CO Code § 4-9-515 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 9 - Secured Transactions|Part 5 - Filing|§ 4-9-515. Duration and Effectiveness of Financing Statement - Effect of Lapsed Financing Statement

  Except as otherwise provided in subsections (b), (e), (f), and (g) of this section and section 4-9-528, a filed financing statement is effective for a period of five years after the date of filing.    Except as otherwise provided in subsections (e), (f), and (g) of this section, an initial financing statement filed in connection with a manufactured-home transaction is effective for a period of thirty years after the date of filing if it indicates that it is filed in connection with a manufactured-home transaction.    The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the lapse a continuation statement is filed pursuant to subsection (d) of this section. Upon lapse, a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes unperfected, unless the security interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value.    A continuation statement may be filed only within six months before the expiration of the five-year period specified in subsection (a) of this section, the thirty-year period specified in subsection (b) of this section, or the five-year period specified in section 4-9-528 (a)(1), whichever is applicable.    Except as otherwise provided in section 4-9-510, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of five years commencing on the day on which the financing statement would have become ineffective in the absence of the filing. Upon the expiration of the five-year period, the financing statement lapses in the same manner as provided in subsection (c) of this section, unless, before the lapse, another continuation statement is filed pursuant to subsection (d) of this section. Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.    If a debtor is a transmitting utility and a filed initial financing statement so indicates, the financing statement is effective until a termination statement is filed.    A record of a mortgage that is effective as a financing statement filed as a fixture filing under section 4-9-502 (c) remains effective as a financing statement filed as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property.     History. Source: L. 2001: Entire article R&RE, p. 1386, § 1, effective July 1. L. 2012: (f) amended, (HB 12-1262), ch. 170, p. 602, § 12, effective July 1, 2013.    Editor's note:    This section is similar to former § 4-9-403 as it existed prior to 2001.    Colorado legislative change: Colorado added the reference to section 4-9-528 in subsection (a) and the phrase "or the five-year period specified in section 4-9-528 (a)(1)" in subsection (d).     OFFICIAL COMMENT   1. Source. Former Section 9-403(2), (3), (6).   2. Period of Financing Statement's Effectiveness. Subsection (a) states the general rule: a financing statement is effective for a five-year period unless its effectiveness is continued under this section or terminated under Section 9-513. Subsection (b) provides that if the financing statement relates to a public-finance transaction or a manufactured-home transaction and so indicates, the financing statement is effective for 30 years. These financings typically extend well beyond the standard, five-year period. Under subsection (f), a financing statement filed against a transmitting utility remains effective indefinitely, until a termination statement is filed. Likewise, under subsection (g), a mortgage effective as a fixture filing remains effective until its effectiveness terminates under real-property law.   3. Lapse. When the period of effectiveness under subsection (a) or (b) expires, the effectiveness of the financing statement lapses. The last sentence of subsection (c) addresses the effect of lapse. The deemed retroactive unperfection applies only with respect to purchasers for value; unlike former Section 9-403(2), it does not apply with respect to lien creditors.   Example 1: SP-1 and SP-2 both hold security interests in the same collateral. Both security interests are perfected by filing. SP-1 filed first and has priority under Section 9-322(a)(1). The effectiveness of SP-1's filing lapses. As long as SP-2's security interest remains perfected thereafter, SP-2 is entitled to priority over SP-1's security interest, which is deemed never to have been perfected as against a purchaser for value (SP-2). See Section 9-322(a)(2).   Example 2: SP holds a security interest perfected by filing. On July 1, LC acquires a judicial lien on the collateral. Two weeks later, the effectiveness of the financing statement lapses. Although the security interest becomes unperfected upon lapse, it was perfected when LC acquired its lien. Accordingly, notwithstanding the lapse, the perfected security interest has priority over the rights of LC, who is not a purchaser. See Section 9-317(a)(2).   4. Effect of Debtor's Bankruptcy. Under former Section 9-403(2), lapse was tolled if the debtor entered bankruptcy or another insolvency proceeding. Nevertheless, being unaware that insolvency proceedings had been commenced, filing offices routinely removed records from the files as if lapse had not been tolled. Subsection (c) deletes the former tolling provision and thereby imposes a new burden on the secured party: to be sure that a financing statement does not lapse during the debtor's bankruptcy. The secured party can prevent lapse by filing a continuation statement, even without first obtaining relief from the automatic stay. See Bankruptcy Code Section 362(b)(3). Of course, if the debtor enters bankruptcy before lapse, the provisions of this Article with respect to lapse would be of no effect to the extent that federal bankruptcy law dictates a contrary result (e.g., to the extent that the Bankruptcy Code determines rights as of the date of the filing of the bankruptcy petition).   5. Continuation Statements. Subsection (d) explains when a continuation statement may be filed. A continuation statement filed at a time other than that prescribed by subsection (d) is ineffective, see Section 9-510(c), and the filing office may not accept it. See Sections 9-520(a), 9-516(b). Subsection (e) specifies the effect of a continuation statement and provides for successive continuation statements.   ANNOTATION   Law reviews. For article, “Commercial Law”, see 56 Den. L.J. 409 . For article, “Colorado Secretary of State Uniform Commercial Code Procedures”, see 11 Colo. Law. 1542 (1982). For article, “Secured Transactions — Part I: Attachment, Perfection and Priorities”, see 11 Colo. Law. 2939 (1982).   Annotator's note. Since § 4-9-515 is similar to § 4-9-403 as it existed prior to the 2001 repeal and reenactment of this article, relevant cases construing that provision have been included in the annotations to this section.   For legislative intent, see In re Vodco Volume Dev. Co., 567 F.2d 967 (10th Cir. 1977), appeal dismissed sub nom. Appleman v. Furety, 439 U.S. 806, 99 S. Ct. 62, 58 L. Ed. 2d 98 (1978) (decided prior to 1977 amendment).   This section may not be employed to destroy prior perfected security interests in favor of a subsequent holder of a security interest. Western Nat'l Bank v. ABC Drilling Co., 42 Colo. App. 407, 599 P.2d 942 (1979).   For effect of filing continuation statement after properly filed financing statement had lapsed, prior to 1977 amendment, see In re Vodco Volume Dev. Co., 567 F.2d 967 (10th Cir. 1977), appeal dismissed sub nom. Appleman v. Furety, 439 U.S. 806, 99 S. Ct. 62, 58 L. Ed. 2d 98 (1978) (decided prior to 1977 amendment).   Failure to file a continuation statement within 60 days of the termination of a debtor's bankruptcy proceeding does not cause creditor's security interest to lapse when creditor has filed a continuation statement during the bankruptcy proceedings. John Deere Co. v. Alamosa Nat. Bank, 786 P.2d 505 (Colo. App. 1989).