Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                         CHAPTER 31-H.F.No. 937 
           An act relating to commerce; uniform commercial code; 
          providing a 20-day notice period for certain fixture 
          filings; amending Minnesota Statutes 1988, section 
          336.9-313. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 336.9-313, is 
amended to read: 
     336.9-313 [PRIORITY OF SECURITY INTERESTS IN FIXTURES.] 
    (1) In this section and in the provisions of part 4 of this 
article referring to fixture filing, unless the context 
otherwise requires 
    (a) goods are "fixtures" when they become so related to 
particular real estate that an interest in them arises under 
real estate law. 
    (b) a "fixture filing" is the filing in the office where a 
mortgage on the real estate would be filed or recorded of a 
financing statement covering goods which are or are to become 
fixtures and conforming to the requirements of subsection (5) of 
section 336.9-402 except in the case of a fixture filing by a 
transmitting utility, which shall be governed by subsection (5) 
of section 336.9-401. 
    (c) a mortgage is a "construction mortgage" to the extent 
that it secures an obligation incurred for the construction of 
an improvement on land including the acquisition cost of the 
land, if the recorded writing so indicates. 
    (2) A security interest under this article may be created 
in goods which are fixtures or may continue in goods which 
become fixtures, but no security interest exists under this 
article in ordinary building materials incorporated into an 
improvement on land. 
    (3) This article does not prevent creation of an 
encumbrance upon fixtures pursuant to real estate law. 
    (4) A perfected security interest in fixtures has priority 
over the conflicting interest of an encumbrancer or owner of the 
real estate where 
    (a) the security interest is a purchase money security 
interest, the interest of the encumbrancer or owner arises 
before the goods become fixtures, the security interest is 
perfected by a fixture filing before the goods become fixtures 
or within ten 20 days thereafter, and the debtor has an interest 
of record in the real estate or is in possession of the real 
estate; or 
    (b) the security interest is perfected by a fixture filing 
before the interest of the encumbrancer or owner is of record, 
the security interest has priority over any conflicting interest 
of a predecessor in title of the encumbrancer or owner, and the 
debtor has an interest of record in the real estate or is in 
possession of the real estate; or 
    (c) the fixtures are readily removable factory or office 
machines or readily removable replacements of domestic 
appliances which are consumer goods, and before the goods become 
fixtures the security interest is perfected by any method 
permitted by this article; or 
    (d) the conflicting interest is a lien on the real estate 
obtained by legal or equitable proceedings after the security 
interest was perfected by any method permitted by this article. 
    (5) A security interest in fixtures, whether or not 
perfected, has priority over the conflicting interest of an 
encumbrancer or owner of the real estate where 
    (a) the encumbrancer or owner has consented in writing to 
the security interest or has disclaimed an interest in the goods 
as fixtures; or 
    (b) the debtor has a right to remove the goods as against 
the encumbrancer or owner.  If the debtor's right terminates, 
the priority of the security interest continues for a reasonable 
time. 
    (6) Notwithstanding paragraph (a) of subsection (4) but 
otherwise subject to subsections (4) and (5), a security 
interest in fixtures is subordinate to a construction mortgage 
recorded before the goods become fixtures if the goods become 
fixtures before the completion of the construction.  To the 
extent that it is given to refinance a construction mortgage, a 
mortgage has this priority to the same extent as the 
construction mortgage. 
    (7) In cases not within the preceding subsections, a 
security interest in fixtures is subordinate to the conflicting 
interest of an encumbrancer or owner of the related real estate 
who is not the debtor. 
    (8) When the secured party has priority over all owners and 
encumbrancers of the real estate, the secured party may, on 
default, subject to the provisions of part 5, remove collateral 
from the real estate but the secured party must reimburse any 
encumbrancer or owner of the real estate who is not the debtor 
and who has not otherwise agreed for the cost of repair of any 
physical injury, but not for any diminution in value of the real 
estate caused by the absence of the goods removed or by any 
necessity for replacing them.  A person entitled to 
reimbursement may refuse permission to remove until the secured 
party gives adequate security for the performance of this 
obligation. 
    Presented to the governor April 12, 1989 
    Signed by the governor April 14, 1989, 3:11 p.m.