Law Governing Perfection and Priority of Security Interests

  1. Law
  2. Georgia Code
  3. Commercial Code
  4. Secured Transactions
  5. Perfection and Priority
  6. Law Governing Perfection and Priority of Security Interests

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Except as otherwise provided in Code Sections 11-9-303 through 11-9-306, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:

  1. Except as otherwise provided in this Code section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral;
  2. While collateral is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a possessory security interest in that collateral;
  3. Except as otherwise provided in paragraph (4) of this Code section, while tangible negotiable documents, goods, instruments, money, or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:
    1. Perfection of a security interest in the goods by filing a fixture filing;
    2. Perfection of a security interest in timber to be cut;
    3. Perfection of a security interest in crops; and
    4. The effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral; and
  4. The local law of the jurisdiction in which the wellhead or minehead is located governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in as-extracted collateral.

(Code 1981, §11-9-301, enacted by Ga. L. 2001, p. 362, § 1; Ga. L. 2010, p. 481, § 2-23/HB 451.)

The 2010 amendment, effective May 27, 2010, inserted "tangible" in the middle of the introductory language of paragraph (3). See the Editor's notes for applicability.

Editor's notes.

- Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010.

Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010.

JUDICIAL DECISIONS

Editor's notes.

- In the light of the similarity of the provisions, decisions under former Article 9 are included in the annotations for this Code section. For a table of comparable provisions, see the table at the beginning of the Article.

Failure to perfect after relocation of debtor.

- Since the security interest was not perfected upon transfer of debtor's corporate offices to Georgia, the security interest was deemed unperfected upon the expiration of four months after the relocation to Georgia. United States v. Specialty Contracting & Supply, Inc., 140 Bankr. 922 (Bankr. N.D. Ga. 1992) (decided under former Code Section 11-9-103).

Transfer of collateral.

- Former Code Section 11-9-407(7), not former paragraph (3)(e) of this Code section was applicable when a debtor had transferred collateral encumbered by a security interest to another debtor. NCNB Nat'l Bank v. Major Leasing, Inc., 140 Bankr. 826 (Bankr. N.D. Ga. 1991) (decided under former Code Section 11-9-103).

RESEARCH REFERENCES

C.J.S.

- 79 C.J.S., Secured Transactions, § 88 et seq.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 9-301.


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