Okla. Stat. tit. 12A § 1-9-604

Current through Laws 2024, c. 453.

Section 1-9-604 - Procedure if security agreement covers real property or fixtures

(a) If a security agreement covers both personal and real property, a secured party may proceed:

(1) under this part as to the personal property without prejudicing any rights with respect to the real property; or

(2) as to both the personal property and the real property in accordance with the rights with respect to the real property, in which case the other provisions of this part do not apply.

(b) Subject to subsection (c) of this section, if a security agreement covers goods that are or become fixtures, a secured party may proceed:

(1) under this part; or

(2) in accordance with the rights with respect to real property, in which case the other provisions of this part do not apply.

(c) Subject to the other provisions of this part, if a secured party holding a security interest in fixtures has priority over all owners and encumbrances of the real property, the secured party, after default, may remove the collateral from the real property.

(d) A secured party that removes collateral shall promptly reimburse any encumbrancer or owner of the real property, other than the debtor, for the cost of repair of any physical injury caused by the removal. The secured party need not reimburse the encumbrancer or owner for any diminution in value of the real property caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.

Okla. Stat. tit. 12A, § 1-9-604

Added by Laws 2000 , SB 1519, c. 371, § 111, eff. 7/1/2001.

Oklahoma Code Comment

New section 9-604 combines portions of former sections 9-501(4) and 9-313(8) , addressing the impact of real property and fixture laws upon Article 9 enforcement proceedings.

New section 9-604(a) correlates to former section 9-501(4) , addressing security agreements covering both personal and real property collateral, and continues the practice of permitting the secured party to pursue its rights against the personal property collateral under revised Article 9 or in accordance with Oklahoma real property law, and making clear that the secured party does not prejudice its rights against the real estate if it elects to exercise its Article 9 rights against the personal property. New section 9-604(b) mirrors that provision for security agreements covering goods that are or become fixtures. For a discussion of practical reasons impacting decisions to proceed under real property law, see John. P. Roberts, Remedies Under Revised Article 9: Impact of Mixed Real and Personal Property Collateral and the Public, Private and Judicial Sale of Collateral, 55 Consumer Fin. L.Q. Rep. ____(2001) (forthcoming).

Section 9-604(c) and (d) deal with the removal by a secured party of fixture collateral. These provisions come directly from former section 9-313(8) . New section 9-604(c) permits the secured creditor to remove a fixture from the real property after default but only if (1) the creditor will not breach the peace in doing so, (2) the creditor's interest has priority over the competing interest of any owner or other encumbrancer of the real property (see new section 9-334 for these new priority rules), and (3) the creditor promptly reimburses under section 9-604(d) any person other than the debtor for costs of repair of physical injury to the real estate occasioned by the removal (but not including diminution in value of the real estate caused by the absence of the fixture or the need to replace it).