Also known as:§ 9-316 · UCC § 9-316 · 9-316 · §9-316
Written by attorneys · grounded in primary & secondary sources — see below
A statutory rule governing the effect of a change in the law applicable to perfection of a security interest. The rule provides that a security interest perfected under the law of the jurisdiction designated in section 9-301(1) or 9-305(c) remains perfected until the earliest of specified events, including the time perfection would have lapsed under the law of the original jurisdiction or four months after the debtor becomes subject to the new jurisdiction.
Sources & Authorities
How it applies
Common Examples
2
Delayed Filing After Attachment
Summit Stay executes a security agreement with Pacific Lodging and receives loan funds on the same day, satisfying attachment for the hotel furniture and fixtures. Pacific Lodging files its financing statement four months later. Star Stay records a lien on the same collateral two months after the security agreement but before the filing. Because the filing occurs after Star Stay's lien arises, Pacific Lodging's interest remains unperfected during the gap and Star Stay holds priority.
New Debtor Financing Statement Priority
Zenith Cars grants Stone Motor a security interest in shop equipment and accounts receivable. Stone files a financing statement using Zenith's former individual name rather than the LLC name. Park Vehicle later obtains a judgment lien on the same collateral. The defective filing renders Stone's interest unperfected against Park as a lien creditor, so Park prevails on the equipment and receivables.
Put it into practice
Test Yourself
5
Practice Essays5
· 7 primary sources
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Hornbooks
Common questions
Frequently Asked
3
How long does perfection continue after a debtor relocates to a new jurisdiction?+
Under the rule, the security interest remains perfected for the shortest of the listed periods: the remaining perfection period under the original jurisdiction's law or four months after the debtor becomes subject to the new jurisdiction's law.
Supporting sources
Does a financing statement filed using the debtor's former name perfect the interest?+
No. The financing statement must provide the debtor's correct legal name. A filing using a former individual name for an LLC is seriously misleading and ineffective, leaving the interest unperfected against subsequent lien creditors.
Supporting sources
What happens to perfection of an interest in after-acquired collateral when filing is delayed?+
Attachment to after-acquired property occurs automatically upon the debtor acquiring rights, but perfection requires a timely filing. A judicial lien arising before the filing date takes priority over the unperfected security interest in those assets.
Supporting sources
Secured TransactionsRights of third parties; perfected and unperfected security interests; rules of priority (§ 9-301, et seq.) · Requirement of filing and steps to be taken for perfection (§§ 9-308 through 9-316; § 9-501, et seq.); assignment of security interest (§§ 9-514, 9-519)UBEFoundational