Legal Question in Real Estate Law in Virginia
UCC security interest
is there a priority in secured interests for assets secured under the UCC for attaching personal property enclosed within the premises of the lease. For example, if there is a Commercial Line of Credit using those same assets for collateral in place at the time of lease signing, who has first rights to the assests if the leasee defaults.
1 Answer from Attorneys
Re: UCC security interest
The priority of any SI of the personal property is first determined by asking whether there was a loan made for the purchase of that property. That would be a PMSI and such a lender would have super priority over the property. If the property was simply used as collateral for a loan, and no PMSI, AND there was perfection by UCC filing, such a lender would have priority over any unsecured creditor, such as a leassor. So to summarize priority: 1. Creditor with PMSI if one exists, 2. Secured Creditor - granting line of credit using property for collateral 3. Unsecured creditor - leassor.
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