Under UCC Article 9, what are "fixtures"?

Under UCC Article 9, what are "fixtures"?

• A. Items that are secured by cash collateral
• B. Goods that have become part of real property
• C. Temporary assets used for collateral
• D. Equipment that can be easily transferred

Answer: (B)

Fixtures are defined under UCC Article 9 as goods that have become part of real property. This means that fixtures are items that were once considered personal property but have been attached or affixed to land or a building in such a way that they are treated as part of the real estate. Common examples include items like light fixtures, heating units, or built-in appliances. This classification is significant in secured transactions because the treatment of a security interest in fixtures differs from that in personal property. When a lender takes a security interest in a fixture, they must often perfect that interest in accordance with real estate laws. This ensures that the priority of the lender’s claim to the fixture is clear if the property is sold or if there is a default. Other options relate to different types of property or collateral and do not accurately capture the definition of fixtures as outlined in UCC Article 9. For example, cash collateral refers to security posted in cash rather than physical items attached to real estate. Temporary assets and movable equipment do not fit within the established criteria for fixtures since they do not indicate a permanent attachment to real property.

Fixtures are defined under UCC Article 9 as goods that have become part of real property. This means that fixtures are items that were once considered personal property but have been attached or affixed to land or a building in such a way that they are treated as part of the real estate. Common examples include items like light fixtures, heating units, or built-in appliances.

This classification is significant in secured transactions because the treatment of a security interest in fixtures differs from that in personal property. When a lender takes a security interest in a fixture, they must often perfect that interest in accordance with real estate laws. This ensures that the priority of the lender’s claim to the fixture is clear if the property is sold or if there is a default.

Other options relate to different types of property or collateral and do not accurately capture the definition of fixtures as outlined in UCC Article 9. For example, cash collateral refers to security posted in cash rather than physical items attached to real estate. Temporary assets and movable equipment do not fit within the established criteria for fixtures since they do not indicate a permanent attachment to real property.