Written by attorneys · grounded in primary & secondary sources — see below
A person holding a non-ownership interest in real property. The interest typically takes the form of a lien or mortgage and arises under real property law rather than personal property law.
Sources & Authorities
How it applies
Common Examples
4
Mortgagee Claims Fixtures
Eva Espinosa granted Everest Holdings a mortgage on her factory to secure a loan. Two years later Eva purchased robotic equipment on credit from Elite Dynamics, which perfected a security interest by fixture filing. When Eva defaulted, Everest Holdings asserted its mortgage against the equipment after it became affixed to the building. The security interest is subordinate to Everest Holdings interest because the mortgage arose before the goods became fixtures and no exception applies.
Prior Mortgage on Land
Emily Ellis owned a warehouse and granted Emerald Enterprises a recorded mortgage. Emily later bought hydraulic lifts on credit from Enigma Technologies, which took a purchase-money security interest and made a timely fixture filing. The lifts were bolted into the floor and became fixtures. Emerald Enterprises interest arose before the lifts became fixtures, so its encumbrance takes priority over the security interest.
Put it into practice
Test Yourself
10
Practice Questions5
· 10 primary sources
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Statutes
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Dictionaries
Fixture Filing Before Mortgage
Edith Eberhardt leased a building and bought built-in partitions financed by a purchase-money security interest from Everest Holdings. Everest Holdings perfected by a proper fixture filing while Edith was in possession. Months later the landlord granted a mortgage to Elite Dynamics. Because the fixture filing occurred before Elite Dynamics interest was recorded, Everest Holdings holds priority over the encumbrancer.
Predecessor in Title
Evelyn Ellison purchased a building from a prior owner who had granted a mortgage to Emerald Enterprises. Evelyn then financed laboratory benches with a purchase-money security interest from Enigma Technologies, which perfected by fixture filing before the mortgage was recorded. The security interest takes priority over Emerald Enterprises interest because it also prevails over any conflicting claim derived from the predecessor in title.
Common questions
Frequently Asked
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How does an encumbrancer differ from an owner in fixture priority disputes?+
An encumbrancer holds a non-ownership interest such as a mortgage or lien. An owner holds title. Both can assert interests against a security interest in fixtures, but the priority rules in UCC § 9-334 treat them similarly when the encumbrancer or owner is not the debtor.
Supporting sources
When does an encumbrancer prevail over a security interest in fixtures?+
An encumbrancer prevails under the general rule when its interest arises before the goods become fixtures and the security interest does not meet an exception such as a timely purchase-money fixture filing. The mortgage or lien must be of record or otherwise perfected under real property law.
Supporting sources
Can a later fixture filing defeat an earlier encumbrancer?+
Yes when the security interest is a purchase-money interest, the debtor has an interest in or possession of the real property, and the fixture filing occurs before the encumbrancer interest is of record. The priority also extends over claims derived from a predecessor in title of the encumbrancer.
Supporting sources
Real PropertyMortgages and foreclosure · Mortgages and deeds of trustNEXTGENIntermediate