Fixture filings establish priority against encumbrances on what property?

Fixture filings establish priority against encumbrances on what property?

• A. Fixtures attached to real property
• B. Leased equipment not attached
• C. Personal vehicles
• D. Fixtures are optional

Answer: (A)

Fixture filings are used to perfect a security interest in items that are attached to real property and become fixtures. By filing in the real property records, a lender gives notice of its lien on those fixtures, establishing priority against other encumbrances that might attach to the same fixtures or to the property they’re affixed to. This matters because once something is a fixture, it’s treated as part of the real property for purposes of priority among creditors. Leased equipment not attached isn’t a fixture, personal vehicles aren’t fixtures, and the idea that fixtures are optional isn’t correct. Therefore, fixture filings establish priority against encumbrances on fixtures attached to real property.

Fixture filings are used to perfect a security interest in items that are attached to real property and become fixtures. By filing in the real property records, a lender gives notice of its lien on those fixtures, establishing priority against other encumbrances that might attach to the same fixtures or to the property they’re affixed to. This matters because once something is a fixture, it’s treated as part of the real property for purposes of priority among creditors. Leased equipment not attached isn’t a fixture, personal vehicles aren’t fixtures, and the idea that fixtures are optional isn’t correct. Therefore, fixture filings establish priority against encumbrances on fixtures attached to real property.