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Landlord Tenant Law Regulation

Drawing the Line Between Real Property and Personal Property In the UCC

The back-and-forth is certainly confusing, but what is clear is that it can be unclear exactly where the line between real property and personal property should be drawn.

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UCC §9-109 sets forth the scope of UCC Article 9. Under that section, “any transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract” is governed by Article 9, subject to certain exceptions. Included among those exceptions is any “creation or transfer of an interest in or lien on real property, including a lease or rents thereunder.” UCC §9-109(d)(11). This exclusion is itself subject to an exception in the event of enforcement — that being as to security agreements that cover both personal and real property. UCC §9-604. The back-and-forth is certainly confusing, but what is clear is that it can be unclear exactly where the line between real property and personal property should be drawn.

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