The simplest way that I compare real estate statutes (RE) and the Uniform Commercial Code (UCC) is to say,
.. the UCC is to personal property as mortgages/trust deeds are to real property....
. . Although this comparison is inaccurate in the details, as any attorney would recognize, it is a good place to start in understanding both the statutory and practical differences between real estate recording and UCC filing..
. .(Note that the term "mortgages" will be used in this article as shorthand for mortgages and deeds of trust.)
It would be more accurate to say that the security agreement behind each UCC loan transaction is the practical equivalent of the mortgage behind each real estate loan.
Each of these agreements gives one party-the secured party (UCC) or mortgagee (RE)-a security interest in property owned by the other party-the debtor (UCC) or mortgagor (RE)-as collateral for a loan.
The filing of a UCC financing statement and the recording of the mortgage give notice of the lien to the rest of the world.
Here are twelve ways to compare UCC filings with real estate recordings:
1. Real estate is a document recording system
/ UCC is a notice filing system
Both real estate and UCC laws put the public on notice about defined types of transactions, but the ways they do this are very different.
Recording a real estate document means literally that the original document representing the transaction-the deed, mortgage, etc.-is placed in the public record at the recording office. Therefore, anyone who has a need to know about the transaction can read the actual documents in their entirety.
Under the UCC, a financing statement is usually said to be "filed." This financing statement is not the transaction itself, but rather a summary of the transaction intended to notify the public in a general way that the secured party has some kind of lien on specified personal property of the debtor. Anyone who needs to know the details of the actual transaction must contact the secured party, who keeps the security agreement and other documentation in its own private, internal records.
2. Real estate is an asset-based system /
UCC is a liability-based system
The old cliché is that no more real estate is being made; that's an important distinction between real estate law and the UCC...
Each local recording office has under its responsibility a certain area of land each piece of which is identifiable on its records.
Therefore, every document recorded points in some way, direct or indirect, to specific, known parcels of land. Like motor vehicle records (which are personal property not subject to the UCC but to separate state lien laws), we can say that real estate recording systems are asset-based
. . . con'tERNST PUBLISHING REAL ESTATE VS UCC<Click<link<here . . .
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