Priority of Security Interests in Fixtures

The video tutorial explains the priority of purchase money security interests in fixtures, which are personal goods that become part of real estate. It discusses the priority issues that arise during defaults, particularly who gets paid from sale proceeds. The tutorial emphasizes the importance of making a fixture filing before the fixture becomes a permanent part of the property to maintain priority over real estate holders. If the filing is not done, the security interest in the fixture is subordinated to the mortgage holder's interest.

What is a fixture in the context of real estate and security interests?

• A movable asset

• A type of mortgage

• A personal good that becomes part of real estate

• A temporary structure on a property

Why is it important to make a fixture filing in the appropriate government office?

• To ensure the fixture is taxed correctly

• To maintain priority over the real estate holder in case of foreclosure

• To increase the value of the property

• To avoid legal disputes with neighbors

In the event of foreclosure, who gets paid first if a fixture filing was made?

• The previous owner of the property

• The secured party with the fixture filing

• The government

• The real estate holder

What happens if a secured party fails to make a fixture filing?

• The fixture is sold separately from the property

• The fixture is considered a temporary addition

• The fixture is removed from the property

• The security interest in the fixture is subordinated to the mortgage holder

What is the result of a fixture becoming a permanent part of the property without a fixture filing?

• The fixture's security interest is subordinated to the mortgage

• The fixture increases the property's market value

• The fixture is taxed separately

• The fixture is considered a separate entity