When UCC Meets Real Property: Fixture Filings for Solar Energy and Home Improvement Finance

Annie: Hello, everyone, and welcome to today's webinar, "When UCC Meets Real Property: Managing Fixture Filings for Solar Energy and Home Improvement Finance." My name is Annie Triboletti. I will be your moderator kicking things off today.

So joining us for our webinar are Donna Christensen and Julia Cleaver. Donna has more than 25 years of experience in the UCC corporate and legal services industry. She joined CSC's Financial Services team as a national account executive in 2002 and has worked closely with many clients, including national and regional banks, equipment finance companies, credit unions, and capital finance companies. Julia is a sales engineer at CSC, specializing in UCC filing solutions and workflow optimization. Since joining CSC in 2006, Julia has worked to provide comprehensive solutions to our clients that specialize in secured transactions. Julia provides initial onboarding and training as well as in-depth demonstrations of CSC's portfolio of solutions, including CSC Lien Perfect for Lenders.

So with that all said, I would like to welcome in Donna and Julia.

Donna: Thank you, Annie. Hello, this is Donna and welcome. We're happy to be here with you today. Julia and I are really pleased to talk to you today about a specific type of UCC financing statement that is known as a fixture filing.

But first, a little bit about CSC. We have been in business for more than 125 years, and we are the world's leading provider of compliance and business administration services for companies all around the globe. More than 90% of both the Fortune 500 and 100 Best Global Brands select CSC for a wide range of services related to corporate governance and compliance.

One of those areas is CSC's UCC services. We're the leader in that industry, with the most advanced UCC platform and the largest online database for searching. Our clients tend to be banks, leasing companies, credit unions, capital companies, asset-based lenders, and more. The notable numbers on this slide, one of the things I'll call out is that we are known especially for our customer service, with more than 22 people on a team of account managers and account specialists supporting our clients. And every single customer has an account team assigned to them.

Today we're covering the fundamentals of fixture filings. what they are, how they differ from state-level filings, and how they are prepared in Lien Perfect. We'll also review that platform in greater detail with tools specifically for county fixture filings.

So let's start with what is a fixture. The Uniform Code defines fixtures as goods that either have been or will be so related to particular real estate property that an interest in them arises under real property law. In other words, when the financed asset is attached or affixed to real property, that could be a piece of property or a building on that property, lenders may need to consider both UCC and real property filing requirements when securing their interest in that asset. Examples of financed goods that can be considered as fixtures are solar panels, HVAC systems, pumps, generators, whole geothermal systems, restaurant or manufacturing equipment, home improvements as we mentioned earlier, like cabinetry. Even inground swimming pools or spas can be considered fixtures.

So when you want to secure your interest in a fixture, what do you do? There are basically three methods of perfecting security interest under Article 9.

State-level UCCs are filed at the secretary of state or the equivalent filing office in that state. The good, old-fashioned UCC-1 statement filed on the debtor to perfect a security interest in personal property, specifically stating that it includes fixtures. Article 9 rules apply here. And for a state-level filing, the legal description and record owner of property are not required.

The second kind, the second method is a county UCC fixture filing. This is filed in the county real estate records where the asset, where the fixture is located or will be located. The UCC serves as notice of the lender's security interest in the land records. So it will appear on a title search. The fixture must include the legal description and the record owner name so it can be indexed in those land records.

The third method of securing security interest in a fixture is a recorded mortgage or a deed of trust or other conveyance of security interest, which includes language covering the fixtures. These are also filed in county real estate records.

It's notable that some lenders file one or more of these documents to secure their interest. They may file a state-level filing and a county filing. The state-level filing follows the debtor. The county filing follows the property. Or another combination might be appropriate. It depends on your transaction, and we always suggest consulting with your legal counsel regarding the best process for your business.

For the purpose of today's discussion, we are focusing specifically on county fixture filings, UCCs filed in county real estate records. First, we're going to talk a little about the fixture filing itself and how it differs from a state-level filing.

The first thing, off the top, is that the UCC-1 addendum form is required for a UCC fixture filing, indicating that it is to be recorded as a fixture. There's a little box on the form. You check the box that says "Fixture," and that indicates that it shall be recorded in the real estate records as a fixture. The second, the addendum also requires property details, like the record owner name, the legal description, the parcel number.

Another way the UCC filed at the county differs from the state-level filing is that county recording requirements can vary by jurisdiction or by state. The state-level filings tend to be quite uniform, where the county requirements can vary depending on fees, filing methods, etc. CSC has built validators in Lien Perfect to help guide the user regarding those unique requirements by county.

Another way that UCCs filed at the county are different is the indexing. The state-level filings are indexed in the central filing office, usually the secretary of state, and they can be easily searched online in most cases. County UCC fixture filings are recorded and indexed in the land record or the grantee/grantor records and so are less accessible through online searching.

And then, finally, I'll mention that amendments to fixture filings can be a little more complex as there's no standard form to file a UCC-3 to amend certain parts of the fixture filing, such as the legal description or the record owner. And so those have to be handled in a somewhat manual process.

Now we will talk a little bit about what's needed to prepare a UCC-1 fixture filing. The basic information that a UCC form requires, either at the state or county level, is the debtor information, legal name and address of the borrower or borrowers, secured party name and address, and the collateral description. The county filing will also require the real property information. That would be the legal description of the property to which the fixture is attached. And in many cases the parcel number is required. The addendum will also require the record owner information of the property so it can be properly indexed in the county records. And then, as I mentioned, filing office requirements, some states require additional information regarding taxes that may be due or book and page number. Or there are even requirements about the submission method.

I mentioned Lien Perfect for Lenders a little bit earlier, and in a moment we're going to walk through what it looks like to prepare a UCC fixture filing in Lien Perfect. Lien Perfect was developed over the last several years and was released in early 2025 to our clients. And we're excited that it includes a lot of powerful tools to manage the entire UCC process. That includes UCC searching and other public record document retrieval, filing preparation and recording, portfolio monitoring and management, which are time-saving tools to help you manage your entire portfolio, and then also tracking services that can assist you in staying informed about your borrower or debtor over the life of that transaction.

Lien Perfect also includes many features that make preparing and managing UCCs a lot easier and more intuitive. Lien Perfect has a workspace, the command center for all search and filing activity, which Julia will be showing you. We also have a dashboard, which is a high-level view of your portfolio, with quick links to expiration reports, in-process orders, and other custom reports that you'd like to set up. But we also focused heavily on fixture filings in our development of this platform, knowing that so many of our clients are filing fixtures, we're seeing more than ever before, and we wanted to offer the best tools that are available in the industry.

More specifically related to fixture filings, Lien Perfect includes, as I mentioned, those county-specific validators, where we are tapping into our extensive jurisdiction knowledge base and providing alerts, notifications or validators for specific requirements in counties. We also have developed something really exciting. It's a self-import template, which means you can upload batches of UCC data, your borrower information in other words, along with the filing information that's required to create bulk projects of UCC filings. That can be UCC-1s or UCC-3s.

I mentioned taxes before too. In the states where taxes can be applicable, Alabama, Florida, Maryland, and Tennessee, our system will prompt for the required information, whether the tax applies or not, what the amount of indebtedness is. And CSC can even assist in paying those taxes on our client's behalf.

Another built-in tool, an innovation that's been added to Lien Perfect is the ability to streamline the preparation of the filing by copying property details so that you're not having to manually enter every piece of information if it's already in the order. So some real smart tools there to assist in the preparation.

And then, finally, CSC has connections to more than 1,500 counties for eRecording. This is direct connections with those jurisdictions. We're not outsourcing to another party. And that means your filing is going to be filed more quickly and accurately and to secure your security position in that asset.

The last area I'll cover here before the demo is how filings can be created in Lien Perfect. I talked about one method a minute ago. But we'll start with manual data entry. That means manually entering the data, but using our filing wizard for an efficient and user-friendly experience with a split screen and custom settings to streamline that process for your users.

We also have a bulk import process I mentioned. So if you purchase a portfolio of loans and want to file UCCs in a more efficient manner, you can just upload all of that data, and it will create draft filings that can be reviewed and submitted for recording.

And then we also offer and support API integration. That is a process where you can transmit filing data in real time to Lien Perfect to prepare draft filings that are ready for review and submission.

So some clients might use all three of these methods and do a certain amount of work through that bulk import process and then complete those filings on a manual basis as needed, or even an API integration and a combination of the manual and bulk import too.

To recap, we'll just start. We covered what is a fixture filing and then the three methods that can be used to perfect security interest for fixtures at the state level, at the SOS or equivalent, or fixture filings recorded in real property records, or a mortgage or deed recorded in county property records. We also covered the basic information that was required for fixture filings and how the UCCs can be prepared in Lien Perfect.

Julia also covered and showed you the tools to manage a UCC portfolio, being allowed to prepare continuations, amendments, or terminations from the original filing, as well as doing things in bulk if that's part of your process.