What determines the term of a security interest under UCC filings?

• A. The term is generally five years per financing statement, extendable by timely continuation statements; the lien remains until properly terminated.
• B. The term is ten years with automatic renewal.
• C. The term is two years and cannot be extended.
• D. The term is indefinite.

Answer: (A)

The key idea is that the term of a security interest is tied to the life of the financing statement used to perfect that interest. A financing statement generally lasts five years from the filing date. To keep the security interest alive beyond those five years, you file a continuation statement within the six-month window before the expiration. If you file it timely, the term is extended for another five years from the expiration date. The lien stays effective until it’s properly terminated (for example, by filing a termination statement when the obligation is satisfied or released). This is why the five-year framework with a timely continuation option is the correct description, not a fixed ten-year, two-year, or indefinite term.