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I own a direct sales company in Texas, we sell CONSUMER

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I own a direct sales...
I own a direct sales company in Texas , we sell CONSUMER GOODS , specifically water filters (Point of use and whole house water filters) We also finance our own contracts.We will start filing a fixture lien (NOT a mechanical lien ) whenever the customer becomes delinquent in their payments in order to cloud the customer's title in their homestead property .Our Retail Installment contract's language has the correct wording that will allow us to file the UCC-1 FORM
"Security interest: To protect us , you give us a purchase money security interest created under the UCC or other applicable law in the property sold and described under description of purchase"What I need from you is the following:1. The exact by law code that details the EXACT TIME FRAME that my company has to file the fixture lien once we make the sale?2. The exact by law code that details What are the requirements that the fixture filing must meet?3. The exact by law code that details What are the requirements that the products that we are selling to the customers must must meet in order to qualified them as an item for the fixture lien?4. If the retail sales contract is in the name of the wife, the products were installed on that property , but the property belongs to the husband and the husband did no sign the contract , can my do the UCC1 Filing anyways since the wife can create liability to the husband and our products are in his house?5. Once a customer becomes delinquent with his/her payment, we will be sending the following notice: (Please make the appropriate additions or corrections if any in order to fully comply with the law)"xxxx, Inc DBA xxxx Finance has filed a UCC “Fixture” filing (Uniform Commercial Code) to perfect our security interest in the collateral on your loan. The UCC may affect your ability to sell your property or to refinance your existing mortgage on your residence, therefore the title of your property has been clouded until your outstanding balance with xxxxInc, Inc. is fully satisfied, we urge you to take immediate attention in this matter in order for you to have a clean title of your property, once you pay the outstanding balance we will taking the necessary steps in order to withdraw the UCC “Fixture” filing that we had to file in order to perfect our security interest in the collateral on your loan"
Submitted: 7 months ago.Category: Business Law
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Answered in 9 minutes by:
11/15/2017
Business Lawyer: Ely, Attorney replied 7 months ago
Ely
Ely, Attorney
Category: Business Law
Satisfied Customers: 103,582
Experience: Counselor at Law.
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Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. You may also be offered a phone call, but those don’t come from me and are offered by the website and you are under no obligation to accept.

1. The exact by law code that details the EXACT TIME FRAME that my company has to file the fixture lien once we make the sale?

UCC-1 is not a lien. It is a "Financing Statement," which makes you a secured creditor. But because it functions, much like a lien, many people call it a "UCC1 lien." But it is not, just so you know.

2. The exact by law code that details What are the requirements that the fixture filing must meet?

Under Tex. Bus. & Commerce Code Ch. 9 and other relevant statutes, there is no time frame. However, the first person to file UCC-1 gets ahead of anyone else who files a UCC1 against the same chattel/real estate. Ergo, the rule of thumb is the sooner, the better.

3. The exact by law code that details What are the requirements that the products that we are selling to the customers must must meet in order to qualified them as an item for the fixture lien?

The code does not give much in the way of the description. In short, the description has to be "reasonably applicable" to the property, and as clear as possible. Depending on the situation, this can vary a lot. See HERE for an explanation and common verbiage used.

4. If the retail sales contract is in the name of the wife, the products were installed on that property , but the property belongs to the husband and the husband did no sign the contract , can my do the UCC1 Filing anyways since the wife can create liability to the husband and our products are in his house?

It can, but it may not "stick." The state does not challenge the UCC1. Only the party who owns the property can challenge it. If you contract with A and A does not own the property, but B does, then it would not be proper to file a UCC1 on B's property. Even if A and B are married (this can be modified by a divorce matter, but I am assuming this will not happen here).

5. Once a customer becomes delinquent with his/her payment, we will be sending the following notice: (Please make the appropriate additions or corrections if any in order to fully comply with the law) ...

It looks fine. There is no specific code under Texas law that applies to a collection letter - one which mentions a UCC1 filing, or not.

"I STRIVE FOR FIVE!" My goal is to answer your question to your satisfaction. Please rate with five stars (★★★★★) and click SEND. It does not cost anything extra to rate. You may need to scroll left/right/up/down to see these stars. Rating my answer the bottom two stars or failing to submit the rating reflects poorly on me, even if my answer is correct. If you are not satisfied for whatever reason, or, have follow up questions, please simply reply with SEND before or after rating and let's continue to chat until you are satisfied. This is what I am here for.

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Customer reply replied 7 months ago
Thank you Ely for your reply ,
Please make a note of the following:Question #1
I need EXACT BY LAW CODE that details the EXACT TIME FRAME that my company has in order to file the UCC-1 once we make the sale?Question #2
I need the EXACT BY LAW CODE that details What are the requirements that the fixture filing must meet?
Please provide the specific answer to my question.Question #3
The EXACT BY LAW CODE that details What are the REQUIREMENTS that the products that we are selling to the customers must meet in order to qualified them as an item for the fixture lien?
*Thank you for the link that you sent , however , it doesn't mention what I am asking .
Business Lawyer: Ely, Attorney replied 7 months ago

You are most welcome.

I need EXACT BY LAW CODE that details the EXACT TIME FRAME that my company has in order to file the UCC-1 once we make the sale?

There is no such code. You are asking for what does not exist. See HERE. The rule of thumb is to file the UCC-1 ASAP after the contract is signed.

I need the EXACT BY LAW CODE that details What are the requirements that the fixture filing must meet?

You mean how to file the UCC1? See HERE for full instructions.

The EXACT BY LAW CODE that details What are the REQUIREMENTS that the products that we are selling to the customers must meet in order to qualified them as an item for the fixture lien?

It does. However, if that link does not work for you, allow me to explain on here. What you are describing is called collateral description. Tex. Business & Commerce Code Sec. 9-108(a) contains the general rule, which is that a description is sufficient if it "reasonably identifies" the collateral. Subsection (b) states that a collateral description reasonably identifies the collateral if it uses any of the following methods: (1) specific listing, (2) category, (3) type of collateral defined in Article 9 (such as "accounts," "goods," "general intangibles" and the like), (4) quantity, (5) computational or allocational formula or procedure, or (6) any other method by which the identity of the collateral is objectively determinable. So this allows a WIDE ARRAY of description possibilities. You simply have to be clear and reasonable in your description.

Kind Reminder: Please, use SEND button to keep chatting, or please rate positively and click SEND to submit your rating once satisfied. You may always ask follow ups at no charge before or after rating. "I STRIVE FOR FIVE!"

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Customer reply replied 7 months ago
Q#1 EXACT BY LAW CODE that details the EXACT TIME FRAME
You replied : "There is no such code. You are asking for what does not exist. See HERE."
I clicked the link and after reading I found this:
Sec. 9.334. (D)
(3) the security interest is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter.
Is this correct? (Does the code exist or not? Please confirmSo we don't get to0 confused here, I will see your other answers once I am 100% clear on the first one.
Thank you
Business Lawyer: Ely, Attorney replied 7 months ago
That applies to fixtures only. Water filters are not a fixture unless they cannot be taken out of the property without damage.
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Customer reply replied 7 months ago
INITIALLY I wrote: we sell CONSUMER GOODS , specifically water filters (Point of use and WHOLE HOUSE WATER FILTERS)
You Replied: That applies to fixtures only. Water filters are not a fixture unless they cannot be taken out of the property without damage.
Sec. 9.334. (D)
(3) the security interest is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter.
This 20 days apply or not?If you can please answer the EXACT BY LAW CODE that details What are the REQUIREMENTS that the products that we are selling to the customers must meet in order to qualified them as an item for the fixture lien? The answer will help you and me with the correct answer to the question above. Thank you
Business Lawyer: Ely, Attorney replied 7 months ago

Let us step back a bit.

A fixture means any physical property that is permanently attached (fixed) to real property. Anything else is called chattel. So an affixed AC unit is normally a fixture. A table is chattel.

Perfected means that that the security instrument (UCC 1 statement) is effective.

In general, there is no time frame to perfect a UCC1.

You site the following statute: "Except as otherwise provided in Subsection (h), a perfected security interest in fixtures has priority over the conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property and:

(1) the security interest is a purchase-money security interest;

(2) the interest of the encumbrancer or owner arises before the goods become fixtures; and

(3) the security interest is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter." This deals with conflicting interests of multiple interest holders. This does not apply here, as I am guessing whatever item you list in the UCC-1 will have clear title by the owner.

So we go back to our original rule, which is that there is no time frame to perfect (record) a UCC1, but the sooner, the better.

Kind Reminder: Please, use SEND button to keep chatting, or please rate positively and click SEND to submit your rating once satisfied. You may always ask follow ups at no charge before or after rating. "I STRIVE FOR FIVE!"

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Customer reply replied 7 months ago
After further reviewing , Section 9.334 applies only to CROPS. Is this correct?
Business Lawyer: Ely, Attorney replied 7 months ago

No, incorrect. CROPS and FIXTURES.

Kind Reminder: Please, use SEND button to keep chatting, or please rate positively and click SEND to submit your rating once satisfied. You may always ask follow ups at no charge before or after rating. "I STRIVE FOR FIVE!"

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Customer reply replied 7 months ago
Then , If the whole house water filters are NOT fixtures , 1.We cannot file the UCC1 from , 2.all my questions are irrelevant and 3.all your answers do not applied. Keeping in mind that I was very specific at the begging of my communication detailing to you that we sell WHOLE HOUSE WATER FILTERS.
Business Lawyer: Ely, Attorney replied 7 months ago

You are confusing the issues. You can still file UCC1 on non-fixtures and non-crops. It is just that Section 9.334 applies to certain fixtures and crops when dealing with UCC1 statements.

You brought up Section 9.334, not me. It has nothing to do with your situation.

Kind Reminder: Please, use SEND button to keep chatting, or please rate positively and click SEND to submit your rating once satisfied. You may always ask follow ups at no charge before or after rating. "I STRIVE FOR FIVE!"

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Customer reply replied 7 months ago
Ely: "Water filters are not a fixture unless they cannot be taken out of the property without damage"
After spending a lot of time on this issue , I just found out the a whole house water system are in fact a fixture.
http://caselaw.findlaw.com/tx-court-of-appeals/1763510.html
Business Lawyer: Ely, Attorney replied 7 months ago

Not necessarily. Fixtures and chattel are decided on a case by case basis.

"Water filter" can mean a simple filter under the faucet, or, it can mean a whole house system. You never explained what your product was.

The rule of thumb is that if it can be taken out without damage to the property and was never meant to be permanent, then it is chattel. Otherwise, it is a fixture. It is on a case by case basis. So you decide what LIKELY your product will be, and then decide whether that statute applies or not.

Kind Reminder: Please, use SEND button to keep chatting, or please rate positively and click SEND to submit your rating once satisfied. You may always ask follow ups at no charge before or after rating. "I STRIVE FOR FIVE!"

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Customer reply replied 7 months ago
14 November 2017 08:47
INITIALLY I wrote: we sell CONSUMER GOODS , specifically water filters (Point of use and WHOLE HOUSE WATER FILTERS)
Business Lawyer: Ely, Attorney replied 7 months ago

Right. Unfortunately, that does not tell me much since I am not in the business and do not know what what means until you explain it. Thank you for providing that explanation.

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Customer reply replied 7 months ago
I am sorry , I cannot go back and forth . I explained to you on my first communication (11/16/17 @ 02:31) what my product was.
I will not leave a negative review but I will be asking for a refund.
Thank you
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