Legal Question in Real Estate Law in California

Re: Ucc-1

First, "UCC" is an abbreviation for the Uniform Commercial Code. That is a law governing business transactions such as sales, leases, banking transactions and the like, which has been adopted with minor state-to-state variations in all (? I think) of the states of the U.S., and because of its near-uniformity, greatly facilities interstate business trasnactions.

One of its features is that is sets up a system for perfecting security interests in goods that have been (for example) sold on credit, or that have been pledged as collateral for other purposes such as securing an indebtedness of any kind.

The UCC-1 is a simple form, usually one page, that can be filled out by the creditor and filed with the Secretary of State's office in Sacramento (or other state where the debtor is situated) to give public notice of the existence of a lien on goods and some other types of property, created by a security agreement between the debtor and creditor. A UCC-1 filing is appropriate for liens on most kinds of personal property including merchandise, machinery, and intangible property such as stocks and bonds or money in an account. It is not appropriate for perfecting a security interest in articles where title and lien info is registered with another agency, e.g. motor vehicles (the DMV handles these), railroad rolling stock (the Surface Transportation Board is where the security agreement should be recorded), or real property (this is handled by the county recorder).

You can view, download or fill in a UCC-1 on line at the Secretary of State's Web site, www.ss.ca.gov - then click on the business and UCC options. I think they are working on putting the UCC filing system on line, but as of now I think you have to mail in the UCC-1 with a small filing fee.

The entire subject of creating and enforcing security interests in personal property is a huge area of the law, and this discussion doesn't even scratch the surface, so if you have a legal issue in this area, I strongly advise consulting a business lawyer with experience in secured transactions.