2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 55A - Secured Transactions (§§ 2211 — 2409) › Subchapter III - Perfection and Priority (§§ 2251 — 2292) › § 2284 - Priority of security interests in fixtures and crops

(a) Security interest in fixtures under this chapter.— A security interest under this chapter may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this chapter in ordinary building materials incorporated into an improvement on land.
(b) Security interest in fixtures under real-property law.— This chapter does not prevent creation of an encumbrance upon fixtures under the Mortgage and Property Registry Act.
(c) General rule: subordination of security interest in fixtures.— In cases not governed by subsections (d)–(h) of this section, a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor.
(d) Fixtures purchase-money priority.— Except as otherwise provided in subsection (h) of this section, a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest recorded or filed for recordation or is in possession of the real property and:
(1) The security interest is a purchase-money security interest;
(2) the interest of the encumbrancer or owner arises before the goods become fixtures, and
(3) the security interest is perfected by a fixture filing before the goods become fixtures or within twenty (20) days thereafter.
(e) Priority of security interest in fixtures over interests in real property.— A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if:
(1) The debtor has an interest recorded or filed for recordation in the real property or is in possession of the real property and the security interest:
(A) Is perfected by a fixture filing before the interest of the encumbrancer or owner is of record, and
(B) has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;
(2) before the goods become fixtures, the security interest is perfected by any method permitted by this chapter and the fixtures are readily removable:
(A) Factory or office machines;
(B) equipment that is not primarily used or leased for use in the operation of the real property, or
(C) replacements of domestic appliances that are consumer goods;
(3) the conflicting interest is a lien on the real property obtained by legal proceedings after the security interest was perfected by any method permitted by this chapter; or
(4) the security interest is:
(A) Created in a manufactured home in a manufactured-home transaction, and
(B) perfected pursuant to a statute described in § 2261(a)(2) of this title.
(f) Priority based on consent, disclaimer, or right to remove.— A security interest in fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer or owner of the real property if:
(1) The encumbrancer or owner has, in an authenticated record, consented to the security interest or disclaimed an interest in the goods as fixtures, or
(2) the debtor has a right to remove the goods as against the encumbrancer or owner.
(g) Continuation of subsection (f)(2) of this section priority.— The priority of the security interest under subsection (f)(2) of this section continues for a reasonable time if the debtor's right to remove the goods as against the encumbrancer or owner terminates.
(h) Priority of construction mortgage.— A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the land. Except as otherwise provided in subsections (e) and (f) of this section, a security interest in fixtures is subordinate to a construction mortgage if a deed of mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction. A mortgage has this priority to the same extent as a construction mortgage to the extent that it is given to refinance a construction mortgage.
(i) Priority of security interest in crops.— A perfected security interest in crops growing on real property has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest recorded or filed for recordation in or is in possession of the real property.
(j) Subsection (i) prevails.— Subsection (i) of this section prevails over any inconsistent provisions under article 162 of the Mortgage and Property Registry Act.
History —Sept. 19, 1996, No. 241, added as § 9-334 on Jan. 17, 2012, No. 21, § 11, eff. 1 year after Jan. 17, 2012.