Fixtures as Collateral?

You can borrow against almost anything. Sandwiched in the gray area between “real estate” and “personal property” is something called a fixture. A fixture is something you can buy and attach to real estate or a house, like an air conditioner. 

Origin Title sees a few cases like this every year:  the homeowner had a Uniform Commercial Code filing, or UCC Fixture filed against them for an air conditioner. This means the homeowner used the air conditioner as collateral for the loan. If they default on the loan, the company can come and essentially repossess the air conditioner. It’s a pain, but it can be removed from the house. 

UCC filings have to be paid in full when refinancing or selling the house, just like a mortgage. 

John C. Bennett is a real estate closing attorney and owner of Origin Title and Escrow, Inc.. Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.