Okla. Stat. tit. 12A § 1-9-703

Current through Laws 2024, c. 453.

Section 1-9-703 - Security interest perfected before effective date

(a) A security interest that is enforceable immediately before this act takes effect and would have priority over the rights of a person that becomes a lien creditor at that time is a perfected security interest under this act if, when this act takes effect, the applicable requirements for enforceability and perfection under this act are satisfied without further action.

(b) Except as otherwise provided in Section 1-9-705 of this title, if, immediately before this act takes effect, a security interest is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for enforceability or perfection under this act are not satisfied when this act takes effect, the security interest:

(1) is a perfected security interest for one (1) year after this act takes effect;

(2) remains enforceable thereafter only if the security interest becomes enforceable under Section 1-9-203 of this title before the year expires; and

(3) remains perfected thereafter only if the applicable requirements for perfection under this act are satisfied before the year expires.

Okla. Stat. tit. 12A, § 1-9-703

Added by Laws 2000 , SB 1519, c. 371, § 137, eff. 7/1/2001.

Oklahoma Code Comment

Revised section 9-703 provides that enforceability and perfection of a security interest (in the sense it is good against a lien creditor) that is valid under old Article 9 automatically carries over if what was done satisfies revised Article 9. If not, then there is a one year grace period to comply with revised Article 9. For example, perfection of a security interest in a letter of credit right under current law is by possession of the credit, but under revised Article 9 control is required, such as by consent to the assignment by the issuer or nominated person (revised section 9-107 ) .

Another example might involve a pre-effective date security agreement in a consumer transaction that covers "all securities accounts." That security interest is properly perfected as the collateral description is adequate under former Article 9. See former section 9-115(3) . But this description is insufficient under revised Article 9. See section 9-108(e)(2) . Unless the debtor authenticates a new security agreement describing the collateral other than by "type" within the one-year period following the effective date, the security interest becomes unenforceable at the end of that period.

Sections 9-702 and 9-703 state the overall general rule, but are subject to section 9-705 .

See also Oklahoma Comment to revised section 9-702 .