Personal Property Security Act Notes

What is this for?

This is an attempt on the State’s part to ​promote economic activity by increasing access
to least cost credi​t, particularly for micro, small, and medium enterprises. This is done by
establishing a modern, legal framework for securing obligations with personal property.

What is its scope?

All transactions in any form that secure an obligation with personal property ​movable
collateral, whether it is tangible or an intangible asset.

Chap 2

Creation of Security Interest

● Created by a security agreement

● The ​security agreement is a written contract signed by the parties, it establishes
the intent of the parties to create a security interest

What does a security interest include?

● The identifiable / traceable proceeds

● If commingled with other funds or money, these are ​included if they remain
traceable​. Also it only includes ​amount of proceeds before they commingling​.

Note: A security interest shall continue even if a sale, lease, license, exchange or other
disposition happens. Unless otherwise provided for by law.

Chap 3

Perfection of Security Interest

● Perfected when it has been ​created​ and the ​secured creditor has taken one of
the actions in accordance with section 12​:

○ Registration of notice with a registry

○ Possession of collateral by the secured creditor
○ Control of investment property and deposit account
 Perfection by Control
● Creation of the security interest in favor of the deposit-taking entity
● Conclusion of a control agreement

Chap 4

Priority for Perfection

● According to time of registration

Chap 5

Registration

● Established and administered by the LRA

● Provides electronic means for registration and searching of notices

Public Record

● Information @ registered notice shall be considered public record

● Electronic records will also be official

Sufficiency of Notice

● It identifies the grantor by an identification #

● It identifies the secured creditor or their agent by name
● It provides an address for the grantor and secured creditor / agent
● It describes the collateral
● The prescribed fee has been tendered

Note:​ If the registry rejects to register a notice, it should communicate this and the
reason why to the person who submitted the notice.

Effectivity of Notice

● It is effective ​from the time it is discoverable on the records of the registry

● It is effective for the ​duration of the term indicated in the notice
● If it complies with the requirements @ sufficiency, it shall be effective UNLESS it
is seriously misleading

When Can a Notice be Amended?

 ● By the registration of an amended notice that identifies the initial notice by
registration number, provides new info
● By an amended notice that adds collateral
● By an amended notice that adds a grantor
● “ adds a collateral and grantor

When Can a Notice be Terminated?

● Identifies initial notice by registration #

● Identifies secured creditors who authorizes the registration of the termination
notice

Registry Duties
● Assign unique regis number
● Create a record that bears the number assigned to the initial notice
● Maintain the record for public inspection

Chap 6

Creditor’s Rights

● Right to redeem
● Take possession of the collateral if it doesn’t disturb the peace
● Expedited hearing (if it disturbs the peace) granting the creditor possession of the
collateral