When collateral is a fixture, how is perfection typically achieved?

• A. A UCC-1 financing statement is filed, and a fixture filing is typically filed in the real property records where the fixture is attached to the land.
• B. Only a UCC-1 financing statement is filed with the secretary of state.
• C. Perfection is automatic for fixtures.
• D. A mortgage must be recorded instead.

Answer: (A)

Perfection of a security interest in fixtures requires giving notice in both the personal-property records and the real-property records. A UCC-1 financing statement is filed to perfect the security interest in the collateral generally, but fixtures—being attached to real property—also require a fixture filing in the real property records where the fixture is affixed. This dual filing puts third parties on notice of the lender’s interest in the fixture and protects priority against later liens or purchasers of the land. Filing only the UCC-1 does not inform the land-records holders about the fixture lien, and perfection is not automatic. Recording a mortgage can affect the property, but it is not the mechanism to perfect a security interest in fixtures. Therefore, the correct approach is to file both the UCC-1 and the fixture filing in the appropriate real property records.