Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process.
Recent laws may not yet be included in the ILCS database, but they are found on this site as
Public
Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the
Guide.
Because the statute database is maintained primarily for legislative drafting purposes,
statutory changes are sometimes included in the statute database before they take effect.
If the source note at the end of a Section of the statutes includes a Public Act that has
not yet taken effect, the version of the law that is currently in effect may have already
been removed from the database and you should refer to that Public Act to see the changes
made to the current law.
(810 ILCS 5/9-334)
Sec. 9-334.
Priority of security interests in fixtures and crops.
(a) Security interest in fixtures under this Article. A security
interest under this Article may be created in goods that are fixtures or may
continue
in goods that become fixtures. A security interest does not exist under this
Article
in ordinary building materials incorporated into an improvement on land.
(b) Security interest in fixtures under real-property law. This
Article does not prevent creation of an encumbrance upon fixtures under real
property law.
(c) General rule: subordination of security interest in fixtures.
In cases not governed by subsections (d) through (h), a security interest in
fixtures
is subordinate to a conflicting interest of an encumbrancer or owner of the
related
real property other than the debtor.
(d) Fixtures purchase-money priority. Except as otherwise
provided in subsection (h), a perfected security interest in fixtures has
priority over
a conflicting interest of an encumbrancer or owner of the real property if the
debtor
has an interest of record in or is in possession of the real property and:
(1) the security interest is a purchase-money |
|
(2) the interest of the encumbrancer or owner arises
|
| before the goods become fixtures; and
|
|
(3) the security interest is perfected by a fixture
|
| filing before the goods become fixtures or within 20 days thereafter.
|
|
(e) Priority of security interest in fixtures over interests in real
property. A perfected security interest in fixtures has priority over a conflicting
interest of an encumbrancer or owner of the real property if:
(1) the debtor has an interest of record in the real
|
| property or is in possession of the real property and the security interest:
|
|
(A) is perfected by a fixture filing before the
|
| interest of the encumbrancer or owner is of record; and
|
|
(B) has priority over any conflicting interest of
|
| a predecessor in title of the encumbrancer or owner;
|
|
(2) before the goods become fixtures, the security
|
| interest is perfected by any method permitted by this Article and the fixtures are readily removable:
|
|
(A) factory or office machines;
(B) equipment that is not primarily used or
|
| leased for use in the operation of the real property; or
|
|
(C) replacements of domestic appliances that are
|
|
(3) the conflicting interest is a lien on the real
|
| property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this Article; or
|
|
(4) the security interest is:
(A) created in a manufactured home in a
|
| manufactured-home transaction; and
|
|
(B) perfected pursuant to a statute described in
|
|
(f) Priority based on consent, disclaimer, or right to remove. A
security interest in fixtures, whether or not perfected, has priority over a
conflicting
interest of an encumbrancer or owner of the real property if:
(1) the encumbrancer or owner has, in an
|
| authenticated record, consented to the security interest or disclaimed an interest in the goods as fixtures; or
|
|
(2) the debtor has a right to remove the goods as
|
| against the encumbrancer or owner.
|
|
(g) Continuation of subsection (f)(2) priority. The priority of the
security interest under subsection (f)(2) continues for a reasonable time if
the debtor's
right to remove the goods as against the encumbrancer or owner terminates.
(h) Priority of construction mortgage. A mortgage is a
construction mortgage to the extent that it secures an obligation incurred for the
construction of an improvement on land, including the acquisition cost of the land,
if a recorded record of the mortgage so indicates. Except as otherwise
provided in
subsections (e) and (f), a security interest in fixtures is subordinate to a
construction
mortgage if a record of the mortgage is recorded before the goods become
fixtures
and the goods become fixtures before the completion of the construction. A
mortgage has this priority to the same extent as a construction mortgage to the
extent that it is given to refinance a construction mortgage.
(i) Priority of security interest in crops.
(1) Subject to Section 9-322(g), a perfected security
|
| interest in crops growing on real property has priority over:
|
|
(A) a conflicting interest of an encumbrancer or
|
| owner of the real property; and
|
|
(B) the rights of a holder of an obligation
|
| secured by a collateral assignment of beneficial interest in a land trust, including rights by virtue of an equitable lien.
|
|
(2) For purposes of this subsection:
(A) "Collateral assignment of beneficial
|
| interest" means any pledge or assignment of the beneficial interest in a land trust to a person to secure a debt to other obligation.
|
|
(B) "Land trust" means any trust arrangement
|
| under which the legal and equitable title to real estate is held by a trustee, the interest of the beneficiary of the trust is personal property, and the beneficiary or any person designated in writing by the beneficiary has (i) the exclusive power to direct or control the trustee in dealing with the title to the trust property, (ii) the exclusive control of the management, operation, renting, and selling of the trust property, and (iii) the exclusive right to the earnings, avails, and proceeds of trust property.
|
|
(Source: P.A. 91-893, eff. 7-1-01.)
|