A prior mortgage on the real estate where the fixtures are located may take priority over a security interest in fixtures in some cases. Before closing any loan transaction involving fixtures, the Bank should search the Real Property Records in the Office of the County Clerk in the county where the real estate is located to identify any possible conflicting security interest. The searches should be made under the names of the borrower and any other owners or persons in possession of the real estate.
Form UCC-11 will not work for this lien search. A title or abstract company can obtain a list of conflicting interests. Bank Counsel should be consulted if the Bank is financing only fixtures and is not obtaining a policy of title insurance for the real property where the fixtures are or will be located.