Personal property subject to a security interest can be repossessed by a creditor or collections agent if the debtor violates or defaults on the terms of the loan. In this case, the creditor can take repossession of the collateral named as part of the security agreement. The creditor does not have to file a lawsuit or receive the permission of the court to do this, and, as long as the creditor does not violate any laws in recovering the property, it can do so whenever it chooses.
The Uniform Commercial Code (UCC), provides for the lender to retain a security interest in the personal property or chattel until the lender is paid in full. The security interest is available to the lender even though the chattel is installed in real property e.g. your sign. The security interest is created by an instrument called a Security Agreement. Your contract identifying the payments and the collateral may be sufficient.
You also need a financing statement (although the security agreement may suffice).
You would then file a financing statement along with the security agreement in the office of the County Recorder or Secretary of State. This filing provides constructive notice to all the world that a security interest exists in the personal property that is the subject of the security agreement. As a result, the attached item does not become a fixture or a part of the real estate. Consequently, if the buyer/borrower defaults in payment, the lender can remove the article of personal property even though it has been attached to real property.
You contract may suffice as a security agreement if the parties and collateral are completely defined. In a security agreement, the purpose of the collateral description is to unambiguously identify the property in which the secured party holds an interest. This is intended to allow someone to get the specific property if needed.
A financing statement is sufficient if it gives the names of the debtor and the secured party, is signed by the debtor, gives an address of the secured party from which information concerning the security interest may be obtained, gives a mailing address of the debtor and contains a statement indicating the types, or describing the items, of collateral.
the reason you cannot remove the sign is becasue the sign is not yours without an interest. You can get a judgment in small claims to get the sign. In the future you need to create a secured interst in your property so you can repossess in case of default.
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This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.
Edited by Jack R. on 10/1/2010 at 3:07 AM EST