else.

{4} You can get the property back at any time before we sell it by paying us the full amount you owe, not just the past due payments, including our expenses. To learn the exact amount you must pay, call us at (telephone number).

{5} If you want us to explain to you in (writing) (writing or in (description of electronic record)) (description of electronic record) how we have figured the amount that you owe us, {6} call us at (telephone number) (or) (write us at (secured party's address)) (or contact us by (description of electronic communication method)) {7} and request (a written explanation) (a written explanation or an explanation in (description of electronic record)) (an explanation in description of electronic record).

{8} We will charge you $ (amount) for the explanation if we sent you another written explanation of the amount you owe us within the last six months.

{9} If you need more information about the sale, (call us at (telephone number)) (or) (write us at (secured party's address)) (or contact us by (description of electronic communication method)).

{10} We are sending this notice to the following other people who have interest in (describe collateral) or who owe money under your agreement:

(Names of all other debtors and obligors, if any)

[END OF FORM]

(4)    A notification in the form of paragraph (3) is sufficient, even if additional information appears at the end of the form.

(5)    A notification in the form of paragraph (3) is sufficient, even if it includes errors in information not required by paragraph (1), unless the error is misleading with respect to rights arising under this chapter.

(6)    If a notification under this section is not in the form of paragraph (3), law other than this article determines the effect of including information not required by paragraph (1).

(b) The following instructions apply to the form of notification in subsection (a)(3):

(1)    The instructions in this subsection refer to the numbers in braces before items in the form of notification in subsection (a)(3). Do not include the numbers or braces in the notification. The numbers and braces are used only for the purpose of these instructions;

(2)    Include and complete either item {1}, if the notification relates to a public disposition of the collateral, or item {2}, if the notification relates to a private disposition of the collateral;

(3)    Include and complete items {3}, {4}, {5}, {6}, and {7};

(4)    In item {5}, include and complete any one of the three alternative methods for the explanation, writing, writing or electronic record, or electronic record;

(5)    In item {6}, include the telephone number. In addition, the sender may include and complete either or both of the two additional alternative methods of communication, writing or electronic communication, for the recipient of the notification to communicate with the sender. Neither of the two additional methods of communication is required to be included;

(6)    In item {7}, include and complete the method or methods for the explanation, writing, writing or electronic record, or electronic record, included in item {5};

(7)    Include and complete item {8} only if a written explanation is included in item {5} as a method for communicating the explanation and the sender will charge the recipient for another written explanation;

(8)    In item {9}, include either the telephone number or the address or both the telephone number and the address. In addition, the sender may include and complete the additional method of communication, electronic communication, for the recipient of the notification to communicate with the sender. That additional method of electronic communication is not required to be included; and

(9)    If item {10} does not apply, insert "None" after "agreement:".

Source: SL 2000, ch 231; SL 2024, ch 198, § 85.

57A-9-615. Application of proceeds of disposition--Liability for deficiency and right to surplus.

(a) A secured party shall apply or pay over for application the cash proceeds of disposition under § 57A-9-610 in the following order to:

(1)    The reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;

(2)    The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made;

(3)    The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:

(A)    The secured party receives from the holder of the subordinate security interest or other lien a signed demand for proceeds before distribution of the proceeds is completed; and

(B)    In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and

(4)    A secured party that is a consignor of the collateral if the secured party receives from the consignor a signed demand for proceeds before distribution of the proceeds is completed.

(b) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder's demand under subsection (a)(3).

(c) A secured party need not apply or pay over for application noncash proceeds of disposition under § 57A-9-610 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(d) If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subsection (a) and permitted by subsection (c):

(1)    Unless subsection (a)(4) requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and

(2)    The obligor is liable for any deficiency.

(e) If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes:

(1)    The debtor is not entitled to any surplus; and

(2)    The obligor is not liable for any deficiency.

(f) The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been realized in a disposition complying with this part to a transferee other than the secured party, a person related to the secured party, or a secondary obligor if:

(1)    The transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor; and

(2)    The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.

(g) A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under which the disposition is made:

(1)    Takes the cash proceeds free of the security interest or other lien;

(2)    Is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien; and

(3)    Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.

Source: SL 2000, ch 231; SL 2024, ch 198, § 86.

57A-9-616. Explanation of calculation of surplus or deficiency.

(a) In this section:

(1)    "Explanation" means a record that:

(A)    States the amount of the surplus or deficiency;

(B)    Provides an explanation in accordance with subsection (c) of how the secured party calculated the surplus or deficiency;

(C)    States, if applicable, that future debits, credits, charges, including additional credit service charges or interest, rebates, and expenses may affect the amount of the surplus or deficiency; and

(D)    Provides a telephone number or mailing address from which additional information concerning the transaction is available.

(2)    "Request" means a record:

(A)    Signed by a debtor or consumer obligor;

(B)    Requesting that the recipient provide an explanation; and

(C)    Sent after disposition of the collateral under § 57A-9-610.

(b) In a consumer-goods transaction in which the debtor is entitled to a surplus or a consumer obligor is liable for a deficiency under § 57A-9-615, the secured party shall:

(1)    Send an explanation to the debtor or consumer obligor, as applicable, after the disposition and:

(A)    Before or when the secured party accounts to the debtor and pays any surplus or first makes demand in a record on the consumer obligor after the disposition for payment of the deficiency; and

(B)    Within fourteen days after receipt of a request; or

(2)    In the case of a consumer obligor who is liable for a deficiency, within fourteen days after receipt of a request, send to the consumer obligor a record waiving the secured party's right to a deficiency.

(c) To comply with subsection (a)(1)(B), an explanation must provide the following information in the following order:

(1)    The aggregate amount of obligations secured by the security interest under which the disposition was made, and, if the amount reflects a rebate of unearned interest or credit service charge, an indication of that fact, calculated as of a specified date:

(A)    If the secured party takes or receives possession of the collateral after default, not more than thirty-five days before the secured party takes or receives possession; or

(B)    If the secured party takes or receives possession of the collateral before default or does not take possession of the collateral, not more than thirty-five days before the disposition;

(2)    The amount of proceeds of the disposition;

(3)    The aggregate amount of the obligations after deducting the amount of proceeds;

(4)    The amount, in the aggregate or by type, and types of expenses, including expenses of retaking, holding, preparing for disposition, processing, and disposing of the collateral, and attorney's fees secured by the collateral which are known to the secured party and relate to the current disposition;

(5)    The amount, in the aggregate or by type, and types of credits, including rebates of interest or credit service charges, to which the obligor is known to be entitled and which are not reflected in the amount in paragraph (1); and

(6)    The amount of the surplus or deficiency.

(d) A particular phrasing of the explanation is not required. An explanation complying substantially with the requirements of subsection (a) is sufficient, even if it includes minor errors that are not seriously misleading.

(e) A debtor or consumer obligor is entitled without charge to one response to a request under this section during any six-month period in which the secured party did not send to the debtor or consumer obligor an explanation pursuant to subsection (b)(1). The secured party may require payment of a charge not exceeding twenty-five dollars for each additional response.

Source: SL 2000, ch 231; SL 2024, ch 198, § 87.

57A-9-617. Rights of transferee of collateral disposed of after default.

(a) A secured party's disposition of collateral after default:

(1)    Transfers to a transferee for value all of the debtor's rights in the collateral;

(2)    Discharges the security interest under which the disposition is made; and

(3)    Discharges any subordinate security interest or other subordinate lien, other than liens created by law that are not to be discharged.

(b) A transferee that acts in good faith takes free of the rights and interests described in subsection (a), even if the secured party fails to comply with this chapter or the requirements of any judicial proceeding.

(c) If a transferee does not take free of the rights and interests described in subsection (a), the transferee takes the collateral subject to:

(1)    The debtor's rights in the collateral;

(2)    The security interest or agricultural lien under which the disposition is made; and

(3)    Any other security interest or other lien.

Source: SL 2000, ch 231.

57A-9-618. Rights and duties of secondary obligor.

(a) A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after the secondary obligor:

(1)    Receives an assignment of a secured obligation from the secured party;

(2)    Receives a transfer of collateral from the secured party and agrees to accept the rights and assume the duties of the secured party; or

(3)    Is subrogated to the rights of a secured party with respect to collateral.

(b) An assignment, transfer, or subrogation described in subsection (a):

(1)    Is not a disposition of collateral under § 57A-9-610; and

(2)    Relieves the secured party of further duties under this chapter.

Source: SL 2000, ch 231.

57A-9-619. Transfer of record or legal title.

(a) In this section, "transfer statement" means a record signed by a secured party stating:

(1)    That the debtor has defaulted in connection with an obligation secured by specified collateral;

(2)    That the secured party has exercised its post-default remedies with respect to the collateral;

(3)    That, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral; and

(4)    The name and mailing address of the secured party, debtor, and transferee.

(b) A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in the statement in any official filing, recording, registration, or certificate-of-title system covering the collateral. If a transfer statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the official or office shall:

(1)    Accept the transfer statement;

(2)    Promptly amend its records to reflect the transfer; and

(3)    If applicable, issue a new appropriate certificate of title in the name of the transferee.

(c) A transfer of the record or legal title to collateral to a secured party under subsection (b) or otherwise is not of itself a disposition of collateral under this chapter and does not of itself relieve the secured party of its duties under this chapter.

Source: SL 2000, ch 231; SL 2024, ch 198, § 88.

57A-9-620. Acceptance of collateral in full or partial satisfaction of obligation--Compulsory disposition of collateral.

(a) Except as otherwise provided in subsection (g), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:

(1)    The debtor consents to the acceptance under subsection (c);

(2)    The secured party does not receive, within the time set forth in subsection (d), a notification of objection to the proposal signed by:

(A)    A person to which the secured party was required to send a proposal under § 57A-9-621; or

(B)    Any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;

(3)    If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and

(4)    Subsection (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to § 57A-9-624.

(b) A purported or apparent acceptance of collateral under this section is ineffective unless:

(1)    The secured party consents to the acceptance in a signed record or sends a proposal to the debtor; and

(2)    The conditions of subsection (a) are met.

(c) For purposes of this section:

(1)    A debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record signed after default; and

(2)    A debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record signed after default or the secured party:

(A)    Sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;

(B)    In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and

(C)    Does not receive a notification of objection signed by the debtor within twenty days after the proposal is sent.

(d) To be effective under subsection (a)(2), a notification of objection must be received by the secured party:

(1)    In the case of a person to which the proposal was sent pursuant to § 57A-9-621, within twenty days after notification was sent to that person; and

(2)    In other cases:

(A)    Within twenty days after the last notification was sent pursuant to § 57A-9-621; or

(B)    If a notification was not sent, before the debtor consents to the acceptance under subsection (c).

(e) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to § 57A-9-610 within the time specified in subsection (f) if:

(1)    Sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or

(2)    Sixty percent of the principal amount of the obligation secured has been paid in the case of a non-purchase-money security interest in consumer goods .

(f) To comply with subsection (e), the secured party shall dispose of the collateral:

(1)    Within ninety days after taking possession; or

(2)    Within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and signed after default.

(g) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.

Source: SL 2000, ch 231; SL 2024, ch 198, § 89.

57A-9-621. Notification of proposal to accept collateral.

(a) A secured party that desires to accept collateral in full or partial satisfaction of the obligation it secures shall send its proposal to:

(1)    Any person from which the secured party has received, before the debtor consented to the acceptance, a signed notification of a claim of an interest in the collateral;

(2)    Any other secured party or lienholder that, ten days before the debtor consented to the acceptance, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:

(A)    Identified the collateral;

(B)    Was indexed under the debtor's name as of that date; and

(C)    Was filed in the office or offices in which to file a financing statement against the debtor covering the collateral as of that date; and

(3)    Any other secured party that, ten days before the debtor consented to the acceptance, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in § 57A-9-311(a).

(b) A secured party that desires to accept collateral in partial satisfaction of the obligation it secures shall send its proposal to any secondary obligor in addition to the persons described in subsection (a).

Source: SL 2000, ch 231; SL 2024, ch 198, § 90.

57A-9-622. Effect of acceptance of collateral.

(a) A secured party's acceptance of collateral in full or partial satisfaction of the obligation it secures:

(1)    Discharges the obligation to the extent consented to by the debtor;

(2)    Transfers to the secured party all of a debtor's rights in the collateral;

(3)    Discharges the security interest or agricultural lien that is the subject of the debtor's consent and any subordinate security interest or other subordinate lien; and

(4)    Terminates any other subordinate interest.

(b) A subordinate interest is discharged or terminated under subsection (a), even if the secured party fails to comply with this chapter.

Source: SL 2000, ch 231.

57A-9-623. Persons who may redeem collateral--Procedure.

(a) A debtor, any secondary obligor, or any other secured party or lienholder may redeem collateral.

(b) To redeem collateral, a person shall tender:

(1)    Fulfillment of all obligations secured by the collateral; and

(2)    The reasonable expenses and attorney's fees described in § 57A-9-615(a)(1).

(c) A redemption may occur at any time before a secured party:

(1)    Has collected collateral under § 57A-9-607;

(2)    Has disposed of collateral or entered into a contract for its disposition under § 57A-9-610; or

(3)    Has accepted collateral in full or partial satisfaction of the obligation it secures under § 57A-9-622.

Source: SL 2000, ch 231.

57A-9-624. Waiver.

(a) A debtor or secondary obligor may waive the right to notification of disposition of collateral under § 57A-9-611 only by an agreement to that effect entered into and signed after default.

(b) A debtor may waive the right to require disposition of collateral under § 57A-9-620(e) only by an agreement to that effect entered into and signed after default.

(c) Except in a consumer-goods transaction, a debtor or secondary obligor may waive the right to redeem collateral under § 57A-9-623 only by an agreement to that effect entered into and signed after default.

Source: SL 2000, ch 231; SL 2024, ch 198, § 91.

57A-9-625. Sanctions for failure to proceed in accordance with chapter--Liability for damages.

(a) If it is established that a secured party is not proceeding in accordance with this chapter, a court may order or restrain collection, enforcement, or disposition of collateral on appropriate terms and conditions.

(b) Subject to subsections (c) and (d) a person is liable for damages in the amount of any loss caused by a failure to comply with this chapter. Loss caused by a failure to comply may include loss resulting from the debtor's inability to obtain, or increased costs of, alternative financing.

(c) Except as otherwise provided in § 57A-9-628:

(1)    A person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or other lien on the collateral may recover damages under subsection (b) for its loss; and

(2)    If the collateral is consumer goods, a person that was a debtor or a secondary obligor at the time a secured party failed to comply with this part may recover for that failure in any event an amount not less than the credit service charge plus 10 percent of the principal amount of the obligation or the time-price differential plus 10 percent of the cash price.

(d) A debtor whose deficiency is eliminated under § 57A-9-626 may recover damages for the loss of any surplus. However, a debtor or secondary obligor whose deficiency is eliminated or reduced under § 57A-9-626 may not otherwise recover under subsection (b) for noncompliance with the provisions of this part relating to collection, enforcement, disposition, or acceptance.

(e) If a secured party fails to comply with a request regarding a list of collateral or a statement of account under § 57A-9-210, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.

Source: SL 2000, ch 231.

57A-9-626. Action in which amount of deficiency or surplus is in issue.

(a) In an action arising from a transaction in which the amount of a deficiency or surplus is in issue, the following rules apply:

(1)    A secured party need not prove compliance with the provisions of this part relating to collection, enforcement, disposition, or acceptance unless the debtor or a secondary obligor places the secured party's compliance in issue.

(2)    If the secured party's compliance is placed in issue, the secured party has the burden of establishing that the collection, enforcement, disposition, or acceptance was conducted in accordance with this part.

(3)    Except as otherwise provided in § 57A-9-628, if a secured party fails to prove that the collection, enforcement, disposition, or acceptance was conducted in accordance with the provisions of this part relating to collection, enforcement, disposition, or acceptance, the liability of a debtor or a secondary obligor for a deficiency is limited to an amount by which the sum of the secured obligation, expenses, and attorney's fees exceeds the greater of:

(A)    The proceeds of the collection, enforcement, disposition, or acceptance; or

(B)    The amount of proceeds that would have been realized had the noncomplying secured party proceeded in accordance with the provisions of this part relating to collection, enforcement, disposition, or acceptance.

(4)    For purposes of paragraph (3)(B), the amount of proceeds that would have been realized is equal to the sum of the secured obligation, expenses, and attorney's fees unless the secured party proves that the amount is less than that sum.

(5)    If a deficiency or surplus is calculated under § 57A-9-615(f), the debtor or obligor has the burden of establishing that the amount of proceeds of the disposition is significantly below the range of prices that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.