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2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-311 - Perfection of Security Interests in Property Subject to Certain Statutes, Regulations, and Treaties

(a)    Except as otherwise provided in subsection (d), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:
(1)    A statute, regulation, or treaty of the United States whose requirements for a security interest’s obtaining priority over the rights of a lien creditor with respect to the property preempt § 9–310(a);
(2)    Any statute of this State which provides for a security interest to be indicated on a certificate of title as a condition or result of perfection; or
(3)    A statute of another jurisdiction which provides for a security interest to be indicated on a certificate of title as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the property.
(b)    Compliance with the requirements of a statute, regulation, or treaty described in subsection (a) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this title, provided that the time for perfection will be governed by that statute, regulation, or treaty. Except as otherwise provided in subsection (d) and §§ 9–313 and 9–316(d) and (e) for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in subsection (a) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral.
(c)    Except as otherwise provided in subsection (d) and § 9–316(d) and (e), duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in subsection (a) are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this article.
(d)    During any period in which collateral subject to a statute specified in subsection (a)(2) is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-312 - Perfection of Security Interests in Chattel Paper, Deposit Accounts, Documents, Goods Covered by Documents, Instruments, Investment Property, Letter-of-Credit Rights, and Money; Perfection by Permissive Filing; Temporary Perfection Without Filing or Transfer of Possession

(a)    A security interest in chattel paper, negotiable documents, instruments, or investment property may be perfected by filing.
(b)    Except as otherwise provided in § 9-315(c) and (d) for proceeds:
(1)    A security interest in a deposit account may be perfected only by control under § 9-314;
(2)    Except as otherwise provided in § 9-308(d), a security interest in a letter-of-credit right may be perfected only by control under § 9-314; and
(3)    A security interest in money may be perfected only by the secured party’s taking possession under § 9-313.
(c)    While goods are in the possession of a bailee that has issued a negotiable document covering the goods:
(1)    A security interest in the goods may be perfected by perfecting a security interest in the document; and
(2)    A security interest perfected in the document has priority over any security interest that becomes perfected in the goods by another method during that time.
(d)    While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security interest in the goods may be perfected by:
(1)    Issuance of a document in the name of the secured party;
(2)    The bailee’s receipt of notification of the secured party’s interest; or
(3)    Filing as to the goods.
(e)    A security interest in certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession or control for a period of 20 days from the time it attaches to the extent that it arises for new value given under an authenticated security agreement.
(f)    A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a negotiable document for the goods, remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of:
(1)    Ultimate sale or exchange; or
(2)    Loading, unloading, storing, shipping, transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.
(g)    A perfected security interest in a certificated security or instrument remains perfected for 20 days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of:
(1)    Ultimate sale or exchange; or
(2)    Presentation, collection, enforcement, renewal, or registration of transfer.
(h)    After the 20-day period specified in subsection (e), subsection (f), or subsection (g) expires, perfection depends upon compliance with this title.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-314 - Perfection by Control

(a)    A security interest in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, or electronic documents may be perfected by control of the collateral under § 7-106, § 9-104, § 9-105, § 9-106, or § 9-107.
(b)    A security interest in deposit accounts, electronic chattel paper, letter-of-credit rights, or electronic documents is perfected by control under § 7-106, § 9-104, § 9-105, or § 9-107 when the secured party obtains control and remains perfected by control only while the secured party retains control.
(c)    A security interest in investment property is perfected by control under § 9-106 from the time the secured party obtains control and remains perfected by control until:
(1)    The secured party does not have control; and
(2)    One of the following occurs:
(A)    If the collateral is a certificated security, the debtor has or acquires possession of the security certificate;
(B)    If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; or
(C)    If the collateral is a security entitlement, the debtor is or becomes the entitlement holder.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-315 - Secured Party's Rights on Disposition of Collateral and in Proceeds

(a)    Except as otherwise provided in this title and in § 2-403(2) of this article:
(1)    A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and
(2)    A security interest attaches to any identifiable proceeds of collateral.
(b)    Proceeds that are commingled with other property are identifiable proceeds:
(1)    If the proceeds are goods, to the extent provided by § 9-336; and
(2)    If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this article with respect to commingled property of the type involved.
(c)    A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.
(d)    A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless:
(1)    The following conditions are satisfied:
(A)    A filed financing statement covers the original collateral;
(B)    The proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed; and
(C)    The proceeds are not acquired with cash proceeds;
(2)    The proceeds are identifiable cash proceeds; or
(3)    The security interest in the proceeds is perfected other than under subsection (c) when the security interest attaches to the proceeds or within 20 days thereafter.
(e)    If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under subsection (d)(1) becomes unperfected at the later of:
(1)    When the effectiveness of the filed financing statement lapses under § 9-515 or is terminated under § 9-513; or
(2)    The 21st day after the security interest attaches to the proceeds.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-317 - Interests That Take Priority Over or Take Free of Unperfected Security Interest or Agricultural Lien

(a)    A security interest or agricultural lien is subordinate to the rights of:
(1)    A person entitled to priority under § 9–322; and
(2)    Except as provided in subsection (e), a person that becomes a lien creditor before the earlier of the time:
(A)    The security interest or agricultural lien is perfected; or
(B)    One of the conditions specified in § 9–203(b)(3) is met and a financing statement covering the collateral is filed.
(b)    Except as otherwise provided in subsection (e), a buyer, other than a secured party, of tangible chattel paper, tangible documents, goods, instruments, or a certificated security takes free of a security interest or agricultural lien if the buyer gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.
(c)    Except as otherwise provided in subsection (e), a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.
(d)    A licensee of a general intangible or a buyer, other than a secured party, of collateral other than tangible chattel paper, tangible documents, goods, instruments, or a certificated security takes free of a security interest if the licensee or buyer gives value without knowledge of the security interest and before it is perfected.
(e)    Except as otherwise provided in §§ 9–320 and 9–321, if a person files a financing statement with respect to a purchase–money security interest before or within 20 days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien creditor which arise between the time the security interest attaches and the time of filing.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-318 - No Interest Retained in Right to Payment That Is Sold; Rights and Title of Seller of Account or Chattel Paper With Respect to Creditors and Purchasers

(a)    A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold.
(b)    For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper, while the buyer’s security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-319 - Rights and Title of Consignee With Respect to Creditors and Purchasers

(a)    Except as otherwise provided in subsection (b), for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer.
(b)    For purposes of determining the rights of a creditor of a consignee, law other than this title determines the rights and title of a consignee while goods are in the consignee’s possession if, under this subtitle, a perfected security interest held by the consignor would have priority over the rights of the creditor.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-320 - Buyer of Goods

(a)    Except as otherwise provided in subsection (e), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer’s seller, even if the security interest is perfected and the buyer knows of its existence.
(b)    Except as otherwise provided in subsection (e), a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys:
(1)    Without knowledge of the security interest;
(2)    For value;
(3)    Primarily for the buyer’s personal, family, or household purposes; and
(4)    Before the filing of a financing statement covering the goods.
(c)    To the extent that it affects the priority of a security interest over a buyer of goods under subsection (b), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by § 9-316(a) and (b).
(d)    A buyer in ordinary course of business buying oil, gas, or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance.
(e)    Subsections (a) and (b) do not affect a security interest in goods in the possession of the secured party under § 9-313.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-321 - Licensee of General Intangible and Lessee of Goods in Ordinary Course of Business

(a)    In this section, “licensee in ordinary course of business” means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor’s own usual or customary practices.
(b)    A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.
(c)    A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor, even if the security interest is perfected and the lessee knows of its existence.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-323 - Future Advances

(a)    Except as otherwise provided in subsection (b), for purposes of determining the priority of a perfected security interest under § 9-322(a)(1), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:
(1)    Is made while the security interest is perfected only:
(A)    Under § 9-309 when it attaches; or
(B)    Temporarily under § 9-312(e), (f), or (g); and
(2)    Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under § 9-309 or § 9-312(e), (f), or (g).
(b)    Subsection (a) does not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor.
(c)    Except as otherwise provided in subsection (d), a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of:
(1)    The time the secured party acquires knowledge of the buyer’s purchase; or
(2)    45 days after the purchase.
(d)    Subsection (c) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer’s purchase and before the expiration of the 45-day period.
(e)    Except as otherwise provided in subsection (f), a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of:
(1)    The time the secured party acquires knowledge of the lease; or
(2)    45 days after the lease contract becomes enforceable.
(f)    Subsection (e) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the 45-day period.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-325 - Priority of Security Interests in Transferred Collateral

(a)    Except as otherwise provided in subsection (b), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if:
(1)    The debtor acquired the collateral subject to the security interest created by the other person;
(2)    The security interest created by the other person was perfected when the debtor acquired the collateral; and
(3)    There is no period thereafter when the security interest is unperfected.
(b)    Subsection (a) subordinates a security interest only if the security interest:
(1)    Otherwise would have priority solely under § 9-322(a) or § 9-324; or
(2)    Arose solely under § 2-711(3) or § 2A-508(5) of this article.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-326 - Priority of Security Interests Created by New Debtor

(a)    Subject to subsection (b), a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement that would be ineffective to perfect the security interest but for the application of § 9–316(i)(1) or § 9–508 is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement.
(b)    The other provisions of this subtitle determine the priority among conflicting security interests in the same collateral perfected by filed financing statements described in subsection (a). However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor’s having become bound.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-327 - Priority of Security Interests in Deposit Account

The following rules govern priority among conflicting security interests in the same deposit account:
(1)    A security interest held by a secured party having control of the deposit account under § 9-104 has priority over a conflicting security interest held by a secured party that does not have control.
(2)    Except as otherwise provided in paragraphs (3) and (4), security interests perfected by control under § 9-314 rank according to priority in time of obtaining control.
(3)    Except as otherwise provided in paragraph (4), a security interest held by the bank with which the deposit account is maintained has priority over a conflicting security interest held by another secured party.
(4)    A security interest perfected by control under § 9-104(a)(3) has priority over a security interest held by the bank with which the deposit account is maintained.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-328 - Priority of Security Interests in Investment Property

The following rules govern priority among conflicting security interests in the same investment property:
(1)    A security interest held by a secured party having control of investment property under § 9-106 has priority over a security interest held by a secured party that does not have control of the investment property.
(2)    Except as otherwise provided in paragraphs (3) and (4), conflicting security interests held by secured parties each of which has control under § 9-106 rank according to priority in time of:
(A)    If the collateral is a security, obtaining control;
(B)    If the collateral is a security entitlement carried in a securities account and:
(i)    If the secured party obtained control under § 8-106(d)(1) of this article, the secured party’s becoming the person for which the securities account is maintained;
(ii)    If the secured party obtained control under § 8-106(d)(2) of this article, the securities intermediary’s agreement to comply with the secured party’s entitlement orders with respect to security entitlements carried or to be carried in the securities account; or
(iii)    If the secured party obtained control through another person under § 8-106(d)(3) of this article, the time on which priority would be based under this paragraph if the other person were the secured party; or
(C)    If the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in § 9-106(b)(2) with respect to commodity contracts carried or to be carried with the commodity intermediary.
(3)    A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.
(4)    A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.
(5)    A security interest in a certificated security in registered form which is perfected by taking delivery under § 9-313(a) and not by control under § 9-314 has priority over a conflicting security interest perfected by a method other than control.
(6)    Conflicting security interests created by a broker, securities intermediary, or commodity intermediary which are perfected without control under § 9-106 rank equally.
(7)    In all other cases, priority among conflicting security interests in investment property is governed by §§ 9-322 and 9-323.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-329 - Priority of Security Interests in Letter-of-Credit

The following rules govern priority among conflicting security interests in the same letter-of-credit right:
(1)    A security interest held by a secured party having control of the letter-of-credit right under § 9-107 has priority to the extent of its control over a conflicting security interest held by a secured party that does not have control.
(2)    Security interests perfected by control under § 9-314 rank according to priority in time of obtaining control.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-330 - Priority of Purchaser of Chattel Paper or Instrument

(a)    A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory subject to a security interest if:
(1)    In good faith and in the ordinary course of the purchaser’s business, the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under § 9-105; and
(2)    The chattel paper does not indicate that it has been assigned to an identified assignee other than the purchaser.
(b)    A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under § 9-105 in good faith, in the ordinary course of the purchaser’s business, and without knowledge that the purchase violates the rights of the secured party.
(c)    Except as otherwise provided in § 9-327, a purchaser having priority in chattel paper under subsection (a) or (b) also has priority in proceeds of the chattel paper to the extent that:
(1)    § 9-322 provides for priority in the proceeds; or
(2)    The proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods, even if the purchaser’s security interest in the proceeds is unperfected.
(d)    Except as otherwise provided in § 9-331(a), a purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.
(e)    For purposes of subsections (a) and (b), the holder of a purchase-money security interest in inventory gives new value for chattel paper constituting proceeds of the inventory.
(f)    For purposes of subsections (b) and (d), if chattel paper or an instrument indicates that it has been assigned to an identified secured party other than the purchaser, a purchaser of the chattel paper or instrument has knowledge that the purchase violates the rights of the secured party.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-331 - Priority of Rights of Purchasers of Instruments, Documents, and Securities Under Other Articles; Priority of Interests in Financial Assets and Security Entitlements Under Title 8

(a)    This title does not limit the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable document of title has been duly negotiated, or a protected purchaser of a security. These holders or purchasers take priority over an earlier security interest, even if perfected, to the extent provided in Titles 3, 7, and 8 of this article.
(b)    This title does not limit the rights of or impose liability on a person to the extent that the person is protected against the assertion of a claim under Title 8 of this article.
(c)    Filing under this title does not constitute notice of a claim or defense to the holders, or purchasers, or persons described in subsections (a) and (b).
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-332 - Transfer of Money; Transfer of Funds From Deposit Account

(a)    A transferee of money takes the money free of a security interest unless the transferee acts in collusion with the debtor in violating the rights of the secured party.
(b)    A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account unless the transferee acts in collusion with the debtor in violating the rights of the secured party.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-333 - Priority of Certain Liens Arising by Operation of Law

(a)    In this section, “possessory lien” means an interest, other than a security interest or an agricultural lien:
(1)    Which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person’s business;
(2)    Which is created by statute or rule of law in favor of the person; and
(3)    Whose effectiveness depends on the person’s possession of the goods.
(b)    A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute that expressly provides otherwise.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-335 - Accessions

(a)    A security interest may be created in an accession and continues in collateral that becomes an accession.
(b)    If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral.
(c)    Except as otherwise provided in subsection (d), the other provisions of this part determine the priority of a security interest in an accession.
(d)    A security interest in an accession is subordinate to a security interest in the whole which is perfected by compliance with the requirements of a certificate-of-title statute under § 9-311(b).
(e)    After default, subject to Subtitle 6, a secured party may remove an accession from other goods if the security interest in the accession has priority over the claims of every person having an interest in the whole.
(f)    A secured party that removes an accession from other goods under subsection (e) shall promptly reimburse any holder of a security interest or other lien on, or owner of the whole or of the other goods, other than the debtor, for the cost of repair of any physical injury to the whole or the other goods. The secured party need not reimburse the holder or owner for any diminution in value of the whole or the other goods caused by the absence of the accession removed or by any necessity for replacing it. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-336 - Commingled Goods

(a)    In this section, “commingled goods” means goods that are physically united with other goods in such a manner that their identity is lost in a product or mass.
(b)    A security interest does not exist in commingled goods as such. However, a security interest may attach to a product or mass that results when goods become commingled goods.
(c)    If collateral becomes commingled goods, a security interest attaches to the product or mass.
(d)    If a security interest in collateral is perfected before the collateral becomes commingled goods, the security interest that attaches to the product or mass under subsection (c) is perfected.
(e)    Except as otherwise provided in subsection (f), the other provisions of this part determine the priority of a security interest that attaches to the product or mass under subsection (c).
(f)    If more than one security interest attaches to the product or mass under subsection (c), the following rules determine priority:
(1)    A security interest that is perfected under subsection (d) has priority over a security interest that is unperfected at the time the collateral becomes commingled goods.
(2)    If more than one security interest is perfected under subsection (d), the security interests rank equally in proportion to the value of the collateral at the time it became commingled goods.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-337 - Priority of Security Interests in Goods Covered by Certificate of Title

If, while a security interest in goods is perfected by any method under the law of another jurisdiction, this State issues a certificate of title that does not show that the goods are subject to the security interest or contain a statement that they may be subject to security interests not shown on the certificate:
(1)    A buyer of the goods, other than a person in the business of selling goods of that kind, takes free of the security interest if the buyer gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest; and
(2)    The security interest is subordinate to a conflicting security interest in the goods that attaches, and is perfected under § 9-311(b), after issuance of the certificate and without the conflicting secured party’s knowledge of the security interest.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-338 - Priority of Security Interest or Agricultural Lien Perfected by Filed Financing Statement Providing Certain Incorrect Information

If a security interest or agricultural lien is perfected by a filed financing statement providing information described in § 9-516(b)(5) which is incorrect at the time the financing statement is filed:
(1)    The security interest or agricultural lien is subordinate to a conflicting perfected security interest in the collateral to the extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and
(2)    A purchaser, other than a secured party, of the collateral takes free of the security interest or agricultural lien to the extent that, in reasonable reliance upon the incorrect information, the purchaser gives value and, in the case of tangible chattel paper, tangible documents, goods, instruments, or a security certificate, receives delivery of the collateral.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-340 - Effectiveness of Right of Recoupment or Set-Off Against Deposit Account

(a)    Except as otherwise provided in subsection (c), a bank with which a deposit account is maintained may exercise any right of recoupment or set-off against a secured party that holds a security interest in the deposit account.
(b)    Except as otherwise provided in subsection (c), the application of this article to a security interest in a deposit account does not affect a right of recoupment or set-off of the secured party as to a deposit account maintained with the secured party.
(c)    The exercise by a bank of a set-off against a deposit account is ineffective against a secured party that holds a security interest in the deposit account which is perfected by control under § 9-104(a)(3), if the set-off is based on a claim against the debtor.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-341 - Bank's Rights and Duties With Respect to Deposit Account

Except as otherwise provided in § 9-340(c), and unless the bank otherwise agrees in an authenticated record, a bank’s rights and duties with respect to a deposit account maintained with the bank are not terminated, suspended, or modified by:
(1)    The creation, attachment, or perfection of a security interest in the deposit account;
(2)    The bank’s knowledge of the security interest; or
(3)    The bank’s receipt of instructions from the secured party.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 3 - Perfection and Priority › Section 9-342 - Bank's Right to Refuse to Enter Into or Disclose Existence of Control Agreement

This title does not require a bank to enter into an agreement of the kind described in § 9-104(a)(2), even if its customer so requests or directs. A bank that has entered into such an agreement is not required to confirm the existence of the agreement to another person unless requested to do so by its customer.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 4 - Rights of Third Parties › Section 9-401 - Alienability of Debtor's Rights

(a)    Except as otherwise provided in subsection (b) and §§ 9-406, 9-407, 9-408, and 9-409, whether a debtor’s rights in collateral may be voluntarily or involuntarily transferred is governed by law other than this title.
(b)    An agreement between the debtor and secured party which prohibits a transfer of the debtor’s rights in collateral or makes the transfer a default does not prevent the transfer from taking effect.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 4 - Rights of Third Parties › Section 9-402 - Secured Party Not Obligated on Contract of Debtor or in Tort

The existence of a security interest, agricultural lien, or authority given to a debtor to dispose of or use collateral, without more, does not subject a secured party to liability in contract or tort for the debtor’s acts or omissions.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 4 - Rights of Third Parties › Section 9-403 - Agreement Not to Assert Defenses Against Assignee

(a)    In this section, “value” has the meaning provided in § 3-303(a) of this article.
(b)    Except as otherwise provided in this section, an agreement between an account debtor and an assignor not to assert against an assignee any claim or defense that the account debtor may have against the assignor is enforceable by an assignee that takes an assignment:
(1)    For value;
(2)    In good faith;
(3)    Without notice of a claim of a property or possessory right to the property assigned; and
(4)    Without notice of a defense or claim in recoupment of the type that may be asserted against a person entitled to enforce a negotiable instrument under § 3-305(a) of this article.
(c)    Subsection (b) does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under § 3-305(b) of this article.
(d)    In a consumer transaction, if a record evidences the account debtor’s obligation, law other than this title requires that the record include a statement to the effect that the rights of an assignee are subject to claims or defenses that the account debtor could assert against the original obligee, and the record does not include such a statement:
(1)    The record has the same effect as if the record included such a statement; and
(2)    The account debtor may assert against an assignee those claims and defenses that would have been available if the record included such a statement.
(e)    This section is subject to law other than this title which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
(f)    Except as otherwise provided in subsection (d), this section does not displace law other than this title which gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 4 - Rights of Third Parties › Section 9-404 - Rights Acquired by Assignee; Claims and Defenses Against Assignee

(a)    Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subsections (b) through (e), the rights of an assignee are subject to:
(1)    All terms of the agreement between the account debtor and assignor and any defense or claim in recoupment arising from the transaction that gave rise to the contract; and
(2)    Any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives a notification of the assignment authenticated by the assignor or the assignee.
(b)    Subject to subsection (c) and except as otherwise provided in subsection (d), the claim of an account debtor against an assignor may be asserted against an assignee under subsection (a) only to reduce the amount the account debtor owes.
(c)    This section is subject to law other than this title which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
(d)    In a consumer transaction, if a record evidences the account debtor’s obligation, law other than this title requires that the record include a statement to the effect that the account debtor’s recovery against an assignee with respect to claims and defenses against the assignor may not exceed amounts paid by the account debtor under the record, and the record does not include such a statement, the extent to which a claim of an account debtor against the assignor may be asserted against an assignee is determined as if the record included such a statement.
(e)    This section does not apply to an assignment of a health-care-insurance receivable.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 4 - Rights of Third Parties › Section 9-405 - Modification of Assigned Contract

(a)    A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that the modification or substitution is a breach of contract by the assignor. This subsection is subject to subsections (b) through (d).
(b)    Subsection (a) applies to the extent that:
(1)    The right to payment or a part thereof under an assigned contract has not been fully earned by performance; or
(2)    The right to payment or a part thereof has been fully earned by performance and the account debtor has not received notification of the assignment under § 9-406(a).
(c)    This section is subject to law other than this title which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
(d)    This section does not apply to an assignment of a health-care-insurance receivable.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 4 - Rights of Third Parties › Section 9-407 - Restrictions on Creation or Enforcement of Security Interest in Leasehold Interest or in Lessor's Residual Interest

(a)    Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:
(1)    Prohibits, restricts, or requires the consent of a party to the lease to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, an interest of a party under the lease contract or in the lessor’s residual interest in the goods; or
(2)    Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease.
(b)    Except as otherwise provided in § 2A-303(7) of this article, a term described in subsection (a)(2) is effective to the extent that there is:
(1)    A transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term; or
(2)    A delegation of a material performance of either party to the lease contract in violation of the term.
(c)    The creation, attachment, perfection, or enforcement of a security interest in the lessor’s interest under the lease contract or the lessor’s residual interest in the goods is not a transfer that materially impairs the lessee’s prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of § 2A-303(4) of this article unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 4 - Rights of Third Parties › Section 9-409 - Restrictions on Assignment of Letter-of-Credit Rights Ineffective

(a)    A term in a letter of credit or a rule of law, statute, regulation, custom, or practice applicable to the letter of credit which prohibits, restricts, or requires the consent of an applicant, issuer, or nominated person to a beneficiary’s assignment of or creation of a security interest in a letter-of-credit right is ineffective to the extent that the term or rule of law, statute, regulation, custom, or practice:
(1)    Would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or
(2)    Provides that the assignment or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the letter-of-credit right.
(b)    To the extent that a term in a letter of credit is ineffective under subsection (a) but would be effective under law other than this title or a custom or practice applicable to the letter of credit, to the transfer of a right to draw or otherwise demand performance under the letter of credit, or to the assignment of a right to proceeds of the letter of credit, the creation, attachment, or perfection of a security interest in the letter-of-credit right:
(1)    Is not enforceable against the applicant, issuer, nominated person, or transferee beneficiary;
(2)    Imposes no duties or obligations on the applicant, issuer, nominated person, or transferee beneficiary; and
(3)    Does not require the applicant, issuer, nominated person, or transferee beneficiary to recognize the security interest, pay or render performance to the secured party, or accept payment or other performance from the secured party.
2023 Maryland Statutes › Commercial Law › Title 9 - Secured Transactions › Subtitle 5 - Filing › Section 9-501 - Filing Office

(a)    Except as otherwise provided in subsection (b), if the local law of this State governs perfection of a security interest or agricultural lien, the office in which to file a financing statement to perfect the security interest or agricultural lien is:
(1)    The office designated for the filing or recording of a record of a mortgage on the related real property, if:
(A)    The collateral is as–extracted collateral or timber to be cut; or
(B)    The financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures; or
(2)    The Maryland State Department of Assessments and Taxation (“Department”), in all other cases, including a case in which the collateral is goods that are or are to become fixtures and the financing statement is not filed as a fixture filing.
(b)    The office in which to file a financing statement to perfect a security interest in collateral, including fixtures, of a transmitting utility is the Department. The financing statement also constitutes a fixture filing as to the collateral indicated in the financing statement which is or is to become fixtures.
(c)    (1)    This subsection does not apply to a financing statement that is a mortgage or deed of trust.
(2)    If the Department or other office receives a financing statement under subsection (a) or (b) for filing and the secured party and the debtor identified on the financing statement are individuals, the Department or other office shall provide written notice of the filing of the financing statement to the debtor.
(3)    Subject to paragraph (4), the Department or other office required to provide written notice under paragraph (2) shall determine the form of the notice.
(4)    The written notice shall contain at least the following information:
(A)    The debtor’s name and address as shown on the financing statement;
(B)    The secured party’s name and address as shown on the financing statement; and
(C)    The remedies available to the debtor if the debtor believes that the financing statement is erroneously or fraudulently filed.