Financing statements: residential real property.

Plain English Breakdown

The official source material does not provide details about enforcement mechanisms or specific penalties for violations.

Rules about Financing Statements for Homes

The bill stops people from filing financing statements that try to create or perfect security interests in owner-occupied homes and makes violators liable to the home's owner.

What This Bill Does

• Prohibits the filing of a financing statement against an owner-occupied residential property if it tries to create, perfect, or encumber ownership rights of the property.
• Makes people who knowingly file such statements in violation of this rule responsible and liable to the homeowner.

Who It Names or Affects

• Homeowners with owner-occupied residential real property
• People or entities trying to file financing statements against homes

Terms To Know

Financing Statement

A legal document used in secured transactions to inform creditors about a security interest in personal or real property.

Owner-occupied Residential Real Property

A house or other residential building that is owned and primarily lived in by the owner.

Limits and Unknowns

• The bill does not specify what happens if someone accidentally files a prohibited financing statement.
• It only applies to homes that are owner-occupied, not commercial properties.
• There's no information on how this will be enforced or penalties for violations.

Official Summary Text

SB 1320, as amended, Archuleta.
Bank deposits and collections.
Financing statements: residential real property.
The Uniform Commercial Code-Secured Transactions (UCC) generally regulates the perfection of certain security interests, including a financing statement filed as a fixture filing.
This bill would prohibit the filing of a financing statement against owner-occupied residential real property in a manner that purports to create or otherwise perfect a security interest in, or otherwise encumber, title to that owner-occupied residential real property and would make a person who knowingly files, or causes to be filed, a financing statement in violation of the bill liable to the owner of the owner-occupied residential real property identified in the financing
statement, as specified.
Existing law requires a collecting bank, as defined, to exercise ordinary care when performing specific duties in a commercial banking transaction, and limits the liability of a collecting bank for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in the possession of others or in transit, as specified.
This bill would make a nonsubstantive change to this provision.

Current Bill Text

Download Bill PDF