O.C.G.A. § 11-9-502 (2019)
Contents of financing statement; record of mortgage as fixture filing or financing statement; time of filing financing statement
(a) Sufficiency of financing statement. Subject to subsection (b) of this Code section, a financing statement is sufficient only if it: (1) Provides the name of the debtor; (2) Provides the name of the secured party or a representative of the secured party; (3) Indicates the collateral covered by the financing statement; and
(4) Where both (A) the collateral described consists only of consumer goods as defined in paragraph (24) of subsection (a) of Code Section 11-9-102 and (B) the secured obligation is originally $5,000.00 or less, gives the maturity date of the secured obligation or specifies that such obligation is not subject to a maturity date. (b) Real property related financing statements. Except as otherwise provided in subsection (b) of Code Section 11-9-501, to be sufficient, a financing statement that covers as-extracted collateral, growing crops, or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy subsection (a) of this Code section and also: (1) Indicate that it covers this type of collateral; (2) Indicate that it is to be filed for record in the real property records; (3) Provide a description of the real property to which the collateral is related sufficient to give constructive notice of a mortgage under the law of this state if the description were contained in a record of the mortgage of the real property; and (4) If the debtor does not have an interest of record in the real property, provide the name of a record owner. (c) Record of mortgage as fixture filing or financing statement. A record of a mortgage filed prior to January 1, 1995, which was effective as a fixture filing when recorded remains effective as a fixture filing, and a record of a mortgage recorded on or after July 1, 2013, is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if: (1) The record indicates the goods or accounts that it covers; (2) The goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut; (3) The record satisfies the requirements for a financing statement in this Code section, but: (A) The record need not indicate that it is to be filed in the real property records; and (B) The record sufficiently provides the name of a debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom paragraph (4) of subsection (a) of Code Section 11-9-503 applies; and
(4) The record is duly recorded. (d) Filing before security agreement or attachment. A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.
History
Code 1981, § 11-9-502, enacted by Ga. L. 2001, p. 362, § 1; Ga. L. 2002, p. 995, § 7; Ga. L. 2013, p. 690, § 10/SB 185.
Annotations
Editor’s notes. Ga. L. 2002, p. 995, § 8, not codified by the General Assembly, provides that: “This Act shall become effective July 1, 2002, and shall apply to a letter of credit that is issued on or after July 1, 2002. This Act does not apply to a transaction, event, obligation, or duty arising out of or associated with a letter of credit that was issued before July 1, 2002.” Law reviews. For article discussing Uniform Commercial Code provisions establishing a security interest in fixtures as a means of protecting sellers, see 16 Mercer L. Rev. 404 (1965). For article discussing the Uniform Commercial Code provisions regarding the sufficiency of “The Description of Collateral in Security Agreements and Financing
Statements,” see 28 Mercer L. Rev. 611 (1977). For article, “The Revisions to Article IX of the Uniform Commercial Code,” see 15 Ga. St. B.J. 120 (1977). For article, “Fixture Financing Under Georgia’s New Article 9,” see 16 Ga. St. B.J. 110 (1980). For article, “H.B. 712: New Requirements for Financing Statements and Continuation Statements Filed in Georgia,” see 22 Ga. St. B.J. 6 (1985). For article, “H.B. 1364: Revised Requirements for Financing Statements and Continuation Statements Filed in Georgia,” see 23 Ga. St. B.J. 50 (1986). For annual survey of law of real property, see 38 Mercer L. Rev. 319 (1986). For annual survey article on commercial law, see 50 Mercer L. Rev. 193 (1998). For comment on United States v. Crittenden, 563, F.2d 678 (5th Cir. 1977), see 12 Ga. L. Rev. 692 (1977).
JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Article 9 are included in the annotations for this Code section. For a table of comparable provisions, see the table at the beginning of the Article. Applicability to financing statements, not security agreements. - Requirement that identification of collateral indicate type of collateral is applicable to financing statements, not security agreements. Personal Thrift Plan of Perry, Inc. v. Georgia Power Co., 242 Ga. 388, 249 S.E.2d 72, 1978 Ga. LEXIS 1223 (1978) (decided under former Code 1933, § 109A-9-302). “Type” of collateral construed. - This section allowed a secured party to file a financing statement which describes the property only by its “type.” A type of collateral is, for example, goods, accounts, chattel paper, general intangibles, etc.
Woodrum v. Ford Motor Credit Co., 940 F.2d 1507, 1991 U.S. App. LEXIS 20890 (11th Cir. 1991) (decided under former Code Section 11-9-402). Serial number alone does not “indicate the type” of collateral. Personal Thrift Plan of Perry, Inc. v. Georgia Power Co., 242 Ga. 388, 249 S.E.2d 72, 1978 Ga. LEXIS 1223 (1978) (decided under former Code 1933, § 109A-9-302). Question of fact as to whether financing statement seriously misleading. - In a suit involving the defendant defaulting on loans secured by property that was allegedly tortuously converted by sale, the grant of summary judgment to the plaintiff was reversed, in part, because an issue of material fact remained as to whether the financing statement was valid as to the name provided on the financing statement and whether the incorrect name made the statement seri-
ously misleading. Rebel Auction Co. v. Citizens Bank, 343 Ga. App. 81, 805 S.E.2d 913, 2017 Ga. App. LEXIS 451 (2017). Movant was not entitled to adequate protection or, in the alternative, relief from automatic stay because the bankruptcy court questioned the validity of the movant’s liens under Georgia law as the movant’s financing statement did not comply with the law in that the name on the financing statement did not match the debtor’s name on the driver’s license of the debtor. Furthermore, the movant’s financing statement was so seriously misleading as to render it ineffective. In re Bryant, 630 B.R. 671, 2021 Bankr. LEXIS 1528 (Bankr. M.D. Ga. 2021). Security interest not perfected. - Where a search of the county records did not reveal a financing statement due to a mistake in the name of the debtor shown on the financing statement, the security interest in the funds relating to the financing statement was not perfected, and the money was awarded to a judgment creditor in an interpleader action. Receivables Purchasing Co. v. R & R Directional Drilling, L.L.C., 263 Ga. App. 649, 588 S.E.2d 831, 2003 Ga. App. LEXIS 1284 (2003). Because an attorney who handled a closing in the capacity of an escrow agent for the client’s business had no actual or constructive notice of a creditor’s security interest in the business due to the improper filing pursuant to O.C.G.A. §§ 119-502, 11-9-503, and 11-9-506, because the debtor’s name was not properly listed and the interest was accordingly not perfected,
claims as to conversion of the business closing proceeds failed. All Bus. Corp. v. Choi, 280 Ga. App. 618, 634 S.E.2d 400, 2006 Ga. App. LEXIS 669 (2006), cert. denied, No. S06C2098, 2006 Ga. LEXIS 1016 (Ga. Nov. 20, 2006). Perfection of security interest in the debtor’s accounts receivable granted under the agreements was not properly perfected because neither of the two elements required for perfection by Georgia law was met: first, the debtor’s name as listed in the financing statement was inconsistent with its legal name on the public record, and moreover, a search of Georgia Superior Court Clerks’ Cooperative Authority’s Lien records for the debtor’s correct name would not have disclosed the financing statement’s existence; second, the financing statement did not indicate that the statement covered all assets or all personal property of the debtor, and the statement failed to provide a description of, or reasonably identify, the debtor’s accounts receivable subject to the security interest. Scarver v. Silverline Servs. (In re Wastetech, LLC), 605 B.R. 264, 2019 Bankr. LEXIS 1713 (Bankr. N.D. Ga. 2019). Defendant’s financing statement was seriously misleading, making the financing statement ineffective under O.C.G.A. § 11-9-506(c) because the debtor’s name on the financing statement was seriously misleading, and a search done with the filing office’s standard search logic would not have disclosed the defendant’s financing statement. AgGeorgia Farm Credit, ACA v. Wynn (In re Wynn), 627 B.R. 192, 2021 Bankr. LEXIS 883 (Bankr. M.D. Ga. 2021).
OPINIONS OF THE ATTORNEY GENERAL Editor’s notes. - In light of the similarity of the statutory provisions, opinions under former Article 9 are included in the annotations for this Code section. For a table of comparable provisions, see the table at the beginning of the Article. Duty of superior court clerks. -
Clerks of superior court are not required to determine that property subject to a U.C.C. financing statement is properly described before recording the statement. 1982 Op. Att’y Gen. No. U82-38 (decided under former Article 9).
RESEARCH REFERENCES Am. Jur. 2d. 68A Am. Jur. 2d, Secured Transactions,
§§ 32, 192 et seq., 310, 311, 329 et seq., 352-354, 365, 395.
C.J.S. 76 C.J.S., Records, § 4. U.L.A. Uniform Commercial Code (U.L.A.) § 9502. ALR. What amounts to a conditional sale, 17 A.L.R. 1421; 43 A.L.R. 1247; 92 A.L.R. 304; 175 A.L.R. 1366. Violation of statute as to form of, or terms to be included in, conditional sale contract, as invalidating entire transaction or merely its effect to reserve title in vendor, 144 A.L.R. 1103. Priority as between federal tax lien and mortgage to secure future advances or expenditures by mortgagee, 90 A.L.R.2d 1179. Sufficiency of description of crops under UCC §§ 9-203(1)(b) and 9-402(1), 67 A.L.R.3d 308; 100 A.L.R.3d 10; 100 A.L.R.3d 940. Sufficiency of designation of debtor or secured party in security agreement or
financing statement under UCC § 9-402, 99 A.L.R.3d 478. Sufficiency of address of debtor in financing statement required by UCC § 9402(1), 99 A.L.R.3d 807. Sufficiency of address of secured party in financing statement required under UCC § 9-402(1), 99 A.L.R.3d 1080. Effectiveness of original financing statement under UCC Article 9 after change in debtor’s name, identity, or business structure, 99 A.L.R.3d 1194. Sufficiency of secured party’s signature on financing statement or security agreement under UCC § 9-402, 100 A.L.R.3d 390. Sufficiency of debtor’s signature on security agreement or financing statement under UCC §§ 9-203 and 9-402, 3 A.L.R.4th 502. Choice of State Law Governing Perfection of Security Interest or Agricultural Lien Under Revised Article 9 of Uniform Commercial Code, 39 A.L.R.7th Art. 3.