1. LIENS

2. Encumbrance- anything that affects the title of property Transfer Lien- a form of security interest in an item of property to secure the payment of a debt or performance of some other obligation. –Can be possessory, but usually non-possessory –Attaches to both real and personal property –Voluntary and involuntary –Priority…who eats first! –State and federal law and regulation

3. LIENS Credit- an advancement of money, goods, services, etc., with the obligation of payment –Historical and usury –Risk, risk management, and risk shifting –Live below your means (no free lunch) –Cost of credit Credit card Unsecured obligation Secured by personal property Secured by real estate –Regulation, e.g. Community Reinvestment Act (CRA)

4. LIENS Unsecured Secured –After acquired property clause –Cognovits clause (confession of judgment) –Recordation for real estate –Perfection for personal property –Default and issue of a deficiency Bankruptcy

5. LIENS Stakeholders –Construction lender –General contractor –Fixture lender –Subcontractor –Professionals –Buyer –Buyer’s lender Stakeholders (cont.) –Title insurance company –Property and casualty insurance companies –Landlord/tenant –Government –Other

6. LIENS Parties –Lienor- attaches a lien –Lienee- property is subject to the lien Types of liens –Contractual –Judicial –Statutory Tax Artisan’s Mechanics

7. LIENS Mechanics liens –Real property and exemptions –General contractors –Subcontractors –Supplied labor –Supplied materials –“Hidden Lien” and potential unfairness (someone losses) –Procedure and state laws –Termination –Constitutionality

8. LIENS Security interests –Real property- mortgage (later) –Personal property UCC Article 9 Creation of the security interest Perfection Financing statement Recordation Issue of fixtures Record with land records??? Termination filing Purchase money security interest (PMSI)

9. LIENS Priorities under UCC Article 9 –Secured over unsecured –Perfected secured over subsequent real estate interests –Perfected secured creditor over unperfected secured creditor –Prior recorded real estate interest over a subsequently filed security interest –Between perfected secured creditors first in time is first in right –PMSI has priority if financing statement filed within 20 days of fixture becoming attached –Some exceptions