citation: COM § 9510

text:
(a) A filed record is effective only to the extent that it was filed by a person that may file it under Section 9509.

(b) A record authorized by one secured party of record does not affect the financing statement with respect to another secured party of record.

(c) A continuation statement that is not filed within the six-month period prescribed by subdivision (d) of Section 9515 is ineffective.

history: (History: Added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.)


kind: section

code: COM

citation: COM § 9511

text:
(a) A secured party of record with respect to a financing statement is a person whose name is provided as the name of the secured party or a representative of the secured party in an initial financing statement that has been filed. If an initial financing statement is filed under subdivision (a) of Section 9514, the assignee named in the initial financing statement is the secured party of record with respect to the financing statement.

(b) If an amendment of a financing statement which provides the name of a person as a secured party or a representative of a secured party is filed, the person named in the amendment is a secured party of record. If an amendment is filed under subdivision (b) of Section 9514, the assignee named in the amendment is a secured party of record.

(c) A person remains a secured party of record until the filing of an amendment of the financing statement which deletes the person.

division: 9. SECURED TRANSACTIONS

chapter: 5. Filing

path: 9. SECURED TRANSACTIONS > 5. Filing


citation: COM § 9512

text:
(a) Subject to Section 9509, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or, subject to subdivision (e), otherwise amend the information provided in, a financing statement by filing an amendment that does both of the following:

(1) Identifies, by its file number, the initial financing statement to which the amendment relates.

(2) If the amendment relates to an initial financing statement filed or recorded in a filing office described in paragraph (1) of subdivision (a) of Section 9501, provides the date that the initial financing statement was filed or recorded and the information specified in subdivision (b) of Section 9502.

(b) Except as otherwise provided in Section 9515, the filing of an amendment does not extend the period of effectiveness of the financing statement.

(c) A financing statement that is amended by an amendment that adds collateral is effective as to the added collateral only from the date of the filing of the amendment.

(d) A financing statement that is amended by an amendment that adds a debtor is effective as to the added debtor only from the date of the filing of the amendment.

(e) An amendment is ineffective to the extent that it does either of the following:

(1) It purports to delete all debtors and fails to provide the name of a debtor to be covered by the financing statement.

(2) It purports to delete all secured parties of record and fails to provide the name of a new secured party of record.


citation: COM § 9513

text:
(a) A secured party shall cause the secured party of record for a financing statement to file a termination statement for the financing statement if the financing statement covers consumer goods and either of the following conditions is satisfied:

(1) There is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value.

(2) The debtor did not authorize the filing of the initial financing statement.

(b) To comply with subdivision (a), a secured party shall cause the secured party of record to file the termination statement in accordance with either of the following rules:

(1) Within one month after there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value.

(2) If earlier, within 20 days after the secured party receives a signed demand from a debtor.

(c) In cases not governed by subdivision (a), within 20 days after a secured party receives a signed demand from a debtor, the secured party shall cause the secured party of record for a financing statement to send to the debtor a termination statement for the financing statement or file the termination statement in the filing office if any of the following conditions is satisfied:

(1) Except in the case of a financing statement covering accounts or chattel paper that has been sold or goods that are the subject of a consignment, there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value.

(2) The financing statement covers accounts or chattel paper that has been sold but as to which the account debtor or other person obligated has discharged its obligation.

(3) The financing statement covers goods that were the subject of a consignment to the debtor but are not in the debtor’s possession.

(4) The debtor did not authorize the filing of the initial financing statement.

(d) Except as otherwise provided in Section 9510, upon the filing of a termination statement with the filing office, the financing statement to which the termination statement relates ceases to be effective. Except as otherwise provided in Section 9510, for purposes of subdivision (g) of Section 9519, subdivision (a) of Section 9522, and subdivision (c) of Section 9523, the filing with the filing office of a termination statement relating to a financing statement that indicates that the debtor is a transmitting utility also causes the effectiveness of the financing statement to lapse.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 60. (SB 95) Effective January 1, 2024.)


citation: COM § 9514

text:
(a) Except as otherwise provided in subdivision (c), an initial financing statement may reflect an assignment of all of the secured party’s power to authorize an amendment to the financing statement by providing the name and mailing address of the assignee as the name and address of the secured party.

(b) Except as otherwise provided in subdivision (c), a secured party of record may assign all or part of its power to authorize an amendment to a financing statement by filing in the filing office an amendment of the financing statement which does all of the following:

(1) Identifies, by its file number, the initial financing statement to which it relates.

(2) Provides the name of the assignor.

(3) Provides the name and mailing address of the assignee.

(c) An assignment of record of a security interest in a fixture covered by a record of a mortgage which is effective as a financing statement filed as a fixture filing under subdivision (c) of Section 9502 may be made only by an assignment of record of the mortgage in the manner provided by law of this state other than the Uniform Commercial Code.


citation: COM § 9515

text:
(a) Except as otherwise provided in subdivisions (b), (e), (f), and (g), a filed financing statement is effective for a period of five years after the date of filing.

(b) Except as otherwise provided in subdivisions (e), (f), and (g), an initial financing statement filed in connection with a public finance transaction or manufactured home transaction is effective for a period of 30 years after the date of filing if it indicates that it is filed in connection with a public finance transaction or manufactured home transaction.

(c) 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 subdivision (d). 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.

(d) A continuation statement may be filed only within six months before the expiration of the five-year period specified in subdivision (a) or the 30-year period specified in subdivision (b), whichever is applicable.

(e) Except as otherwise provided in Section 9510, 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 subdivision (c), unless, before the lapse, another continuation statement is filed pursuant to subdivision (d). Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.

(f) 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.

(g) A record of a mortgage that is effective as a financing statement filed as a fixture filing under subdivision (c) of Section 9502 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: (History: Amended by Stats. 2013, Ch. 531, Sec. 18. (AB 502) Effective January 1, 2014. Operative July 1, 2014, by Sec. 28 of Ch. 531.)


citation: COM § 9516

text:
(a) Except as otherwise provided in subdivision (b), communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing.

(b) Filing does not occur with respect to a record that a filing office refuses to accept because of any of the following:

(1) The record is not communicated by a method or medium of communication authorized by the filing office.

(2) An amount equal to or greater than the applicable filing fee is not tendered.

(3) The filing office is unable to index the record because of any of the following:

(A) In the case of an initial financing statement, the record does not provide a name for the debtor.

(B) In the case of an amendment or information statement, either of the following applies with respect to the record:

(i) It does not identify the initial financing statement as required by Section 9512 or 9518, as applicable.

(ii) It identifies an initial financing statement whose effectiveness has lapsed under Section 9515.

(C) In the case of an initial financing statement that provides the name of a debtor identified as an individual or an amendment that provides a name of a debtor identified as an individual which was not previously provided in the financing statement to which the record relates, the record does not identify the debtor’s surname.

(D) In the case of a record filed or recorded in the filing office described in paragraph (1) of subdivision (a) of Section 9501, the record does not provide a sufficient description of the real property to which it relates.

(4) In the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record.

(5) In the case of an initial financing statement or an amendment that provides a name of a debtor which was not previously provided in the financing statement to which the amendment relates, the record does not do any of the following:

(A) Provide a mailing address for the debtor.

(B) Indicate whether the name provided as the name of the debtor is the name of an individual or an organization.

(6) In the case of an assignment reflected in an initial financing statement under subdivision (a) of Section 9514 or an amendment filed under subdivision (b) of Section 9514, the record does not provide a name and mailing address for the assignee.

(7) In the case of a continuation statement, the record is not filed within the six-month period prescribed by subdivision (d) of Section 9515.

(c) For purposes of subdivision (b), both of the following rules apply:

(1) A record does not provide information if the filing office is unable to read or decipher the information.

(2) A record that does not indicate that it is an amendment or identify an initial financing statement to which it relates, as required by Section 9512, 9514, or 9518, is an initial financing statement.

(d) A record that is communicated to the filing office with tender of the filing fee, but which the filing office refuses to accept for a reason other than one set forth in subdivision (b), is effective as a filed record except as against a purchaser of the collateral which gives value in reasonable reliance upon the absence of the record from the files.

history: (History: Amended by Stats. 2013, Ch. 531, Sec. 19. (AB 502) Effective January 1, 2014. Operative July 1, 2014, by Sec. 28 of Ch. 531.)


citation: COM § 9517

text: The failure of the filing office to index a record correctly does not affect the effectiveness of the filed record.


citation: COM § 9518

text:
(a) A person may file in the filing office an information statement with respect to a record indexed there under the person’s name if the person believes that the record is inaccurate or was wrongfully filed.

(b) An information statement filed under subdivision (a) shall do all of the following:

(1) Identify the record to which it relates by both of the following:

(A) The file number assigned to the initial financing statement to which the record relates.

(B) If the information statement relates to a record filed or recorded in a filing office described in paragraph (1) of subdivision (a) of Section 9501, the date that the initial financing statement was filed or recorded, and the information specified in subdivision (b) of Section 9502.

(2) Indicate that it is an information statement.

(3) Provide the basis for the person’s belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person’s belief that the record was wrongfully filed.

(c) A person may file in the filing office an information statement with respect to a record filed there if the person is a secured party of record with respect to the financing statement to which the record relates and believes that the person that filed the record was not entitled to do so under subdivision (d) of Section 9509.

(d) An information statement filed under subdivision (c) shall do all of the following:

(1) Identify the record to which it relates by both of the following:

(A) The file number assigned to the initial financing statement to which the record relates.

(B) If the information statement relates to a record filed or recorded in a filing office described in paragraph (1) of subdivision (a) of Section 9501, the date that the initial financing statement was filed or recorded and the information specified in subdivision (b) of Section 9502.

(2) Indicate that it is an information statement.

(3) Provide the basis for the person’s belief that the person that filed the record was not entitled to do so under subdivision (d) of Section 9509.

(e) The filing of an information statement does not affect the effectiveness of an initial financing statement or other filed record.

history: (History: Amended by Stats. 2013, Ch. 531, Sec. 20. (AB 502) Effective January 1, 2014. Operative July 1, 2014, by Sec. 28 of Ch. 531.)


citation: COM § 9519

text:
(a) For each record filed in a filing office, the filing office shall do all of the following:

(1) Assign a unique number to the filed record.

(2) Create a record that bears the number assigned to the filed record and the date and time of filing.

(3) Maintain the filed record for public inspection.

(4) Index the filed record in accordance with subdivisions (c), (d), and (e).

(b) Except as otherwise provided in subdivision (i), a file number assigned after January 1, 2002, must include a digit that:

(1) Is mathematically derived from or related to the other digits of the file number.

(2) Aids the filing office in determining whether a number communicated as the file number includes a single-digit or transpositional error.

(c) Except as otherwise provided in subdivisions (d) and (e), the filing office shall do both of the following:

(1) Index an initial financing statement according to the name of the debtor and index all filed records relating to the initial financing statement in a manner that associates with one another an initial financing statement and all filed records relating to the initial financing statement.

(2) Index a record that provides a name of a debtor which was not previously provided in the financing statement to which the record relates also according to the name that was not previously provided.

(d) If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, it must be recorded and the filing office shall index it in accordance with both of the following rules:

(1) Under the names of the debtor and of each owner of record shown on the financing statement as if they were the mortgagors under a mortgage of the real property described.

(2) To the extent that the law of this state provides for indexing of records of mortgages under the name of the mortgagee, under the name of the secured party as if the secured party were the mortgagee thereunder, or, if indexing is by description, as if the financing statement were a record of a mortgage of the real property described.

(e) If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, the filing office shall index an assignment filed under subdivision (a) of Section 9514 or an amendment filed under subdivision (b) of Section 9514 in accordance with both of the following rules:

(1) Under the name of the assignor as grantor.

(2) To the extent that the law of this state provides for indexing a record of the assignment of a mortgage under the name of the assignee, under the name of the assignee.

(f) The filing office shall maintain a capability to do both of the following:

(1) Retrieve a record by the name of the debtor and by either of the following:

(A) If the filing office is described in paragraph (1) of subdivision (a) of Section 9501, by the file number assigned to the initial financing statement to which the record relates and the date that the record was filed or recorded.

(B) If the filing office is described in paragraph (2) of subdivision (a) of Section 9501, by the file number assigned to the initial financing statement to which the record relates.

(2) Associate and retrieve with one another an initial financing statement and each filed record relating to the initial financing statement.

(g) The filing office may not remove a debtor’s name from the index until one year after the effectiveness of a financing statement naming the debtor lapses under Section 9515 with respect to all secured parties of record.

(h) Except as otherwise provided in subdivision (i), the filing office shall perform the acts required by subdivisions (a) to (e), inclusive, at the time and in the manner prescribed by filing-office rule, but not later than two business days after the filing office receives the record in question.

(i) Subdivisions (b) and (h) do not apply to a filing office described in paragraph (1) of subdivision (a) of Section 9501.

history: (History: Amended (as to be added by Stats. 1999, Ch. 991) by Stats. 2000, Ch. 1003, Sec. 39. Effective January 1, 2001. Addition and amendment operative July 1, 2001, by Stats. 1999, Ch. 991, Sec. 75, and Stats. 2000, Ch. 1003, Sec. 56.)


citation: COM § 9520

text:
(a) A filing office shall refuse to accept a record for filing for a reason set forth in subdivision (b) of Section 9516 and may refuse to accept a record for filing only for a reason set forth in subdivision (b) of Section 9516.

(b) If a filing office refuses to accept a record for filing, it shall communicate to the person that presented the record the fact of and reason for the refusal and the date and time the record would have been filed had the filing office accepted it. The communication shall be made at the time and in the manner prescribed by filing-office rule, but in the case of a filing office described in paragraph (2) of subdivision (a) of Section 9501, in no event more than two business days after the filing office receives the record.

(c) A filed financing statement satisfying subdivisions (a) and (b) of Section 9502 is effective, even if the filing office is required to refuse to accept it for filing under subdivision (a). However, Section 9338 applies to a filed financing statement providing information described in paragraph (5) of subdivision (b) of Section 9516 which is incorrect at the time the financing statement is filed.

(d) If a record communicated to a filing office provides information that relates to more than one debtor, this chapter applies as to each debtor separately.


citation: COM § 9521

text:
(a) A filing office that accepts written records may not refuse to accept a written initial financing statement in the following form and format except for a reason set forth in subdivision (b) of Section 9516:

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

NOTICE OF INCOMPLETE TEXT: The UCC Financing Statement form appears in the hard-copy publication of the chaptered bill. See Sec. 21, Chapter 531 (pp. 30–31), Statutes of 2013.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * (b) A filing office that accepts written records may not refuse to accept a written record in the following form and format except for a reason set forth in subdivision (b) of Section 9516:

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

NOTICE OF INCOMPLETE TEXT: The UCC Financing Statement Amendment form appears in the hard-copy publication of the chaptered bill. See Sec. 21, Chapter 531 (pp. 33–34), Statutes of 2013.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

history: (History: Amended by Stats. 2013, Ch. 531, Sec. 21. (AB 502) Effective January 1, 2014. Operative July 1, 2014, by Sec. 28 of Ch. 531. Note: See published chaptered bill for complete section text. The UCC Financing Statement forms appear in Ch. 531 on pages 30 to 31 and 33 to 34.)


citation: COM § 9522

text:
(a) The filing office shall maintain a record of the information provided in a filed financing statement for at least one year after the effectiveness of the financing statement has lapsed under Section 9515 with respect to all secured parties of record. The record shall be retrievable by using the name of the debtor and either of the following:

(1) If the record was filed or recorded in a filing office described in paragraph (1) of subdivision (a) of Section 9501, by using the file number assigned to the initial financing statement to which the record relates and the date the record was filed or recorded.

(2) If the record was filed in a filing office described in paragraph (2) of subdivision (a) of Section 9501, by using the file number assigned to the initial financing statement to which the record relates.

(b) Except to the extent that a statute governing disposition of public records provides otherwise, the filing office immediately may destroy any written record evidencing a financing statement. However, if the filing office destroys a written record, it shall maintain another record of the financing statement which complies with subdivision (a).


citation: COM § 9523

text:
(a) If a person that files a written record requests an acknowledgment of the filing, the filing office shall send to the person an image of the record showing the number assigned to the record pursuant to paragraph (1) of subdivision (a) of Section 9519 and the date and time of the filing of the record. However, if the person furnishes a copy of the record to the filing office, the filing office may instead do both of the following:

(1) Note upon the copy the number assigned to the record pursuant to paragraph (1) of subdivision (a) of Section 9519 and the date and time of the filing of the record.

(2) Send the copy to the person.

(b) If a person files a record other than a written record, the filing office shall communicate to the person an acknowledgment that provides all of the following information:

(1) The information in the record.

(2) The number assigned to the record pursuant to paragraph (1) of subdivision (a) of Section 9519.

(3) The date and time of the filing of the record.

(c) The filing office shall communicate or otherwise make available in a record all of the following information to any person that requests it:

(1) Whether there is on file on a date and time specified by the filing office, but not a date earlier than three business days before the filing office receives the request, any financing statement that satisfies all of the following conditions:

(A) It designates a particular debtor or, if the request so states, designates a particular debtor at the address specified in the request.

(B) It has not lapsed under Section 9515 with respect to all secured parties of record.

(C) If the request so states, it has lapsed under Section 9515 and a record of which is maintained by the filing office under subdivision (a) of Section 9522.

(2) The date and time of filing of each financing statement.

(3) The information provided in each financing statement.

(d) In complying with its duty under subdivision (c), the filing office may communicate information in any medium. However, if requested, the filing office shall communicate information by issuing its written certificate.

(e) The filing office described in paragraph (2) of subdivision (a) of Section 9501 shall perform the acts required by subdivisions (a) to (d), inclusive, at the time and in the manner prescribed by filing-office rule, but not later than two business days after the filing office receives the request.

(f) At least weekly, the filing office described in paragraph (2) of subdivision (a) of Section 9501 shall offer to sell or license to the public on a nonexclusive basis, in bulk, copies of all records filed in it under this chapter, in every medium from time to time available to the filing office.


citation: COM § 9524

text:
Delay by the filing office beyond a time limit prescribed by this chapter is excused if both of the following conditions are satisfied:

(1) The delay is caused by interruption of communication or computer facilities, war, emergency conditions, failure of equipment, or other circumstances beyond control of the filing office.

(2) The filing office exercises reasonable diligence under the circumstances.

history: (History: Amended (as to be added by Stats. 1999, Ch. 991) by Stats. 2000, Ch. 1003, Sec. 40. Effective January 1, 2001. Addition and amendment operative July 1, 2001, by Stats. 1999, Ch. 991, Sec. 75, and Stats. 2000, Ch. 1003, Sec. 56.)


citation: COM § 9525

text:
(a) Except as otherwise provided in subdivision (d), the fee for filing and indexing a record under this chapter is set forth in subdivisions (a), (b), and (c) of Section 12194 of the Government Code.

(b) The number of names required to be indexed does not affect the amount of the fee in subdivision (a).

(c) The fee for responding to a request for information from the filing office, including for issuing a certificate showing whether there is on file any financing statement naming a particular debtor, is as follows:

(1) Ten dollars ($10) if the request is communicated in writing.

(2) Five dollars ($5) if the request is communicated by another medium authorized by a rule adopted by the filing office.

(d) This section does not require a fee with respect to a record of a mortgage which is effective as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut under subdivision (c) of Section 9502. However, the recording and satisfaction fees that otherwise would be applicable to the record of the mortgage apply.

history: (History: Amended (as to be added by Stats. 1999, Ch. 991) by Stats. 2000, Ch. 1003, Sec. 41. Effective January 1, 2001. Addition and amendment operative July 1, 2001, by Stats. 1999, Ch. 991, Sec. 75, and Stats. 2000, Ch. 1003, Sec. 56.)


citation: COM § 9526

text:
(a) The Secretary of State shall adopt and publish rules to implement this division. The filing-office rules shall be consistent with this division.

(b) To keep the filing-office rules and practices of the filing office in harmony with the rules and practices of filing offices in other jurisdictions that enact substantially this chapter, and to keep the technology used by the filing office compatible with the technology used by filing offices in other jurisdictions that enact substantially this chapter, the Secretary of State, so far as is consistent with the purposes, policies, and provisions of this division, in adopting, amending, and repealing filing-office rules, shall do all of the following:

(1) Consult with filing offices in other jurisdictions that enact substantially this chapter.

(2) Consult the most recent version of the Model Rules promulgated by the International Association of Corporate Administrators or any successor organization.

(3) Take into consideration the rules and practices of, and the technology used by, filing offices in other jurisdictions that enact substantially this chapter.


text:
(a) For purposes of this section, the following terms have the following meanings:

(1) “Official filing” means the permanent archival filing of all instruments, papers, records, and attachments as accepted for filing by a filing office.

(2) “Public filing” means a filing that is an exact copy of an official filing except that any social security number contained in the copied filing is truncated. The public filing shall have the same legal force and effect as the official filing.

(3) “Truncate” means to redact at least the first five digits of a social security number.

(4) “Truncated social security number” means a social security number that displays no more than the last four digits of the number.

(b) For every filing containing an untruncated social security number filed before August 1, 2007, a filing office shall create a public filing.

(c) A filing office shall post a notice on its Internet Web site informing filers not to include social security numbers in any portion of their filings. A filing office’s online filing system shall not contain a field requesting a social security number.

(d) Beginning August 1, 2007, for every filing containing an untruncated social security number filed by means other than the filing office’s Internet Web site, a filing office shall create a public filing.

(e) When a public filing version of an official filing exists, both of the following shall apply:

(1) Upon a request for inspection, copying, or other public disclosure of an official filing that is not exempt from disclosure, a filing office shall make available only the public filing version of that filing.

(2) A filing office shall publicly disclose an official filing only in response to a subpoena or order of a court of competent jurisdiction.

(3) This article does not restrict, delay, or modify access to an official filing, or modify existing agreements regarding access to an official filing, prior to the creation and availability of a public filing version of that official filing.

(f) A filing office shall be deemed to be in compliance with the requirements of this section and shall not be liable for failure to truncate a social security number if the office uses due diligence to locate social security numbers in official records and truncate the social security numbers in the public filing version of those official filings. The use of an automated program with a high rate of accuracy shall be deemed to be due diligence.

(g) In the event that a filing office fails to truncate a social security number contained in a record pursuant to subdivision (b) or (d), a person may request that the filing office truncate the social security number contained in that record. Notwithstanding that a filing office may be deemed to be in compliance with this section pursuant to subdivision (f), a filing office that receives a request that identifies the exact location of an untruncated social security number that is required to be truncated pursuant to subdivision (b) or (d) within a specifically identified record, shall truncate that number within 10 business days of receiving the request. The public filing with the truncated social security number shall replace the record with the untruncated number.

(h) The Secretary of State shall not produce or make available financing statements in the form and format described in Section 9521 that provide a space identified for the disclosure of the social security number of an individual.

(i) The Secretary of State shall produce and make available financing statements in the form and format described in Section 9521, except that the financing statements shall not provide a space identified for the disclosure of the social security number of an individual.

(j) This section does not apply to a county recorder.

history: (History: Amended by Stats. 2008, Ch. 179, Sec. 36. Effective January 1, 2009.)


citation: COM § 9528

text: Upon the request of any person, the Secretary of State shall issue a combined certificate showing the information as to financing statements as specified in Section 9523, the information as to state tax liens as specified in Section 7226 of the Government Code, the information as to attachment liens as specified in Sections 488.375 and 488.405 of the Code of Civil Procedure, the information as to judgment liens as specified in Section 697.580 of the Code of Civil Procedure, and the information as to federal liens as specified in Section 2103 of the Code of Civil Procedure.

history: (History: Amended (as to be added by Stats. 1999, Ch. 991) by Stats. 2000, Ch. 135, Sec. 20. Effective January 1, 2001. Addition and amendment operative July 1, 2001, pursuant to Stats. 1999, Ch. 991, Sec. 75, and Section 9701.)


citation: COM § 9601

text:
(a) After default, a secured party has the rights provided in this chapter and, except as otherwise provided in Section 9602, those rights provided by agreement of the parties. A secured party may do both of the following:

(1) Reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, or agricultural lien by any available judicial procedure.

(2) If the collateral is documents, proceed either as to the documents or as to the goods they cover.

(b) A secured party in possession of collateral or control of collateral under Section 7106, 9104, 9105, 9105.1, 9106, 9107, or 9107.1 has the rights and duties provided in Section 9207.

(c) The rights under subdivisions (a) and (b) are cumulative and may be exercised simultaneously.

(d) Except as otherwise provided in subdivision (g) and in Section 9605, after default, a debtor and an obligor have the rights provided in this chapter and by agreement of the parties.

(e) If a secured party has reduced its claim to judgment, the lien of any levy that may be made upon the collateral by virtue of an execution based upon the judgment relates back to the earliest of any of the following:

(1) The date of perfection of the security interest or agricultural lien in the collateral.

(2) The date of filing a financing statement covering the collateral.

(3) Any date specified in a statute under which the agricultural lien was created.

(f) A sale pursuant to an execution is a foreclosure of the security interest or agricultural lien by judicial procedure within the meaning of this section. A secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this division.

(g) Except as otherwise provided in subdivision (c) of Section 9607, this part imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 61. (SB 95) Effective January 1, 2024.)

chapter: 6. Default

path: 9. SECURED TRANSACTIONS > 6. Default


citation: COM § 9602

text:
Except as otherwise provided in Section 9624, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following listed sections:

(1) Subparagraph (C) of paragraph (4) of subdivision (b) of Section 9207, which deals with use and operation of the collateral by the secured party.

(2) Section 9210, which deals with requests for an accounting and requests concerning a list of collateral and statement of account.

(3) Subdivision (c) of Section 9607, which deals with collection and enforcement of collateral.

(4) Subdivision (a) of Section 9608 and subdivision (c) of Section 9615 to the extent that they deal with application or payment of noncash proceeds of collection, enforcement, or disposition.

(5) Subdivision (a) of Section 9608 and subdivision (d) of Section 9615 to the extent that they require accounting for or payment of surplus proceeds of collateral.

(6) Section 9609 to the extent that it imposes upon a secured party that takes possession of collateral without judicial process the duty to do so without breach of the peace.

(7) Subdivision (b) of Section 9610, and Sections 9611, 9613, and 9614, which deal with disposition of collateral.

(8) Subdivision (f) of Section 9615, which deals with calculation of a deficiency or surplus when a disposition is made to the secured party, a person related to the secured party, or a secondary obligor.

(9) Section 9616, which deals with explanation of the calculation of a surplus or deficiency.

(10) Section 9620, 9621, and 9622, which deal with acceptance of collateral in satisfaction of obligation.

(11) Section 9623, which deals with redemption of collateral.

(12) Section 9624, which deals with permissible waivers.

(13) Sections 9625 and 9626, which deal with the existence of a deficiency and with the secured party’s liability for failure to comply with this division.


citation: COM § 9603

text:
(a) The parties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of a secured party under a rule stated in Section 9602 if the standards are not manifestly unreasonable.

(b) Subdivision (a) does not apply to the duty under Section 9609 to refrain from breaching the peace.


citation: COM § 9604

text:
(a) If an obligation secured by a security interest in personal property or fixtures is also secured by an interest in real property or an estate therein:

(1) The secured party may do any of the following:

(A) Proceed, in any sequence, (i) in accordance with the secured party’s rights and remedies in respect of real property as to the real property security, and (ii) in accordance with this chapter as to the personal property or fixtures.

(B) Proceed in any sequence, as to both, some, or all of the real property and some or all of the personal property or fixtures in accordance with the secured party’s rights and remedies in respect of the real property, by including the portion of the personal property or fixtures selected by the secured party in the judicial or nonjudicial foreclosure of the real property in accordance with the procedures applicable to real property. In proceeding under this subparagraph, (i) no provision of this chapter other than this subparagraph, subparagraph (C) of paragraph (4), and paragraphs (7) and (8) shall apply to any aspect of the foreclosure; (ii) a power of sale under the deed of trust or mortgage shall be exercisable with respect to both the real property and the personal property or fixtures being sold; and (iii) the sale may be conducted by the mortgagee under the mortgage or by the trustee under the deed of trust. The secured party shall not be deemed to have elected irrevocably to proceed as to both real property and personal property or fixtures as provided in this subparagraph with respect to any particular property, unless and until that particular property actually has been disposed of pursuant to a unified sale (judicial or nonjudicial) conducted in accordance with the procedures applicable to real property, and then only as to the property so sold.

(C) Proceed, in any sequence, as to part of the personal property or fixtures as provided in subparagraph (A), and as to other of the personal property or fixtures as provided in subparagraph (B).

(2) (A) Except as otherwise provided in paragraph (3), provisions and limitations of any law respecting real property and obligations secured by an interest in real property or an estate therein, including, but not limited to, Section 726 of the Code of Civil Procedure, provisions regarding acceleration or reinstatement of obligations secured by an interest in real property or an estate therein, prohibitions against deficiency judgments, limitations on deficiency judgments based on the value of the collateral, limitations on the right to proceed as to collateral, and requirements that a creditor resort either first or at all to its security, do not in any way apply to either (i) any personal property or fixtures other than personal property or fixtures as to which the secured party has proceeded or is proceeding under subparagraph (B) of paragraph (1), or (ii) the obligation.

(B) Pursuant to, but without limiting subparagraph (A), in the event that an obligation secured by personal property or fixtures would otherwise become unenforceable by reason of Section 726 of the Code of Civil Procedure or any requirement that a creditor resort first to its security, then, notwithstanding that section or any similar requirement, the obligation shall nevertheless remain enforceable to the full extent necessary to permit a secured party to proceed against personal property or fixtures securing the obligation in accordance with the secured party’s rights and remedies as permitted under this chapter.

(3) (A) Paragraph (2) does not limit the application of Section 580b of the Code of Civil Procedure.

(B) If the secured party commences an action, as defined in Section 22 of the Code of Civil Procedure, and the action seeks a monetary judgment on the debt, paragraph (2) does not prevent the assertion by the debtor or an obligor of any right to require the inclusion in the action of any interest in real property or an estate therein securing the debt. If a monetary judgment on the debt is entered in the action, paragraph (2) does not prevent the assertion by the debtor or an obligor of the subsequent unenforceability of the encumbrance on any interest in real property or an estate therein securing the debt and not included in the action.

(C) Nothing in paragraph (2) shall be construed to excuse compliance with Section 2924c of the Civil Code as a prerequisite to the sale of real property, but that section has no application to the right of a secured party to proceed as to personal property or fixtures except, and then only to the extent that, the secured party is proceeding as to personal property or fixtures in a unified sale as provided in subparagraph (B) of paragraph (1).

(D) Paragraph (2) does not deprive the debtor of the protection of Section 580d of the Code of Civil Procedure against a deficiency judgment following a sale of the real property collateral pursuant to a power of sale in a deed of trust or mortgage.

(E) Paragraph (2) shall not affect, nor shall it determine the applicability or inapplicability of, any law respecting real property or obligations secured in whole or in part by real property with respect to a loan or a credit sale made to any individual primarily for personal, family, or household purposes.

(F) Paragraph (2) does not deprive the debtor or an obligor of the protection of Section 580a of the Code of Civil Procedure following a sale of real property collateral.

(G) If the secured party violates any statute or rule of law that requires a creditor who holds an obligation secured by an interest in real property or an estate therein to resort first to its security before resorting to any property of the debtor that does not secure the obligation, paragraph (2) does not prevent the assertion by the debtor or an obligor of any right to require correction of the violation, any right of the secured party to correct the violation, or the assertion by the debtor or an obligor of the subsequent unenforceability of the encumbrance on any interest in real property or an estate therein securing the obligation, or the assertion by the debtor or an obligor of the subsequent unenforceability of the obligation except to the extent that the obligation is preserved by subparagraph (B) of paragraph (2).

(4) If the secured party realizes proceeds from the disposition of collateral that is personal property or fixtures, the following provisions shall apply:

(A) The disposition of the collateral, the realization of the proceeds, the application of the proceeds, or any one or more of the foregoing shall not operate to cure any nonmonetary default.

(B) The disposition of the collateral, the realization of the proceeds, the application of the proceeds, or any one or more of the foregoing shall not operate to cure any monetary default (although the application of the proceeds shall, to the extent of those proceeds, satisfy the secured obligation) so as to affect in any way the secured party’s rights and remedies under this chapter with respect to any remaining personal property or fixtures collateral.

(C) All proceeds so realized shall be applied by the secured party to the secured obligation in accordance with the agreement of the parties and applicable law.

(5) An action by the secured party utilizing any available judicial procedure shall in no way be affected by omission of a prayer for a monetary judgment on the debt. Notwithstanding Section 726 of the Code of Civil Procedure, any prohibition against splitting causes of action or any other statute or rule of law, a judicial action which neither seeks nor results in a monetary judgment on the debt shall not preclude a subsequent action seeking a monetary judgment on the debt or any other relief.

(6) As used in this subdivision, “monetary judgment on the debt” means a judgment for the recovery from the debtor of all or part of the principal amount of the secured obligation, including, for purposes of this subdivision, contractual interest thereon. “Monetary judgment on the debt” does not include a judgment which provides only for other relief (whether or not that other relief is secured by the collateral), such as one or more forms of nonmonetary relief, and monetary relief ancillary to any of the foregoing, such as attorneys’ fees and costs incurred in seeking the relief.

(7) If a secured party fails to comply with the procedures applicable to real property in proceeding as to both real and personal property under subparagraph (B) of paragraph (1), a purchaser for value of any interest in the real property at judicial or nonjudicial foreclosure proceedings conducted pursuant to subparagraph (B) of paragraph (1) takes that interest free from any claim or interest of another person, or any defect in title, based upon that noncompliance, unless:

(A) The purchaser is the secured party and the failure to comply with this chapter occurred other than in good faith; or

(B) The purchaser is other than the secured party and at the time of sale of the real property at that foreclosure the purchaser had knowledge of the failure to comply with this chapter and that the noncompliance occurred other than in good faith.

Even if the purchaser at the foreclosure sale does not take his or her interest free of claims, interests, or title defects based upon that noncompliance with this chapter, a subsequent purchaser for value who acquires an interest in that real property from the purchaser at that foreclosure takes that interest free from any claim or interest of another person, or any defect in title, based upon that noncompliance, unless at the time of acquiring the interest the subsequent purchaser has knowledge of the failure to comply with this chapter and that the noncompliance occurred other than in good faith.

(8) If a secured party proceeds by way of a unified sale under subparagraph (B) of paragraph (1), then, for purposes of applying Section 580a or subdivision (b) of Section 726 of the Code of Civil Procedure to any such unified sale, the personal property or fixtures included in the unified sale shall be deemed to be included in the “real property or other interest sold,” as that term is used in Section 580a or subdivision (b) of Section 726 of the Code of Civil Procedure.


citation: COM § 9605

text:
(a) Except as provided in subdivision (b), a secured party does not owe a duty based on its status as secured party to either of the following persons:

(1) To a person that is a debtor or obligor, unless the secured party knows all of the following:

(A) That the person is a debtor or obligor.

(B) The identity of the person.

(C) How to communicate with the person.

(2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows both of the following:

(A) That the person is a debtor.

(B) The identity of the person.

(b) A secured party owes a duty based on its status as a secured party to a person if, at the time the secured party obtains control of collateral that is a controllable account, controllable electronic record, or controllable payment intangible or at the time the security interest attaches to the collateral, whichever is later, both of the following conditions are satisfied:

(1) The person is a debtor or obligor.

(2) The secured party knows that the information in subparagraph (A), (B), or (C) of paragraph (1) of subdivision (a) relating to the person is not provided by the collateral, a record attached to or logically associated with the collateral, or the system in which the collateral is recorded.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 62. (SB 95) Effective January 1, 2024.)


citation: COM § 9606

text: For purposes of this chapter, a default occurs in connection with an agricultural lien at the time the secured party becomes entitled to enforce the lien in accordance with the statute under which it was created.


citation: COM § 9607

text:
(a) If so agreed, and in any event after default, a secured party may do all of the following:

(1) Notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party.

(2) Take any proceeds to which the secured party is entitled under Section 9315.

(3) Enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral.

(4) If it holds a security interest in a deposit account perfected by control under paragraph (1) of subdivision (a) of Section 9104, apply the balance of the deposit account to the obligation secured by the deposit account.

(5) If it holds a security interest in a deposit account perfected by control under paragraph (2) or (3) of subdivision (a) of Section 9104, instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.

(b) If necessary to enable a secured party to exercise under paragraph (3) of subdivision (a) the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded both of the following:

(1) A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage.

(2) The secured party’s sworn affidavit in recordable form stating both of the following:

(A) That a default has occurred with respect to the obligation secured by the mortgage.

(B) That the secured party is entitled to enforce the mortgage nonjudicially.

(c) A secured party shall proceed in a commercially reasonable manner if both of the following apply with respect to the secured party:

(1) It undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral.

(2) It is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.

(d) A secured party may deduct from the collections made pursuant to subdivision (c) reasonable expenses of collection and enforcement, including reasonable attorney’s fees and legal expenses incurred by the secured party.

(e) This section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.

history: (History: Amended by Stats. 2013, Ch. 531, Sec. 22. (AB 502) Effective January 1, 2014. Operative July 1, 2014, by Sec. 28 of Ch. 531.)


citation: COM § 9608

text:
(a) If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:

(1) A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under Section 9607 in the following order to:

(A) The reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney’s fees and legal expenses incurred by the secured party.

(B) The satisfaction of obligations secured by the security interest or agricultural lien under which the collection or enforcement is made.

(C) The satisfaction of obligations secured by any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lien under which the collection or enforcement is made if the secured party receives a signed demand for proceeds before distribution of the proceeds is completed.

(2) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder’s demand under subparagraph (C) of paragraph (1).

(3) A secured party need not apply or pay over for application noncash proceeds of collection and enforcement under Section 9607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(4) A secured party shall account to and pay a debtor for any surplus, and except as otherwise provided in subdivision (b) of Section 9626, the obligor is liable for any deficiency.

(b) If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency. Subdivision (b) of Section 701.040 of the Code of Civil Procedure relating to the payment of proceeds applies only if the security agreement provides that the debtor is entitled to any surplus.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 63. (SB 95) Effective January 1, 2024.)


citation: COM § 9609

text:
(a) After default, a secured party may do both of the following:

(1) Take possession of the collateral.

(2) Without removal, render equipment unusable and dispose of collateral on a debtor’s premises under Section 9610.

(b) A secured party may proceed under subdivision (a) in either of the following ways:

(1) Pursuant to judicial process.

(2) Without judicial process, if it proceeds without breach of the peace.

(c) If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.


citation: COM § 9610

text:
(a) After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing.

(b) Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms.

(c) A secured party may purchase collateral at either of the following:

(1) At a public disposition.

(2) At a private disposition only if the collateral is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations.

(d) A contract for sale, lease, license, or other disposition includes the warranties relating to title, possession, quiet enjoyment, and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.

(e) A secured party may disclaim or modify warranties under subdivision (d) in either of the following ways:

(1) In a manner that would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition.

(2) By communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.

(f) A record is sufficient to disclaim warranties under subdivision (e) if it indicates “There is no warranty relating to title, possession, quiet enjoyment, or the like in this disposition” or uses words of similar import.


citation: COM § 9611

text:
(a) In this section, “notification date” means the earlier of the date on which:

(1) A secured party sends to the debtor and any secondary obligor a signed notification of disposition.

(2) The debtor and any secondary obligor waive the right to notification.

(b) Except as otherwise provided in subdivision (d), a secured party that disposes of collateral under Section 9610 shall send to the persons specified in subdivision (c) a reasonable signed notification of disposition.

(c) To comply with subdivision (b), the secured party shall send a signed notification of disposition to all of the following persons:

(1) The debtor.

(2) Any secondary obligor.

(3) If the collateral is other than consumer goods to both of the following persons:

(A) Any other person from which the secured party has received, before the notification date, a signed notification of a claim of an interest in the collateral.

(B) Any other secured party or lienholder that, 10 days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement with respect to which all of the following apply:

(i) It identified the collateral.

(ii) It was indexed under the debtor’s name as of that date.

(iii) It was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date.

(C) Any other secured party that, 10 days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in subdivision (a) of Section 9311.

(d) Subdivision (b) does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.

(e) A secured party complies with the requirement for notification prescribed in subparagraph (B) of paragraph (3) of subdivision (c) if it satisfies both of the following conditions:

(1) Not later than 20 days or earlier than 30 days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor’s name in the office indicated in subparagraph (B) of paragraph (3) of subdivision (c).

(2) Before the notification date, the secured party either:

(A) Did not receive a response to the request for information.

(B) Received a response to the request for information and sent a signed notification of disposition to each secured party or other lienholder named in that response whose financing statement covered the collateral.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 64. (SB 95) Effective January 1, 2024.)


citation: COM § 9612

text:
(a) Except as otherwise provided in subdivision (b), whether a notification is sent within a reasonable time is a question of fact.

(b) In a transaction other than a consumer transaction, a notification of disposition sent after default and 10 days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.


citation: COM § 9613

text:
(a) Except in a consumer-goods transaction, the following rules apply:

(1) The contents of a notification of disposition are sufficient if the notification does all of the following:

(A) It describes the debtor and the secured party.

(B) It describes the collateral that is the subject of the intended disposition.

(C) It states the method of intended disposition.

(D) It states that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting.

(E) It states the time and place of a public disposition or the time after which any other disposition is to be made.

(2) Whether the contents of a notification that lacks any of the information specified in paragraph (1) are nevertheless sufficient is a question of fact.

(3) The contents of a notification providing substantially the information specified in paragraph (1) are sufficient, even if the notification includes either of the following:

(A) Information not specified by that paragraph.

(B) Minor errors that are not seriously misleading.

(4) A particular phrasing of the notification is not required.

(5) The following form of notification and the form appearing in paragraph (3) of subdivision (a) of Section 9614, when completed in accordance with the instructions in subdivision (b) and subdivision (b) or (c), as applicable, of Section 9614, each provides sufficient information:NOTIFICATION OF DISPOSITION OF COLLATERALTo: [Name of debtor, obligor, or other person to which the notification is sent]From: [Name, address, and telephone number of secured party]{1} Name of any debtor that is not an addressee: [Name of each debtor]{2} We will sellthe [describe collateral] [to the highest qualified bidder] at public sale. A sale could include a lease or license. The sale will be heldas follows:Date: Time: Place: {3} We will sell (describe collateral) at private sale sometime after [date]. A sale could include a lease or license.{4} You are entitled to an accounting of the unpaid indebtednesssecured by the property that we intend to sell or, as applicable, lease or license.{5} If you request an accounting you must pay a charge of (amount) {6} You may requestan accounting by calling us at .[telephone number](b) The following instructions apply to the form of notification in paragraph (5) of subdivision (a):

(1) The instructions in this subdivision refer to the numbers in braces before items in the form of notification in paragraph (5) of subdivision (a). Do not include the numbers or braces in the notification. The numbers and braces are used only for the purpose of these instructions.

(2) Include and complete item {1} only if there is a debtor that is not an addressee of the notification and list the name or names.

(3) Include and complete either item {2}, if the notification relates to a public disposition of the collateral, or item {3}, if the notification relates to a private disposition of the collateral. If item {2} is included, include the words “to the highest qualified bidder” only if applicable.

(4) Include and complete items {4} and {6}.

(5) Include and complete item {5} only if the sender will charge the recipient for an accounting.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 65. (SB 95) Effective January 1, 2024.)


citation: COM § 9614

text:
(a) In a consumer-goods transaction, the following rules apply:

(1) A notification of disposition must provide all of the following information:

(A) The information specified in paragraph (1) of subdivision (a) of Section 9613.

(B) A description of any liability for a deficiency of the person to which the notification is sent.

(C) A telephone number from which the amount that must be paid to the secured party to redeem the collateral under Section 9623 is available.

(D) A telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.

(2) A particular phrasing of the notification is not required.

(3) The following form of notification, when completed in accordance with the instructions in subdivision (b), provides sufficient information:[Name and address of secured party][Date]NOTICE OF OUR PLAN TO SELL PROPERTY [Name and address of any obligor who is also a debtor]Subject: [Identification of Transaction]We have your [describe collateral], because you broke promisesin our agreement.{1} We will sell [describe collateral]at public sale. A sale could include a lease or license. The sale will be held as follows:Date: Time: Place: You may attend the sale and bring bidders if you want.{2} We will sell [describe collateral] at private sale sometime after [date].A sale could include a lease or license.{3} The money that we get from the sale, after paying our costs,will reduce the amount you owe. If we get less money than youowe, you [will or will not, as applicable] still owe us thedifference. If we get more money than you owe, you will getthe extra money, unless we must pay it to someone else.{4} You can get the property back at any time before we sell it bypaying us the full amount you owe, not just the past due payments, including our expenses. To learn the exact amountyou must pay, call us at [telephone number].{5} If you want us to explain to you in[writing] [writing or in [description of electronic record]] [description of electronic record] how we have figuredthe amount that you owe us, {6} call usat [telephone number] [or write us at [secured party’s address]][or contact us by [description of electronic communication method]{7} and request[a written explanation] [a written explanation or an explanation in [description of electronic record]] [an explanation in [description of electronic record]]{8} We will charge you $_____for the explanation if we sent you another written explanation of the amount you owe us within the last six months.]{9} If you need more information about the sale [call usat [telephone number]] [or] [write us at [secured party’s address]] [or contact us by[description of electronic communication method]].{10} We are sending this notice to the following other people who have an interest in [describe collateral] or who owe money underyour agreement: [Names of all other debtors and obligors, if any](b) The following instructions apply to the form of notification in paragraph (3) of subdivision (a):

(1) The instructions in this subdivision refer to the numbers in braces before items in the form of notification in paragraph (3) of subdivision (a). Do not include the numbers or braces in the notification. The numbers and braces are used only for the purpose of these instructions.

(2) Include and complete either item {1}, if the notification relates to a public disposition of the collateral, or item {2}, if the notification relates to a private disposition of the collateral.

(3) Include and complete items {3} to {7}, inclusive.

(4) In item {5}, include and complete any one of the three alternative methods for the explanation—writing, writing or electronic record, or electronic record.

(5) In item {6}, include the telephone number. In addition, the sender may include and complete either or both of the two additional alternative methods of communication—writing or electronic communication—for the recipient of the notification to communicate with the sender. Neither of the two additional methods of communication is required to be included.

(6) In item {7}, include and complete the method or methods for the explanation—writing, writing or electronic record, or electronic record—included in item {5}.

(7) Include and complete item {8} only if a written explanation is included in item {5} as a method for communicating the explanation and the sender will charge the recipient for another written explanation.

(8) In item {9}, include either the telephone number or the address or both the telephone number and the address. In addition, the sender may include and complete the additional method of communication—electronic communication—for the recipient of the notification to communicate with the sender. The additional method of electronic communication is not required to be included.

(9) If item {10} does not apply, insert “None” after “agreement:”.

(c) (1) If the collateral is a motor vehicle, a public disposition includes, but is not limited to, the following defined categories:

(A) Retail disposition by a retail seller of motor vehicles who offers the collateral for sale or lease to the general public in the same manner as goods that the seller disposes of on the seller’s own behalf.

(B) Retail disposition made subsequent to advertising in a publication with a recognized ability to attract retail motor vehicle buyers and lessees and in a manner designed to reach the retail buying and leasing public for vehicles of that type and condition.

(2) For dispositions under subparagraphs (A) and (B) of paragraph (1), the secured creditor shall ensure that the consumer has reasonable access to the motor vehicle in question in order to be able to exercise the right to inspect the motor vehicle.

(3) For dispositions under paragraph (1), the following rules apply:

(A) A notification in the form of paragraph (4) is sufficient, even if additional information appears at the end of the form.

(B) A notification in the form of paragraph (4) is sufficient, even if it includes errors in information not required by paragraph (1) of subdivision (a), unless the error is misleading with respect to rights arising under this division.

(C) If a notification under this subdivision is not in the form of paragraph (4), law other than this division determines the effect of including information not required by paragraph (1) of subdivision (a).

(4) For dispositions under paragraph (1), the following form of notification, when completed, provides sufficient information:

[Name and address of secured party][Date]NOTICE OF OUR PLAN TO SELL PROPERTY [Name and address of any obligor who is also a debtor]Subject: [Identification of Transaction]We have your [describe collateral], because you broke promisesin our agreement.We will sell (describe type of motor vehicle)beginning on (date)by offering it for retail sale or lease to the general public through(select the applicable provision:)(A) Name of dealerAddress of dealerYou may inspect the motor vehicle and encourage people to purchase or lease it.(or)(B) Advertising it for sale to the general public to be purchasedfrom (name of secured creditor)at (address where vehicle is to be sold)You may inspect the motor vehicle and encourage people to purchase or lease it.

(d) Nothing in this section shall be construed to alter or disturb any right to inspect a consumer good prior to sale under existing law.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 66. (SB 95) Effective January 1, 2024.)


citation: COM § 9615

text:
(a) A secured party shall apply or pay over for application the cash proceeds of disposition under Section 9610 in the following order to each of the following:

(1) The reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney’s fees and legal expenses incurred by the secured party.

(2) The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made.

(3) The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral and to the satisfaction of any subordinate attachment lien or execution lien pursuant to subdivision (b) of Section 701.040 of the Code of Civil Procedure if both of the following conditions are satisfied:

(A) The secured party receives from the holder of the subordinate security interest or other lien a signed demand for proceeds or notice of the levy of attachment or execution before distribution of the proceeds is completed.

(B) In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor.

(4) A secured party that is a consignor of the collateral if the secured party receives from the consignor a signed demand for proceeds before distribution of the proceeds is completed.

(b) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder’s demand under paragraph (3) of subdivision (a).

(c) A secured party need not apply or pay over for application noncash proceeds of disposition under Section 9610 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(d) If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subdivision (a) and permitted by subdivision (c), both of the following apply:

(1) Unless paragraph (4) of subdivision (a) requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus except as provided in Section 701.040 of the Code of Civil Procedure.

(2) Subject to subdivision (b) of Section 9626, the obligor is liable for any deficiency.

(e) (1) If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, both of the following apply:

(A) The debtor is not entitled to any surplus.

(B) The obligor is not liable for any deficiency.

(2) Subdivision (b) of Section 701.040 of the Code of Civil Procedure relating to the payment of proceeds and the liability of the secured party applies only if the security agreement provides that the debtor is entitled to any surplus.

(f) The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been realized in a disposition complying with this chapter to a transferee other than the secured party, a person related to the secured party, or a secondary obligor if both of the following apply:

(1) The transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor.

(2) The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.

(g) The following rules apply with respect to a secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under which the disposition is made:

(1) The secured party takes the cash proceeds free of the security interest or other lien.

(2) The secured party is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien.

(3) The secured party is not obligated to account to or pay the holder of the security interest or other lien for any surplus.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 67. (SB 95) Effective January 1, 2024.)


citation: COM § 9616

text:
(a) In this section:

(1) “Explanation” means a record that contains all of the following:

(A) States the amount of the surplus or deficiency.

(B) Provides an explanation in accordance with subdivision (c) of how the secured party calculated the surplus or deficiency.

(C) States, if applicable, that future debits, credits, charges, including additional credit service charges or interest, rebates, and expenses may affect the amount of the surplus or deficiency.

(D) Provides a telephone number or mailing address from which additional information concerning the transaction is available.

(2) “Request” means a record that is all of the following:

(A) Signed by a debtor or consumer obligor.

(B) Requesting that the recipient provide an explanation.

(C) Sent after disposition of the collateral under Section 9610.

(b) In a consumer-goods transaction in which the debtor is entitled to a surplus or a consumer obligor is liable for a deficiency under Section 9615, the secured party shall do either of the following:

(1) Send an explanation to the debtor or consumer obligor, as applicable, after the disposition and in accordance with both of the following:

(A) Before or when the secured party accounts to the debtor and pays any surplus or first makes demand in a record on the consumer obligor after the disposition for payment of the deficiency.

(B) Within 14 days after receipt of a request.

(2) In the case of a consumer obligor who is liable for a deficiency, within 14 days after receipt of a request, send to the consumer obligor a record waiving the secured party’s right to a deficiency.

(c) To comply with subparagraph (B) of paragraph (1) of subdivision (a), an explanation must provide the following information in the following order:

(1) The aggregate amount of obligations secured by the security interest under which the disposition was made, and, if the amount reflects a rebate of unearned interest or credit service charge, an indication of that fact, calculated as of a specified date in accordance with either of the following:

(A) If the secured party takes or receives possession of the collateral after default, not more than 35 days before the secured party takes or receives possession.

(B) If the secured party takes or receives possession of the collateral before default or does not take possession of the collateral, not more than 35 days before the disposition.

(2) The amount of proceeds of the disposition.

(3) The aggregate amount of the obligations after deducting the amount of proceeds.

(4) The amount, in the aggregate or by type, and types of expenses, including expenses of retaking, holding, preparing for disposition, processing, and disposing of the collateral, and attorney’s fees secured by the collateral which are known to the secured party and relate to the current disposition.

(5) The amount, in the aggregate or by type, and types of credits, including rebates of interest or credit service charges, to which the obligor is known to be entitled and which are not reflected in the amount in paragraph (1).

(6) The amount of the surplus or deficiency.

(d) A particular phrasing of the explanation is not required. An explanation complying substantially with the requirements of subdivision (a) is sufficient, even if it includes minor errors that are not seriously misleading.

(e) A debtor or consumer obligor is entitled without charge to one response to a request under this section during any six-month period in which the secured party did not send to the debtor or consumer obligor an explanation pursuant to paragraph (1) of subdivision (b). The secured party may require payment of a charge not exceeding twenty-five dollars ($25) for each additional response.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 68. (SB 95) Effective January 1, 2024.)


citation: COM § 9617

text:
(a) A secured party’s disposition of collateral after default does all of the following:

(1) Transfers to a transferee for value all of the debtor’s rights in the collateral.

(2) Discharges the security interest under which the disposition is made.

(3) Discharges any subordinate security interest or other subordinate lien.

(b) A transferee that acts in good faith takes free of the rights and interests described in subdivision (a), even if the secured party fails to comply with this division or the requirements of any judicial proceeding.

(c) If a transferee does not take free of the rights and interests described in subdivision (a), the transferee takes the collateral subject to all of the following:

(1) The debtor’s rights in the collateral.

(2) The security interest or agricultural lien under which the disposition is made.

(3) Any other security interest or other lien.

history: (History: Added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.)


citation: COM § 9618

text:
(a) A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after any of the following occurs:

(1) The secondary obligor receives an assignment of a secured obligation from the secured party.

(2) The secondary obligor receives a transfer of collateral from the secured party and agrees to accept the rights and assume the duties of the secured party.

(3) The secondary obligor is subrogated to the rights of a secured party with respect to collateral.

(b) Both of the following rules apply with respect to an assignment, transfer, or subrogation described in subdivision (a):

(1) It is not a disposition of collateral under Section 9610.

(2) It relieves the secured party of further duties under this division.


citation: COM § 9619

text:
(a) In this section, “transfer statement” means a record signed by a secured party stating all of the following:

(1) That the debtor has defaulted in connection with an obligation secured by specified collateral.

(2) That the secured party has exercised its postdefault remedies with respect to the collateral.

(3) That, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral.

(4) The name and mailing address of the secured party, debtor, and transferee.

(b) A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in the statement in any official filing, recording, registration, or certificate of title system covering the collateral. If a transfer statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the official or office shall do all of the following:

(1) Accept the transfer statement.

(2) Promptly amend its records to reflect the transfer.

(3) If applicable, issue a new appropriate certificate of title in the name of the transferee.

(c) A transfer of the record or legal title to collateral to a secured party under subdivision (b) or otherwise is not of itself a disposition of collateral under this division and does not of itself relieve the secured party of its duties under this division.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 69. (SB 95) Effective January 1, 2024.)


citation: COM § 9620

text:
(a) Except as otherwise provided in subdivision (g), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if all of the following conditions are satisfied:

(1) The debtor consents to the acceptance under subdivision (c).

(2) The secured party does not receive, within the time set forth in subdivision (d), a notification of objection to the proposal signed by either of the following:

(A) A person to which the secured party was required to send a proposal under Section 9621.

(B) Any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal.

(3) If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance.

(4) Subdivision (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to Section 9624.

(b) A purported or apparent acceptance of collateral under this section is ineffective unless both of the following conditions are satisfied:

(1) The secured party consents to the acceptance in a signed record or sends a proposal to the debtor.

(2) The conditions of subdivision (a) are met.

(c) For purposes of this section both of the following rules apply:

(1) A debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record signed after default.

(2) A debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record signed after default or the secured party does all of the following:

(A) Sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained.

(B) In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures.

(C) Does not receive a notification of objection signed by the debtor within 20 days after the proposal is sent.

(d) To be effective under paragraph (2) of subdivision (a), a notification of objection must be received by the secured party as follows:

(1) In the case of a person to which the proposal was sent pursuant to Section 9621, within 20 days after notification was sent to that person.

(2) In other cases, in accordance with either of the following:

(A) Within 20 days after the last notification was sent pursuant to Section 9621.

(B) If a notification was not sent, before the debtor consents to the acceptance under subdivision (c).

(e) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Section 9610 within the time specified in subdivision (f) if either of the following conditions has been satisfied:

(1) Sixty percent of the cash price has been paid in the case of a purchase money security interest in consumer goods.

(2) Sixty percent of the principal amount of the obligation secured has been paid in the case of a nonpurchase money security interest in consumer goods.

(f) To comply with subdivision (e), the secured party shall dispose of the collateral within either of the following time periods:

(1) Within 90 days after taking possession.

(2) Within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and signed after default.

(g) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 70. (SB 95) Effective January 1, 2024.)


citation: COM § 9621

text:
(a) A secured party that desires to accept collateral in full or partial satisfaction of the obligation it secures shall send its proposal to all of the following persons:

(1) Any person from which the secured party has received, before the debtor consented to the acceptance, a signed notification of a claim of an interest in the collateral.

(2) Any other secured party or lienholder that, 10 days before the debtor consented to the acceptance, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that satisfied all of the following conditions:

(A) It identified the collateral.

(B) It was indexed under the debtor’s name as of that date.

(C) It was filed in the office or offices in which to file a financing statement against the debtor covering the collateral as of that date.

(3) Any other secured party that, 10 days before the debtor consented to the acceptance, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in subdivision (a) of Section 9311.

(b) A secured party that desires to accept collateral in partial satisfaction of the obligation it secures shall send its proposal to any secondary obligor in addition to the persons described in subdivision (a).

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 71. (SB 95) Effective January 1, 2024.)


citation: COM § 9622

text:
(a) A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures does all of the following:

(1) It discharges the obligation to the extent consented to by the debtor.

(2) It transfers to the secured party all of a debtor’s rights in the collateral.

(3) It discharges the security interest or agricultural lien that is the subject of the debtor’s consent and any subordinate security interest or other subordinate lien.

(4) It terminates any other subordinate interest.

(b) A subordinate interest is discharged or terminated under subdivision (a), even if the secured party fails to comply with this division.


citation: COM § 9623

text:
(a) A debtor, any secondary obligor, or any other secured party or lienholder may redeem collateral.

(b) To redeem collateral, a person shall tender both of the following:

(1) Fulfillment of all obligations secured by the collateral.

(2) The reasonable expenses and attorney’s fees described in paragraph (1) of subdivision (a) of Section 9615.

(c) A redemption may occur at any time before a secured party has done any of the following:

(1) Collected collateral under Section 9607.

(2) Disposed of collateral or entered into a contract for its disposition under Section 9610.

(3) Accepted collateral in full or partial satisfaction of the obligation it secures under Section 9622.


citation: COM § 9624

text:
(a) A debtor or secondary obligor may waive the right to notification of disposition of collateral under Section 9611 only by an agreement to that effect entered into and signed after default.

(b) A debtor may waive the right to require disposition of collateral under subdivision (e) of Section 9620 only by an agreement to that effect entered into and signed after default.

(c) Except in a consumer-goods transaction, a debtor or secondary obligor may waive the right to redeem collateral under Section 9623 only by an agreement to that effect entered into and signed after default.

history: (History: Amended by Stats. 2023, Ch. 210, Sec. 72. (SB 95) Effective January 1, 2024.)


citation: COM § 9625

text:
(a) If it is established that a secured party is not proceeding in accordance with this division, a court may order or restrain collection, enforcement, or disposition of collateral on appropriate terms and conditions.

(b) Subject to subdivisions (c), (d), and (f), a person is liable for damages in the amount of any loss caused by a failure to comply with this division. Loss caused by a failure to comply may include loss resulting from the debtor’s inability to obtain, or increased costs of, alternative financing.

(c) Except as otherwise provided in Section 9628, a person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or other lien on the collateral may recover damages under subdivision (b) for its loss.

(d) A debtor whose deficiency is eliminated under Section 9626 may recover damages for the loss of any surplus. However, in a transaction other than a consumer transaction, a debtor or secondary obligor whose deficiency is eliminated or reduced under Section 9626 may not otherwise recover under subdivision (b) for noncompliance with the provisions of this chapter relating to collection, enforcement, disposition, or acceptance.

(e) In addition to any damages recoverable under subdivision (b), the debtor, consumer obligor, or person named as a debtor in a filed record, as applicable, may recover five hundred dollars ($500) in each case from any of the following persons:

(1) A person that fails to comply with Section 9208.

(2) A person that fails to comply with Section 9209.

(3) A person that files a record that the person is not entitled to file under subdivision (a) of Section 9509.

(4) A person that fails to cause the secured party of record to file or send a termination statement as required by subdivision (a) or (c) of Section 9513.

(5) A person that fails to comply with paragraph (1) of subdivision (b) of Section 9616 and whose failure is part of a pattern, or consistent with a practice, of noncompliance.

(6) A person that fails to comply with paragraph (2) of subdivision (b) of Section 9616.

(f) A debtor or consumer obligor may recover damages under subdivision (b) and, in addition, five hundred dollars ($500) in each case from a person that, without reasonable cause, fails to comply with a request under Section 9210. A recipient of a request under Section 9210 which never claimed an interest in the collateral or obligations that are the subject of a request under that section has a reasonable excuse for failure to comply with the request within the meaning of this subdivision.

(g) If a secured party fails to comply with a request regarding a list of collateral or a statement of account under Section 9210, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.

history: (History: Amended (as to be added by Stats. 1999, Ch. 991) by Stats. 2000, Ch. 1003, Sec. 46. Effective January 1, 2001. Addition and amendment operative July 1, 2001, by Stats. 1999, Ch. 991, Sec. 75, and Stats. 2000, Ch. 1003, Sec. 56.)