CO Code § 4-9-502 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 9 - Secured Transactions|Part 5 - Filing|§ 4-9-502. Contents of Financing Statement - Record of Mortgage as Financing Statement - Time of Filing Financing Statement

  Subject to subsection (b) of this section, a financing statement is sufficient only if it:   Provides the name of the debtor;    Provides the name of the secured party or a representative of the secured party; and    Indicates the collateral covered by the financing statement.       Except as otherwise provided in section 4-9-501 (b), to be sufficient, a financing statement that covers as-extracted collateral or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy subsection (a) of this section and also:   Indicate that it covers this type of collateral;    Indicate that it is to be filed for record in the real property records;    Provide a description of the real property to which the collateral is related sufficient to give constructive notice of a mortgage under the law of this state if the description were contained in a record of the mortgage of the real property; and    If the debtor does not have an interest of record in the real property, provide the name of a record owner.       A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if:   The record indicates the goods or accounts that it covers;    The goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut;    The record satisfies the requirements for a financing statement in this section other than an indication that it is to be filed in the real property records; and    The record is duly recorded.       A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.     History. Source: L. 2001: Entire article R&RE, p. 1379, § 1, effective July 1.    Editor's note:   This section is similar to former § 4-9-402 as it existed prior to 2001.   OFFICIAL COMMENT   1. Source. Former Section 9-402(1), (5), (6).   2. “Notice Filing.” This section adopts the system of “notice filing.” What is required to be filed is not, as under pre-UCC chattel mortgage and conditional sales acts, the security agreement itself, but only a simple record providing a limited amount of information (financing statement). The financing statement may be filed before the security interest attaches or thereafter. See subsection (d). See also Section 9-308(a) (contemplating situations in which a financing statement is filed before a security interest attaches).   The notice itself indicates merely that a person may have a security interest in the collateral indicated. Further inquiry from the parties concerned will be necessary to disclose the complete state of affairs. Section 9-210 provides a statutory procedure under which the secured party, at the debtor's request, may be required to make disclosure. However, in many cases, information may be forthcoming without the need to resort to the formalities of that section.   Notice filing has proved to be of great use in financing transactions involving inventory, accounts, and chattel paper, because it obviates the necessity of refiling on each of a series of transactions in a continuing arrangement under which the collateral changes from day to day. However, even in the case of filings that do not necessarily involve a series of transactions (e.g., a loan secured by a single item of equipment), a financing statement is effective to encompass transactions under a security agreement not in existence and not contemplated at the time the notice was filed, if the indication of collateral in the financing statement is sufficient to cover the collateral concerned. Similarly, a financing statement is effective to cover after-acquired property of the type indicated and to perfect with respect to future advances under security agreements, regardless of whether after-acquired property or future advances are mentioned in the financing statement and even if not in the contemplation of the parties at the time the financing statement was authorized to be filed.   3. Debtor's Signature; Required Authorization. Subsection (a) sets forth the simple formal requirements for an effective financing statement. These requirements are: (1) the debtor's name; (2) the name of a secured party or representative of the secured party; and (3) an indication of the collateral.   Whereas former Section 9-402(1) required the debtor's signature to appear on a financing statement, this Article contains no signature requirement. The elimination of the signature requirement facilitates paperless filing. (However, as PEB Commentary No. 15 indicates, a paperless financing statement was sufficient under former Article 9.) Elimination of the signature requirement also makes the exceptions provided by former Section 9-402(2) unnecessary.   The fact that this Article does not require that an authenticating symbol be contained in the public record does not mean that all filings are authorized. Rather, Section 9-509(a) entitles a person to file an initial financing statement, an amendment that adds collateral, or an amendment that adds a debtor only if the debtor authorizes the filing, and Section 9-509(d) entitles a person other than the debtor to file a termination statement only if the secured party of record authorizes the filing. Of course, a filing has legal effect only to the extent it is authorized. See Section 9-510.   Law other than this Article, including the law with respect to ratification of past acts, generally determines whether a person has the requisite authority to file a record under this Article. See Sections 1-103 and 9-509, Comment 3. However, under Section 9-509(b), the debtor's authentication of (or becoming bound by) a security agreement ipso facto constitutes the debtor's authorization of the filing of a financing statement covering the collateral described in the security agreement. The secured party need not obtain a separate authorization.   Section 9-625 provides a remedy for unauthorized filings. Making an unauthorized filing also may give rise to civil or criminal liability under other law. In addition, this Article contains provisions that assist in the discovery of unauthorized filings and the amelioration of their practical effect. For example, Section 9-518 provides a procedure whereby a person may add to the public record a statement to the effect that a financing statement indexed under the person's name was wrongfully filed, and Section 9-509(d) entitles any person to file a termination statement if the secured party of record fails to comply with its obligation to file or send one to the debtor, the debtor authorizes the filing, and the termination statement so indicates. However, the filing office is neither obligated nor permitted to inquire into issues of authorization. See Section 9-520(a).   4. Certain Other Requirements. Subsection (a) deletes other provisions of former Section 9-402(1) because they seems unwise (real-property description for financing statements covering crops), unnecessary (adequacy of copies of financing statements), or both (copy of security agreement as financing statement). In addition, the filing office must reject a financing statement lacking certain other information formerly required as a condition of perfection (e.g., an address for the debtor or secured party). See Sections 9-516(b), 9-520(a). However, if the filing office accepts the record, it is effective nevertheless. See Section 9-520(c).   5. Real-Property-Related Filings. Subsection (b) contains the requirements for financing statements filed as fixture filings and financing statements covering timber to be cut or minerals and minerals-related accounts constituting as-extracted collateral. A description of the related real property must be sufficient to reasonably identify it. See Section 9-108. This formulation rejects the view that the real property description must be by metes and bounds, or otherwise conforming to traditional real-property practice in conveyancing, but, of course, the incorporation of such a description by reference to the recording data of a deed, mortgage or other instrument containing the description should suffice under the most stringent standards. The proper test is that a description of real property must be sufficient so that the financing statement will fit into the real-property search system and be found by a real-property searcher. Under the optional language in subsection (b)(3), the test of adequacy of the description is whether it would be adequate in a record of a mortgage of the real property. As suggested in the Legislative Note, more detail may be required if there is a tract indexing system or a land registration system.   If the debtor does not have an interest of record in the real property, a real-property- related financing statement must show the name of a record owner, and Section 9-519(d) requires the financing statement to be indexed in the name of that owner. This requirement also enables financing statements covering as-extracted collateral or timber to be cut and financing statements filed as fixture filings to fit into the real-property search system.   6. Record of Mortgage Effective as Financing Statement. Subsection (c) explains when a record of a mortgage is effective as a financing statement filed as a fixture filing or to cover timber to be cut or as-extracted collateral. Use of the term “record of a mortgage” recognizes that in some systems the record actually filed is not the record pursuant to which a mortgage is created. Moreover, “mortgage” is defined in Section 9-102 as an “interest in real property,” not as the record that creates or evidences the mortgage or the record that is filed in the public recording systems. A record creating a mortgage may also create a security interest with respect to fixtures (or other goods) in conformity with this Article. A single agreement creating a mortgage on real property and a security interest in chattels is common and useful for certain purposes. Under subsection (c), the recording of the record evidencing a mortgage (if it satisfies the requirements for a financing statement) constitutes the filing of a financing statement as to the fixtures (but not, of course, as to other goods). Section 9-515(g) makes the usual five-year maximum life for financing statements inapplicable to mortgages that operate as fixture filings under Section 9-502(c). Such mortgages are effective for the duration of the real-property recording.   Of course, if a combined mortgage covers chattels that are not fixtures, a regular financing statement filing is necessary with respect to the chattels, and subsection (c) is inapplicable. Likewise, a financing statement filed as a “fixture filing”is not effective to perfect a security interest in personal property other than fixtures.   In some cases it may be difficult to determine whether goods are or will become fixtures. Nothing in this Part prohibits the filing of a “precautionary” fixture filing, which would provide protection in the event goods are determined to be fixtures. The fact of filing should not be a factor in the determining whether goods are fixtures. Cf. Section 9-505(b).   ANNOTATION   I.GENERAL CONSIDERATION.   Law reviews. For note, “Filing Under the Uniform Commercial Code Act 9”, see 38 U. Colo. L. Rev. 598 . For article, “Secured Transactions — Part I: Attachment, Perfection and Priorities”, see 11 Colo. Law. 2939 (1982). For article, “Commercial and Corporate Law”, which discusses Tenth Circuit decisions dealing with description of collateral in financing statements, see 65 Den. U. L. Rev. 469 (1988).   Annotator's note. Since § 4-9-502 is similar to § 4-9-402 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.   A financing statement does not suffice as a security agreement. John Boyle & Co. v. Colo. Patio & Awning Co., 654 P.2d 335 (Colo. App. 1982).   Financing statement was “signed by the debtor” where purchase agreement signed by purchaser allowed the vendor to sign the financing statement as an agent for the purchaser. NCR Corp. v. Robert A. McNeil Corp., 746 P.2d 1361 (Colo. App. 1987).   Applied in Heinrichsdorff v. Raat, 655 P.2d 860 (Colo. App. 1982).   II.IDENTIFICATION OF SECURED PARTY.   The amendment adopted by the general assembly dispensing with the need of manual signatures should be given effect retroactively because (a) it is procedural and (b) it is curative in nature. In re Colo. Mercantile Co., 299 F. Supp. 55 (D. Colo. 1969 ).   Perfect accuracy in identification of the secured party on a financing statement is not necessary as long as the statement provides sufficient additional information to enable a prudent examiner to ascertain exact state of affairs through further inquiry. In re Colo. Mercantile Co., 299 F. Supp. 55 (D. Colo. 1969 ).   A financing statement was not rendered invalid by fact that the financing statement erroneously identified the secured party as “O. M. Scott Credit Corporation” instead of O. M. Scott & Sons Co., since the former corporation was a wholly owned subsidiary of the latter and was so closely related and intertwined with it in business dealings as to be regarded as one with it and since no searching creditor could be seriously misled by the identification of the “O. M. Scott Credit Corporation” as the secured party. In re Colo. Mercantile Co., 299 F. Supp. 55 (D. Colo. 1969 ).   Invalidating a security interest in the absence of evidence that any creditor was actually so misled would frustrate the liberal intent of the commercial code and would unnecessarily provide a trustee in bankruptcy with a windfall estate at the expense of one creditor. In re Colo. Mercantile Co., 299 F. Supp. 55 (D. Colo. 1969 ).   III.DESCRIPTION OF COLLATERAL.   Law reviews. For comment on In re Lehner appearing below, see 48 Den. L.J. 146 (1971).   The sufficiency of the description in a financing statement is to be determined by § 4-9-402(1) . In re Lehner, 303 F. Supp. 317 (D. Colo. 1969 ), aff'd per curiam and reh'g denied, 427 F.2d 357 (10th Cir. 1970).   The filing of a financing statement perfects the security interest only if the statement substantially complies with the requirements of § 4-9-402(1) . In re Lehner, 303 F. Supp. 317 (D. Colo. 1969 ), aff'd per curiam and reh'g denied, 427 F.2d 357 (10th Cir. 1970).   Collateral need not be described with utmost particularity. Mtn. Credit v. Michiana Lumber & Supply, Inc., 31 Colo. App. 112, 498 P.2d 967 (1972).   The filing need only put other creditors on notice of a possible security interest in the collateral in question, and it is sufficient if the facts of a case show that a third party, assisted by external evidence, could identify the object as being covered by the agreement. Mtn. Credit v. Michiana Lumber & Supply, Inc., 31 Colo. App. 112, 498 P.2d 967 (1972).   Since the “notice filing” system adopted by the U.C.C. requires that a secured party provide in public record enough information to alert interested parties that there may be a prior security interest. In re Colo. Mercantile Co., 299 F. Supp. 55 (D. Colo. 1969 ).   The use of the term “consumer goods” fails to satisfy this section, as it is too broad, general, and meaningless to fulfill the demand of § 4-9-402(1) that the financing statement at least reveal “the types”. The description of collateral as simply “consumer goods” is insufficient in that it neither specifies the types nor the items, and where the collateral is used by the owner it would not seem to be an undue hardship to require the lender to designate in more meaningful terms. In re Lehner, 303 F. Supp. 317 (D. Colo. 1969 ), aff'd per curiam and reh'g denied, 427 F.2d 357 (10th Cir. 1970).   Log-loader sufficiently described. The use of the words “logging equipment and machinery used in logging operations” on one financing statement and the words “new and used equipment for logging and general construction” on another statement sufficiently describes the property so as to create a valid lien on a log-loader. Mtn. Credit v. Michiana Lumber & Supply, Inc., 31 Colo. App. 112, 498 P.2d 967 (1972).   Sufficient description of mobile home. Use of the words “floor plans” without other descriptive phrases is not sufficiently specific to describe mobile homes as collateral; however, use of those words in the context “Floor plans of Modular Homes being constructed by Ft. Lupton Builders, 1500 Factory Circle, Ft. Lupton, Colorado 80621” is sufficient notice of a possible security interest in a type of collateral, mobile home units being constructed by Ft. Lupton Builders. Platte Valley Bank v. B & J Constr., Inc., 44 Colo. App. 21, 606 P.2d 455 (1980).