Service Area: Collection Services

Iowa Lien Attached to Building, Not Lessor’s Property

Posted on July 12, 2019 by - In Other Commercial Credit News

Who Is Responsible for The Costs Associated with The Construction of The Facility, The Lessor, Lessee or Both?

In Iowa, the Lien Attached to the Building, Not the Lessor’s Property

A lessor owns the real property, signs a 50-year lease with the lessee and the lessee builds a facility on the leased property. Who is responsible for the costs associated with the construction of the facility, the lessor, lessee or both? According to the Iowa Supreme Court, the costs are the responsibility of the lessee, which means the liens can only attach to the lessee’s building and not the real property.

The Case Before the Iowa Supreme Court

Cargill, Incorporated (Cargill) signed a 50-year lease with HF Chlor-Alkali, LLC (HF). Cargill owned the land and the lease was established to permit HF to build a manufacturing facility on the property. HF hired general contractors, who in turn hired multiple subcontractors and suppliers to build the facility. All construction contracts were made with HF – no one contracted with Cargill – and HF owned the building.

What happens next is no surprise: parties in the ladder of supply weren’t paid for the construction of the facility. Mechanic’s liens were filed, and the lien claimants pursued foreclosure actions.

Cargill objected to the foreclosure of the liens against its property and argued the liens could only attach to the building owned by HF and not the property owned by Cargill. Cargill’s argument relied on the 2007 and 2012 statute changes.

The Iowa Supreme Court agreed with Cargill.

Iowa’s 2007 & 2012 Statute Changes Made the Difference

Iowa modified its mechanic’s lien laws in 2007 & again in 2012. These legislative updates included a refined definition of “owner.” Here’s a quick recap from R. Zachary Torres-Fowler in his recent article, The Lessor of Two Evils: Iowa Supreme Court Holds That Mechanic’s Liens Will Not Attach to the Property of a Lessor for Work Authorized by a Lessee.

“…in 2007, the Iowa legislature removed contracts with ‘the owner’s agent’ as a basis for permitting a mechanic’s lien to attach to the owner’s property.  In 2012, the Iowa legislature further revised the mechanic’s lien statute to narrow the definition of ‘owner’ to exclude persons ‘for whose use or benefit any . . . improvement is made.’”

Iowa statute dictates a lien is available “Every person who furnishes…by virtue of any contract with the owner, owner-builder, general contractor, or subcontractor shall have a lien upon such building or improvement…” So, what does that mean for Cargill? The contracts weren’t with Cargill; thus, Cargill’s property is not subject to the lien. Because HF contracted for and owns the building, the lien can only attach to the building.

What Does this Mean for You?

This should be a warning to those furnishing to potential lessor/lessee situations. Don’t assume mechanic’s lien rights will extend to the property; rights may only be available on the leasehold interest, or as in this case, the building on the property.

Each state handles these situations differently and sometimes statute defers to the language within the contract between the lessor/lessee. You may recall a New York case we reviewed in April, in which the property owner was liable for the construction costs, because the lease specifically required the tenant to make the electrical improvements.

Review your contracts, review property ownership, review the lease whenever possible, and always seek a legal opinion.

Seriously Misleading UCC Filing. Can You Solve the Mystery?

Posted on June 24, 2019 by - UCC Financing Statements

Seriously Misleading UCC Filing. Can You Solve the Mystery?

Who enjoys a good ol’ mystery game? Today’s mystery is why a Georgia Bankruptcy Court deemed one creditor’s UCC filing seriously misleading, thus making the creditor’s security interest unperfected. First, we’ll go through the facts of the case, then review the requirements under Article 9, and then the big reveal: why was the UCC seriously misleading!

Facts of Case: In re Wastetech, LLC, Bankr. Court, ND Georgia 2019

In 2017, the debtor executed six agreements granting a secured interest to the creditor. The six agreements were executed on the following dates in 2017: June 13, July 6, July 19, August 3, August 18, and September 26.

The Debtor’s Name Change

Smack in the middle of these six agreements, on July 27, 2017, the debtor changed its name from NTC Waste Group, LLC to Wastetech, LLC.

The Creditor’s UCC Filing

On November 14, 2017, the creditor filed a UCC-1 Financing Statement. The creditor identified the debtor on the Financing Statement as NTC Waste Group, LLC. Within the Financing Statement, the creditor also provided the following collateral description:

“Certain future receivables sold by said business seller and purchased by Crown Funding Group, Inc., as buyer, pursuant to that certain purchase and sale of future receivables agreement between seller and purchaser dated 8/7/2017 (the “agreement”).”

Timeline of Pertinent Events seriously misleading timeline of events

The Debtor Files for Bankruptcy & Trustee Begins the Search

February 13, 2018, the debtor filed for bankruptcy protection. After the bankruptcy filing, the bankruptcy trustee set out to identify the creditors with UCC filings in place.

The trustee searched for UCC filings by two variations of the debtor’s current name: “Wastetech” and “Wastetech, LLC”. The trustee’s searches did not reveal any UCC filings. The trustee then submitted to the court that it also searched by the debtor’s former name (NTC Waste Group, LLC), which did reveal a UCC filing. Searching got a bit technical, here’s an excerpt from the court decision:

“… the Trustee recently conducted several UCC index searches through the GSCCCA database using the Debtor’s correct name as well as its former name… According to the Affidavit, statewide “searches using the search terms `Wastetech’ or `Wastetech LLC’ did not lead to finding the Financing Statement.” Only searches using the former name of the Debtor produced the Financing Statement.”

But wait, there’s more! The trustee was certainly thorough.

“Further searches conducted using the standard search logic in the Debtor’s name through the GSCCCA database in the Coweta County UCC Index along with a stem search for the Debtor’s name also failed to return the Financing Statement, though UCC-1’s for another entity were disclosed. Finally, additional statewide stem searches using the Debtor’s name did not disclose the Financing Statement. Based on these results, the Trustee through counsel states that ‘a search of the Coweta County UCC Index, and the Georgia Statewide UCC Index, using a debtor name stem search in the GSCCCA database for the Debtor’s correct legal name of record did not disclose the Financing Statement.’”

No Safe Harbor

The search type described above was to prove the creditor’s Financing Statement didn’t appear under the “single exception” aka safe harbor. (The single exception, according to the court decision, is “a search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic” which would disclose such financing statement.”)

Corporate Search & Public Organic Record Are Not the Same

The creditor argued “…that a search of the UCC records under “NTC” did produce the Financing Statement, and that a search of “wastetech” in the records of the Georgia Corporations Division led to Wastetech LLC, which was formerly known as NTC Waste Group, LLC…”

Yes, you read that correctly “Georgia Corporations Division” (a corporate search, not the public organic record).

The creditor cited several cases regarding effective UCC filings, despite the debtor name being incorrect. Unfortunately for the creditor, the cases cited all related to UCC filings that were filed PRIOR to a debtor’s name change. The creditor also tried to argue that it filed its UCC within 4 months of the debtor’s name change — but that’s not how it works. It appears the creditor wanted the 4 month window under Article 9-507(c) to apply, except that section applies to UCCs filed prior to a name change.

OH, and the Collateral Description

There was an issue with the creditor’s collateral description – which seems minor compared to the flurry of back & forth over the correct name of the debtor. Within the UCC-1 Financing Statement, the collateral description is “certain future receivables sold by said business seller and purchased…” But it did not please the court because the collateral description is specific rather than of a category.

“Had the description been “all future receivables of the Debtor,” it would have met the requirements under Section 11-9-108 by describing the collateral through category.”

The judge is ready to decide. Is the UCC filing seriously misleading?

The judge did not mince words in the decision. The creditor’s UCC filing was seriously misleading, which made the filing ineffective and the security interest unperfected.

“First, the Debtor’s name as listed in the Financing Statement is inconsistent with its legal name on the public record. Moreover, a search of the Georgia Superior Court Clerks’ Cooperative Authority’s Lien records for the Debtor’s correct name would not have disclosed the existence of the Financing Statement. Second, the Financing Statement does not indicate that it covers all assets or all personal property of the Debtor, and it fails to provide a description of, or reasonably identify, the Debtor’s Accounts Receivable that are subject to the Defendant’s security interest. Accordingly, the Financing Statement is seriously misleading, and perfection of the Defendant’s security interest in Debtor’s Accounts Receivable is legally ineffective.”

OK, So Maybe It’s Not a Mystery. Seriously.

I admit, as far as mysteries go this was kind of lame. I mean, given the facts of this case, is it really a mystery that the creditor was left with an ineffective Financing Statement, hanging out with unsecured creditors? Failing to correctly identify the debtor on the Financing Statement, relying on a corporate search versus the public organic record, and providing a poor collateral description? Definitely no mystery. I promise to craft a better mystery next time, until then, don’t be like this creditor!

  • Always identify your customer by their name as it appears in the public organic record
  • Public organic record and a corporate search are NOT the same thing
  • Carefully review your collateral description
  • After filing, conduct a reflective search to confirm the filing has been indexed properly

Mediation or Arbitration, Which Is Best for Your Business?

Posted on June 21, 2019 by - In Other Commercial Credit News

Mediation or Arbitration, Which Is Best for Your Business?

Have you found yourself in a construction dispute, trying to decide whether the dispute warrants trips to court for lawsuit litigation? Have you also wondered whether arbitration or mediation will quell tempers and resolve payment issues, while avoiding costly litigation? Then you may be interested in an article we shared via social media this week: Finding the Right Tool for the Job – Resolving Construction Disputes with Mediation or Arbitration, by Patricia L. Morrison and Theron Davis.

Mediation & Arbitration, We’ve Discussed Before

Mediation and arbitration have appeared in our blog before. In fact, in January we discussed the differences between arbitration, mediation, and lawsuits.

As a quick refresher, mediation and arbitration are two forms of alternative dispute resolution, where a neutral third party is present to facilitate resolutions. What is the primary difference between mediation and arbitration? One allows the third party to issue an enforceable (and appealable) decision regarding the dispute.

In mediation, the third party is there to facilitate discussions, not issue a decision to resolve the dispute; whereas, in arbitration, the third party can issue an enforceable decision to resolve the dispute. It’s important to note, in arbitration the arbitrator’s decision can be appealed, though it’s not commonly done.

While each dispute resolution process has its pros and cons, here are a few more items to consider, as outlined by Morrison & Davis in their article.

1 – Time.

According to Morrison & Davis, mediation tends to be easier and quicker than arbitration. Here’s why arbitration typically takes longer: “…arbitration hearings usually last much longer than mediations, require a considerable amount of planning and preparation, and often include some litigation-type steps such as the exchange of documents, possible examinations for discovery, and the preparation and exchange of expert reports.”

2 – Money.

Based on the amount of time and work that goes into arbitration, it’s not surprising to hear that mediation is often less expensive.

3 – Business Relationship.

This is an excellent point to consider: do you want to preserve the business relationship? “The biggest advantage of mediation over arbitration is that it avoids the adversarial process and, therefore, may preserve the business relationship. If the parties choose to do so, mediation can focus more on the business interests of the parties than on their legal positions. The parties are able to meet in a neutral environment, with an objective mediator, and concentrate on creating a solution to their dispute. The mediator will assist the parties in identifying the strengths and weaknesses of their positions while discovering the underlying interests at the heart of the dispute.”

4 – Control.

Morrison & Davis state that mediation allows for more control over how the dispute is resolved. In mediation, because the third party can’t issue a decision, the two parties must work together to come to resolution – they need to agree upon the resolution. As opposed to arbitration; when the arbitrator issues its decision, it’s quite possible that one or both parties are unhappy with, but bound to, the result.

As you may have noticed, Morrison & Davis seem to prefer mediation over arbitration. I can certainly see why. Mediation appears to be more relaxed/less formal. If I need to resolve a payment issue with my customer, and I don’t want to kill our relationship, I would be inclined to select mediation. I picture arbitration as the solution when my customer is refusing to communicate, making threats to pull business, in other words, kind of being a bully.

Best Practices for Success in Mediation & Life in General

Morrison & Davis provide a solid list of best practices on how to increase the likelihood of successful mediation; here are a few of the highlights:

  • Make an effort to understand the other side’s position
  • Ensure there is sufficient information and be prepared to discuss technical issues
  • Maintain a flexible attitude and open mind about your settlement options

Turns out, these may be excellent best practices for everyday business interactions – even life in general. Catch you next week!

Lien Dissolution Bond and Suit-To-Enforce Action

Posted on June 14, 2019 by - In Other Commercial Credit News

A Quick Story about a Lien Dissolution Bond and Its Trusty Suit-To-Enforce Action

A “lien dissolution bond,” which can be filed to remove mechanic’s liens from a property, is one of many names or phrases given to bonds of this type. Some other names or phrases you may recognize include: bonded off lien, discharge bond, bonding around/over lien, lien prevention bond, transfer bond, and a new one to me, a target lien bond. (Much to my dismay, “target lien bond” has nothing to do with shopping at the infamous Target.)

While today’s post has little to do with my shopping obsessions, it does focus on what happened in one Massachusetts case when the lien claimant took steps to foreclose on the lien dissolution bond.

Massachusetts Statute Allows for Liens to be Dissolved by Filing a Bond

We’ll get the technical aspect out of the way first. Section 14 of G.L. c. 254 (i.e. Massachusetts mechanic’s lien statute) provides that a lien dissolution bond can be filed with the Registry of Deeds to remove a mechanic’s lien filed against a property.

“Any person in interest may dissolve a lien under this chapter by recording or causing to be recorded in the registry of deeds in the county or district where the land lies, a bond of a surety company authorized to do business in Massachusetts and in a penal sum equal to the amount of the lien sought to be dissolved conditioned for the payment of any sum which the claimant may recover on his claim for labor or labor and materials. Upon the recording of the bond, the lien shall be dissolved…”

Section 14 also explains that a notice of the recorded bond and copy of the bond should be provided to the lien claimant whose lien has been dissolved. And, statute states “The claimant may enforce the bond by a civil action commenced within ninety days after the later of the filing of the statement required by section 8 or receipt of notice of recording of the bond, but such bond shall not create any rights which the claimant would not have had, or impair any defense which the obligors would have had, in an action to enforce a lien.”

Section 14 is referring to the deadlines laid out under section 8 for mechanic’s liens. Here are the mechanic’s lien deadlines from The National Lien Digest –

  • File a Statement of Account no later than the earliest of:
    • 90 days from the recording of a Notice of Substantial Completion,
    • 120 days from the recording of a Notice of Termination, or
    • 120 days from the last furnishing of materials or services by the prime contractor or the subcontractor.
  • File suit to enforce the lien within 90 days from filing the Statement of Account.

In other words, a claimant can proceed with suit to enforce the lien dissolution bond within the same deadlines as they would for a mechanic’s lien: 90 days from the date the lien was filed.

Yikes, That’s A Lot of Technical. What about the Case?

I know – the downside to some of these cases is the crazy technicalities that need to be explained prior to getting to the good stuff. So, on to the good stuff!

The question before the court was “if a claimant proceeds with suit against the bond, are they required to record an attested copy of their complaint?” Because the mechanic’s lien statute states an “attested copy” of the suit action must be recorded with the Registry of Deeds.

The short answer? Nope.

According to an article by Kevin Mortimer and Samuel Tony Starr, the surety is the party that contested the court’s decision.

“…when the supplier/lienholder filed a timely enforcement action against the subcontractor and bond surety, the surety moved for summary judgment—arguing that the lienholder had failed to comply with the strict requirements of Section 14 by failing to record an attested to copy of its complaint with the Registry of Deeds.”

And the lower court sided with the surety. But, what good is a case that isn’t appealed?

Upon appeal, the Supreme Judicial Court overturned the earlier decision, because the language within statute does not state there is a requirement for recordation of an attested copy. In fact, the court compared the lack of language in section 14 to the inclusion of language in section 12.

Essentially: if the statute wanted an attested copy to be recorded, it would have said so.

But wait, there’s more. The surety argued that an attested copy should be recorded to notify other parties of the suit, even if they are non-parties to the action.

“…the Court acknowledged the surety’s valid concern that many entities, including the general contractor and other subcontractors, may have an interest in knowing about a lien dissolution bond’s enforcement action. The surety asserted that since such entities are not named as parties to the action, they would not receive service, and therefore would not have knowledge of it.”

Perhaps We Will See New Legislation?

Well, it’s certainly possible. When the court acknowledged the surety’s concern about notifying interested parties of the suit action, it made a footnote comment that may be fortuitous “Any resolution of this issue, however, is for the Legislature.” So, it’s possible that new legislation may develop from this case.

You can read the court opinion here: City Electric Supply Co. v. Arch Insurance Co.

Fiber Optic Networks: Can I File a Mechanic’s Lien?

Posted on June 7, 2019 by - In Other Commercial Credit News

Fiber Optic Networks: Can I File a Mechanic’s Lien?

Lienability. One of the many questions we are asked is “Can I file a mechanic’s lien on that?” Or, if we must relay the unfortunate news that an improvement isn’t lienable, we are then asked, “Why can’t I lien that?” Determining what is or isn’t lienable might be the only task that can be just as confusing as the lien laws themselves.

In early 2017 we discussed an Illinois case that left a subcontractor unpaid to the tune of $3M and without the remedy of a mechanic’s lien. In that case it was the construction of a wind turbine, which the court deemed as a trade fixture. and declared mechanic’s liens filed on the property as invalid.

Wind and solar farms are often questionable when it comes to rights under mechanic’s lien statutes, but they aren’t alone. Some electrical work, excavation for pipelines, and even installation of fiber optic technology, also face a questionable fate under mechanic’s lien statutes.

Fiber Optic Technology and Mechanic’s Liens (in Ohio)

Technology shows no sign of slowing down, in fact it will likely increase at the speed of fiber optic technology…

[Do you hear the echoes, see the lightning strikes, and me sporting dark sunglasses in a snappy black suit?!]

OK, so my humor is a bit lame, but, it’s an entertaining way to segue to whether the installation of fiber optic networks is lienable.

First, what do we know about the typical fiber optics network? They can be massive. Much like wind farms, solar farms, and pipelines, fiber optic networks cover multiple parcels – sometimes within multiple counties or even states.

“An optical network—a data communication network built with fiber optic technology—uses a series of optical fiber cables, placed on properties typically owned by someone other than the network provider and spread out over a large geographic area. An operator connects and operates this network from real property known as an exchange, which the provider typically owns or leases.” Nick Pieczonka, author of Mechanics’ Lien Law and Work Performed on Optical Networks

In his article, Pieczonka goes on to answer two critical questions: “Can a lien attach to the property owned or leased by the network provider, even though the contractor performed no physical labor at the property?” and “How are work orders treated and what impact does that have?” The second question is interesting, but I want to focus on the first: can a lien attach to the property.

According to Pieczonka, the answer is yes. Yes, a lien can attach to the property, because the work benefits the entire network. Here’s his answer:

“The end user, not the optical network provider, generally performs work on optical networks on property it owns. So can a lien attach to the optical network provider’s real property—which houses the network’s exchange—even though no work took place on that property? The answer appears to be yes. For example, Ohio’s Revised Code §1311.08 provides, in pertinent part:

[W]here work or labor has been performed or material has been furnished for improvements which are located on separate tracts or parcels of land but operated as an entire plant or concern, and erected under one general contract, the lien for the labor or work performed or material furnished attaches to all such improvements, together with the land upon, around, or in front of which such labor or work is performed or material is furnished…

As a result, because the contractor’s work benefits the entire network and the provider operates the network at an exchange it owns or leases, the lien may attach to the entire improvement, including the exchange itself…  Indeed, the network provider’s lease, ownership documents, or master contract with the contractor may describe the network and the land being improved (i.e., the entire network or the exchange), which would also support the proposition that the lien can attach to the network provider’s exchange…”

It’s important to note, Pieczonka is referring to Ohio statute – as we know, each state’s law is different. But wow – this is huge!

Fiber Optic? Take Note!

There are a few things to keep in mind, if you are providing services similar to those described above:

  • Be prepared for expensive title work (you may have to identify each parcel & the owner of each parcel)
  • Multiple liens may be required
  • You may encounter easements, which could lead to a question of lien priority
  • The lien may be limited to the leasehold interest (depending on the state statute)

Let’s Talk About Commercial Bankruptcy

Posted on June 3, 2019 by - Credit Risk Management, Mechanic's Liens & Bond Claims, UCC Financing Statements

Let’s Talk About Commercial Bankruptcy: The More You Know, the Greater Your Chance at Preserving Your Rights as a Secured Creditor

The more you understand about commercial bankruptcy and the bankruptcy process, the greater chance of preserving your rights as a secured creditor and ultimately receiving payment.

Refresher: What’s a Secured Creditor?

A secured creditor has a security interest over some or all of the assets of its debtor. This status can be achieved and maintained through a variety of credit tools such as Mechanic’s Liens, Bond Claims and UCC filings.

In the event of the debtor’s bankruptcy or default, secured creditors have payment priority over their unsecured counterparts, significantly improving the likelihood of getting paid.

The Breakdown: Chapter 7 vs. Chapter 11

In Chapter 7 bankruptcy, the debtor ceases operations, its assets are liquidated by an appointed Trustee, and the funds are used to pay the outstanding debt.

In Chapter 11 Bankruptcy, the debtor wants to continue operating. The debtor will undergo significant structural changes and arrange to pay its creditors over a set period of time.

The Bankruptcy Proof of Claim

As a creditor, it’s important you take the proper steps to protect your interest. Depending on the type of commercial bankruptcy your customer has filed, you may be required to file a Proof of Claim with the bankruptcy court by the specified date, also known as the bar date.

As per the United States Bankruptcy Court, a Proof of Claim is “a written statement and verifying documentation filed by a creditor that describes the reason the debtor owes the creditor money.” This document is critical because it provides proof to the court that your claim amount is valid and owed, as well as what class to associate your claim with.

Generally, this document will include:

  • Debtor name
  • Case number
  • Creditor information, including mailing address
  • Claim amount
  • Basis for the claim
  • Type of claim (secured or unsecured)
  • Supporting documentation

In the event of Chapter 7 bankruptcy, you must file a timely proof of claim in order to share in any distribution of funds. The bar date refers to a date, established by the bankruptcy court and based on a variety of factors, by which the proof of claim must be filed. Often, creditors fail to submit the document in time and suffer the consequence of an invalid claim. Whether your claim amount is secured or unsecured, be sure to meet the stated deadline to preserve your rights and maximize any potential distribution.

In a Chapter 11 proceeding, it’s typically unnecessary for a creditor to file a Proof of Claim. This is because the debtor is required to file a Schedule of Assets and Liabilities, which formally lists its creditors’ claim amounts. However, filing a Proof of Claim is recommended if:

  • The claim amount is listed incorrectly on the Schedule of Assets & Liabilities or,
  • The claim amount is defined as designated, unliquidated or contingent

In these cases, if a Proof of Claim is not filed, the bankruptcy court will deem the information on the Schedule of Assets & Liabilities as correct and distribute the funds accordingly.

If your debtor has recently filed for bankruptcy, it’s critical to act quickly and take the necessary steps to validate your claim amount. Immediately determine the type of bankruptcy preceding you’re dealing with and whether you should complete a Proof of Claim form. If filing, be sure the document is accurate and ON TIME.

We Can Help

Don’t risk an invalid claim and losing out on payment distribution. Let NCS assist in preparing, filing and monitoring your bankruptcy Proof of Claim today. Contact us for more information!

Arizona Preliminary Notice Changes Coming December 2019!

Posted on May 24, 2019 by - In Other Commercial Credit News, Preliminary Notices & Construction Credit

Arizona Preliminary Notice Changes Coming December 2019!

We are often asked, “Do I have to serve an amended notice if my contract amount increases?” and, “If so, how much does my contract have to increase to warrant another notice?” Generally, we recommend serving an amended notice when your contract amount increases by 20% or more. This recommendation is based on case law, attorney recommendations, and specific statute, e.g., Arizona.

In fact, Arizona’s current statute specifically states a claimant only needs to serve one preliminary notice, unless its contract amount increases by 20% or more, then the claimant should amend its notice.

“A person required by this section to give notice…need give only one notice…unless the actual estimated total price for the labor, professional services, materials, machinery, fixtures or tools furnished or to be furnished exceeds by twenty per cent or more the total price in any prior original or subsequent preliminary notice…”

Soon “30″ Will Be the New “20″ in Arizona!

Earlier this month the Governor of Arizona signed HB1304 which updates the requirement for when an amended notice is required. For any projects where first furnishing occurs on or after 12/31/19, an amended notice will only be required if the contract amount increases by 30% or more.

“Effective for any projects where furnishings are first commenced to be furnished from and after 12-31-19, an additional notice will be required if the estimated total price for the furnishings exceeds by 30% or more the total price in a prior notice under the same contract.” – Legislative Update from The National Lien Digest

What Does This Mean for You?

Currently, under Arizona statute, if your original contract amount is $100,000 and a change order is issued increasing your contract to $120,000 (increased by 20%), you are required to serve an amended preliminary notice.

Here’s what it will look like at the end of December:

Arizona statute as of 12/31/19

Once the new statute is in effect, you may notice a decrease in the number of required amended notices; saving you time & money.

Always Perform A Reflective UCC Search

Posted on May 20, 2019 by - UCC Financing Statements

Always Perform a Reflective UCC Search: Especially on Your Recent Pennsylvania UCC Filings with Attachments

You should always perform a reflective search on each UCC filing to ensure your filing was indexed correctly. Through a reflective search you are likely to quickly catch errors in the spelling of a party name, and in the case of Pennsylvania, quickly identify when attachments aren’t recorded with the filing.

While performing a reflective UCC search on a Pennsylvania filing, our UCC Specialist identified issues with Pennsylvania’s records: attachments weren’t included with the recorded UCC filings.

Red Alert

You can imagine the potential issue with your UCC filing if your collateral description refers to an attachment, and the attachment isn’t attached.

Upon discovering the error, our UCC Specialist contacted the Pennsylvania Department of State and alerted them of the issue. In response, the Pennsylvania Department of State corrected the issue and then released a statement regarding the missing attachments. You can read the Pennsylvania Department of State’s statement via The National Law Review: Pennsylvania Bureau Notifies Filers of the Loss of Attachments Submitted with UCC Records

Here’s Jerry Bailey with the recap:

If you have questions or need assistance with searches, please contact us!