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This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Tue, Feb 24, 2009 at 12:07 PM by rday. --> 1
8 LONG TITLE
9 General Description:
10 This bill enacts the Utah Uniform Assignment of Rents Act.
11 Highlighted Provisions:
12 This bill:
13 . defines terms;
14 . allows a security interest in rents to accrue prior to foreclosure as an interest that is
15 distinct from any lien on the property which produces the rents;
16 . makes the assignment of rents effective against third persons upon proper
18 . establishes standards to govern the appointment of a receiver for mortgaged real
20 . characterizes rents as any sum paid by a tenant, licensee, or other person for the
21 right to possess or occupy the real property of another;
22 . permits an assignee to enforce its security interest in rents through proper
24 . allows a mortgage to create a security interest in rents by default;
25 . clarifies that the assignee's ability to collect rents from tenants is subject to any
26 claim or defense by the tenant of the assignee's nonperformance; and
27 . coordinates with Article 9 of the Uniform Commercial Code regarding proceeds of
29 Monies Appropriated in this Bill:
31 Other Special Clauses:
33 Utah Code Sections Affected:
35 57-26-101, Utah Code Annotated 1953
36 57-26-102, Utah Code Annotated 1953
37 57-26-103, Utah Code Annotated 1953
38 57-26-104, Utah Code Annotated 1953
39 57-26-105, Utah Code Annotated 1953
40 57-26-106, Utah Code Annotated 1953
41 57-26-107, Utah Code Annotated 1953
42 57-26-108, Utah Code Annotated 1953
43 57-26-109, Utah Code Annotated 1953
44 57-26-110, Utah Code Annotated 1953
45 57-26-111, Utah Code Annotated 1953
46 57-26-112, Utah Code Annotated 1953
47 57-26-113, Utah Code Annotated 1953
48 57-26-114, Utah Code Annotated 1953
49 57-26-115, Utah Code Annotated 1953
50 57-26-116, Utah Code Annotated 1953
51 57-26-117, Utah Code Annotated 1953
52 57-26-118, Utah Code Annotated 1953
53 57-26-119, Utah Code Annotated 1953
55 Be it enacted by the Legislature of the state of Utah:
56 Section 1. Section 57-26-101 is enacted to read:
58 57-26-101. Title.
60 Section 2. Section 57-26-102 is enacted to read:
61 57-26-102. Definitions.
62 As used in this chapter:
63 (1) "Assignee" means a person entitled to enforce an assignment of rents.
64 (2) "Assignment of rents" means a transfer of an interest in rents in connection with an
65 obligation secured by real property located in this state and from which the rents arise.
66 (3) "Assignor" means a person that makes an assignment of rents or the successor
67 owner of the real property from which the rents arise.
68 (4) "Cash proceeds" means proceeds that are money, checks, deposit accounts, or the
70 (5) "Day" means calendar day.
71 (6) "Deposit account" means a demand, time, savings, passbook, or similar account
72 maintained with a bank, savings bank, savings and loan association, credit union, or trust
74 (7) "Document" means information that is inscribed on a tangible medium or that is
75 stored on an electronic or other medium and is retrievable in perceivable form.
76 (8) "Notification" means a document containing information that this chapter requires a
77 person to provide to another, signed by the person required to provide the information.
78 (9) "Person" means an individual, corporation, business trust, estate, trust, partnership,
79 limited liability company, association, joint venture, public corporation, government, or
80 governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
81 (10) "Proceeds" means personal property that is received or collected on account of a
82 tenant's obligation to pay rents.
83 (11) "Purchase" means to take by sale, lease, discount, negotiation, mortgage, pledge,
84 trust deed, lien, security interest, issue or reissue, gift, or any other voluntary transaction
85 creating an interest in property.
86 (12) "Rents" means:
87 (a) sums payable for the right to possess or occupy, or for the actual possession or
88 occupation of, real property of another person;
89 (b) sums payable to an assignor under a policy of rental interruption insurance covering
91 (c) claims arising out of a default in the payment of sums payable for the right to
92 possess or occupy real property of another person;
93 (d) sums payable to terminate an agreement to possess or occupy real property of
94 another person;
95 (e) sums payable to an assignor for payment or reimbursement of expenses incurred in
96 owning, operating and maintaining, or constructing or installing improvements on, real
97 property; or
98 (f) any other sums payable under an agreement relating to the real property of another
99 person that constitute rents under law of this state other than this chapter.
100 (13) "Secured obligation" means an obligation the performance of which is secured by
101 an assignment of rents.
102 (14) "Security instrument" means a document, however denominated, that creates or
103 provides for a security interest in real property, whether or not it also creates or provides for a
104 security interest in personal property.
105 (15) "Security interest" means an interest in property that arises by agreement and
106 secures performance of an obligation.
107 (16) "Sign" means, with present intent to authenticate or adopt a document:
108 (a) to execute or adopt a tangible symbol; or
109 (b) to attach to or logically associate with the document an electronic sound, symbol, or
111 (17) "State" means a state of the United States, the District of Columbia, Puerto Rico,
112 the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction
113 of the United States.
114 (18) "Submit for recording" means to submit a document complying with applicable
115 legal standards, with required fees and taxes, to the appropriate governmental office under Title
116 57, Chapter 3, Recording of Documents.
117 (19) "Tenant" means a person that has an obligation to pay sums for the right to
118 possess or occupy, or for possessing or occupying, the real property of another person.
119 Section 3. Section 57-26-103 is enacted to read:
120 57-26-103. Manner of giving notification.
122 notification or a copy of a notification under this chapter:
123 (a) by depositing it with the United States Postal Service or with a commercially
124 reasonable delivery service, properly addressed to the intended recipient's address as specified
125 in Subsection (2), with first-class postage or cost of delivery provided for; or
126 (b) if the recipient agreed to receive notification by facsimile transmission, electronic
127 mail, or other electronic transmission, by sending it to the recipient in the agreed manner at the
128 address specified in the agreement.
129 (2) The following rules determine the proper address for giving a notification under
130 Subsection (1):
131 (a) A person giving a notification to an assignee shall use the address for notices to the
132 assignee provided in the document creating the assignment of rents, but, if the assignee has
133 provided the person giving the notification with a more recent address for notices, the person
134 giving the notification shall use that address.
135 (b) A person giving a notification to an assignor shall use the address for notices to the
136 assignor provided in the document creating the assignment of rents, but, if the assignor has
137 provided the person giving the notification with a more recent address for notices, the person
138 giving the notification shall use that address.
139 (c) If a tenant's agreement with an assignor provides an address for notices to the tenant
140 and the person giving notification has received a copy of the agreement or knows the address
141 for notices specified in the agreement, the person giving the notification shall use that address
142 in giving a notification to the tenant. Otherwise, the person shall use the address of the
143 premises covered by the agreement.
144 (3) If a person giving a notification pursuant to this chapter and the recipient have
145 agreed to the method for giving a notification, any notification must be given by that method.
146 (4) If a notification is received by the recipient, it is effective even if it was not given in
147 accordance with Subsection (1) or (3).
148 Section 4. Section 57-26-104 is enacted to read:
149 57-26-104. Security instrument creates assignment of rents -- Assignment of rents
150 creates security interest.
151 (1) An enforceable security instrument creates an assignment of rents arising from the
154 (2) An assignment of rents creates a presently effective security interest in all accrued
155 and unaccrued rents arising from the real property described in the document creating the
156 assignment, regardless of whether the document is in the form of an absolute assignment, an
157 absolute assignment conditioned upon default, an assignment as additional security, or any
158 other form. The security interest in rents is separate and distinct from any security interest held
159 by the assignee in the real property.
160 Section 5. Section 57-26-105 is enacted to read:
161 57-26-105. Recordation -- Perfection of security interest in rents -- Priority of
162 conflicting interests in rents.
163 (1) A document creating an assignment of rents may be submitted for recording in the
164 office of the county recorder for the county in which the property is situated in the same
165 manner as any other document evidencing a conveyance of an interest in real property.
166 (2) Upon recording, the security interest in rents created by an assignment of rents is
167 fully perfected, even if a provision of the document creating the assignment or law of this state
168 other than this chapter would preclude or defer enforcement of the security interest until the
169 occurrence of a subsequent event, including a subsequent default of the assignor, the assignee's
170 obtaining possession of the real property, or the appointment of a receiver.
171 (3) Except as otherwise provided in Subsection (4), a perfected security interest in rents
172 takes priority over the rights of a person that, after the security interest is perfected:
173 (a) acquires a judicial lien against the rents or the real property from which the rents
174 arise; or
175 (b) purchases an interest in the rents or the real property from which the rents arise.
176 (4) A perfected security interest in rents has priority over the rights of a person
177 described in Subsection (3) with respect to future advances to the same extent as the assignee's
178 security interest in the real property has priority over the rights of that person with respect to
179 future advances.
180 Section 6. Section 57-26-106 is enacted to read:
181 57-26-106. Enforcement of security interest in rents.
182 (1) An assignee may enforce an assignment of rents using one or more of the methods
184 enforce the assignment under law of this state other than this chapter.
185 (2) From the date of enforcement, the assignee or, in the case of enforcement by
186 appointment of a receiver under Section 57-26-107 , the receiver is entitled to collect all rents
188 (a) have accrued but remain unpaid on that date; and
189 (b) accrue on or after that date, as those rents accrue.
190 Section 7. Section 57-26-107 is enacted to read:
191 57-26-107. Enforcement by appointment of receiver.
192 (1) An assignee is entitled to the appointment of a receiver for the real property subject
193 to the assignment of rents if:
194 (a) the assignor is in default and:
195 (i) the assignor has agreed in a signed document to the appointment of a receiver in the
196 event of the assignor's default;
197 (ii) it appears likely that the real property may not be sufficient to satisfy the secured
199 (iii) the assignor has failed to turn over to the assignee proceeds that the assignee was
200 entitled to collect; or
201 (iv) a subordinate assignee of rents obtains the appointment of a receiver for the real
202 property; or
203 (b) other circumstances exist that would justify the appointment of a receiver under law
204 of this state other than this chapter.
205 (2) An assignee may file a petition for the appointment of a receiver in connection with
206 an action:
207 (a) to foreclose the security instrument;
208 (b) for specific performance of the assignment;
209 (c) seeking a remedy on account of waste or threatened waste of the real property
210 subject to the assignment; or
211 (d) otherwise to enforce the secured obligation or the assignee's remedies arising from
212 the assignment.
213 (3) An assignee that files a petition under Subsection (2) shall also give a copy of the
215 the date the petition is filed, held a recorded assignment of rents arising from the real property.
216 (4) If an assignee enforces an assignment of rents under this section, the date of
217 enforcement is the date on which the court enters an order appointing a receiver for the real
218 property subject to the assignment.
219 (5) From the date of its appointment, a receiver is entitled to collect rents as provided
220 in Subsection 57-26-106 (2). The receiver also has the authority provided in the order of
221 appointment and law of this state other than this chapter.
222 (6) The following rules govern priority among receivers:
223 (a) If more than one assignee qualifies under this section for the appointment of a
224 receiver, a receivership requested by an assignee entitled to priority in rents under this chapter
225 has priority over a receivership requested by a subordinate assignee, even if a court has
226 previously appointed a receiver for the subordinate assignee.
227 (b) If a subordinate assignee obtains the appointment of a receiver, the receiver may
228 collect the rents and apply the proceeds in the manner specified in the order appointing the
229 receiver until a receiver is appointed under a senior assignment of rents.
230 Section 8. Section 57-26-108 is enacted to read:
231 57-26-108. Enforcement by notification to assignor.
232 (1) Upon the assignor's default, or as otherwise agreed by the assignor, the assignee
233 may give the assignor a notification demanding that the assignor pay over the proceeds of any
234 rents that the assignee is entitled to collect under Section 57-26-106 . The assignee shall also
235 give a copy of the notification to any other person that, ten days before the notification date,
236 held a recorded assignment of rents arising from the real property.
237 (2) If an assignee enforces an assignment of rents under this section, the date of
238 enforcement is the date on which the assignor receives a notification under Subsection (1).
239 (3) An assignee's failure to give a notification under Subsection (1) to any person
240 holding a recorded assignment of rents does not affect the effectiveness of the notification as to
241 the assignor, but the other person is entitled to any relief permitted under law of this state other
242 than this chapter.
243 (4) An assignee that holds a security interest in rents solely by virtue of Subsection
244 57-26-104 (1) may not enforce the security interest under this section while the assignor
246 Section 9. Section 57-26-109 is enacted to read:
247 57-26-109. Enforcement by notification to tenant.
248 (1) Upon the assignor's default, or as otherwise agreed by the assignor, the assignee
249 may give to a tenant of the real property a notification demanding that the tenant pay to the
250 assignee all unpaid accrued rents and all unaccrued rents as they accrue. The assignee shall
251 give a copy of the notification to the assignor and to any other person that, ten days before the
252 notification date, held a recorded assignment of rents arising from the real property. The
253 notification must be signed by the assignee and:
254 (a) identify the tenant, assignor, assignee, premises covered by the agreement between
255 the tenant and the assignor, and assignment of rents being enforced;
256 (b) provide the recording data for the document creating the assignment or other
257 reasonable proof that the assignment was made;
258 (c) state that the assignee has the right to collect rents in accordance with the
260 (d) direct the tenant to pay to the assignee all unpaid accrued rents and all unaccrued
261 rents as they accrue;
262 (e) describe the manner in which Subsections (3) and (4) affect the tenant's payment
264 (f) provide the name and telephone number of a contact person and an address to which
265 the tenant can direct payment of rents and any inquiry for additional information about the
266 assignment or the assignee's right to enforce the assignment; and
267 (g) contain a statement that the tenant may consult a lawyer if the tenant has questions
268 about its rights and obligations.
269 (2) If an assignee enforces an assignment of rents under this section, the date of
270 enforcement is the date on which the tenant receives a notification substantially complying
271 with Subsection (1).
272 (3) Subject to Subsection (4) and any other claim or defense that a tenant has under law
273 of this state other than this chapter, following receipt of a notification substantially complying
274 with Subsection (1):
275 (a) a tenant is obligated to pay to the assignee all unpaid accrued rents and all
277 another assignee of rents given by that assignee in accordance with this section and the other
278 assignee has not canceled that notification;
279 (b) unless the tenant occupies the premises as the tenant's primary residence, a tenant
280 that pays rents to the assignor is not discharged from the obligation to pay rents to the assignee;
281 (c) a tenant's payment to the assignee of rents then due satisfies the tenant's obligation
282 under the tenant's agreement with the assignor to the extent of the payment made; and
283 (d) a tenant's obligation to pay rents to the assignee continues until the tenant receives a
284 court order directing the tenant to pay the rent in a different manner or a signed document from
285 the assignee canceling its notification, whichever occurs first.
286 (4) A tenant that has received a notification under Subsection (1) is not in default for
287 nonpayment of rents accruing within 30 days after the date the notification is received before
288 the earlier of:
289 (a) ten days after the date the next regularly scheduled rental payment would be due; or
290 (b) 30 days after the date the tenant receives the notification.
291 (5) Upon receiving a notification from another creditor that is entitled to priority under
292 Subsection 57-26-105 (3) that the other creditor has enforced and is continuing to enforce its
293 interest in rents, an assignee that has given a notification to a tenant under Subsection (1) shall
294 immediately give another notification to the tenant canceling the earlier notification.
295 (6) An assignee's failure to give a notification under Subsection (1) to any person
296 holding a recorded assignment of rents does not affect the effectiveness of the notification as to
297 the assignor and those tenants receiving the notification. However, the person entitled to the
298 notification is entitled to any relief permitted by law of this state other than this chapter.
299 (7) An assignee that holds a security interest in rents solely by virtue of Subsection
300 57-26-104 (1) may not enforce the security interest under this section while the assignor
301 occupies the real property as the assignor's primary residence.
302 Section 10. Section 57-26-110 is enacted to read:
303 57-26-110. Notification to tenant -- Form.
304 No particular phrasing is required for the notification specified in Section 57-26-109 .
305 However, the following form of notification, when properly completed, is sufficient to satisfy
306 the requirements of Section 57-26-109 :
308 Tenant: _______________________________________________________________
309 Name of Tenant
310 Property Occupied by Tenant (the "Premises"): ________________________________
312 Landlord: ____________________________________________________________
313 Name of landlord
314 Assignee: ____________________________________________________________
315 Name of assignee
316 Address of Assignee and Telephone Number of Contact Person:
318 Address of assignee
320 Telephone number of person to contact
321 1. The Assignee named above has become the person entitled to collect your rents on
322 the Premises listed above under ________________________________________________
323 Name of document
324 (the "Assignment of Rents") dated __________, and recorded at _______________________
325 Date Recording data
326 in the ______________________________________________________________________.
327 Appropriate governmental office under the recording act of this state
328 You may obtain additional information about the Assignment of Rents and the Assignee's right
329 to enforce it at the address listed above.
330 2. The Landlord is in default under the Assignment of Rents. Under the Assignment of
331 Rents, the Assignee is entitled to collect rents from the Premises.
332 3. This notification affects your rights and obligations under the agreement under
333 which you occupy the Premises (your "Agreement"). In order to provide you with an
334 opportunity to consult with a lawyer, if your next scheduled rental payment is due within 30
335 days after you receive this notification, neither the Assignee nor the Landlord can hold you in
336 default under your Agreement for nonpayment of that rental payment until ten days after the
337 due date of that payment or 30 days following the date you receive this notification, whichever
339 under your Agreement and the effect of this notification.
340 4. You must pay to the Assignee at the address listed above all rents under your
341 Agreement which are due and payable on the date you receive this notification and all rents
342 accruing under your Agreement after you receive this notification. If you pay rents to the
343 Assignee after receiving this notification, the payment will satisfy your rental obligation to the
344 extent of that payment.
345 5. Unless you occupy the Premises as your primary residence, if you pay any rents to
346 the Landlord after receiving this notification, your payment to the Landlord will not discharge
347 your rental obligation, and the Assignee may hold you liable for that rental obligation
348 notwithstanding your payment to the Landlord.
349 6. If you have previously received a notification from another person that also holds an
350 assignment of the rents due under your Agreement, you should continue paying your rents to
351 the person that sent that notification until that person cancels that notification. Once that
352 notification is canceled, you must begin paying rents to the Assignee in accordance with this
354 7. Your obligation to pay rents to the Assignee will continue until you receive either:
355 (a) a written order from a court directing you to pay the rent in a manner specified in
356 that order; or
357 (b) written instructions from the Assignee canceling this notification.
359 Name of assignee
361 By: Officer/authorized agent of assignee
362 Section 11. Section 57-26-111 is enacted to read:
363 57-26-111. Effect of enforcement.
364 The enforcement of an assignment of rents by one or more of the methods identified in
365 Sections 57-26-107 , 57-26-108 , and 57-26-109 , the application of proceeds by the assignee
366 under Section 57-26-112 after enforcement, the payment of expenses under Section 57-26-113 ,
367 or an action under Subsection 57-26-114 (4) does not:
368 (1) make the assignee a purchaser in possession of the real property;
Senate 2nd Reading Amendments 2-24-2009 rd/ecm(2) make the assignee an agent of the assignor;
370 (3) constitute an election of remedies that precludes a later action to enforce the
371 secured obligation;
372 (4) make the secured obligation unenforceable;
373 (5) limit any right available to the assignee with respect to the secured obligation;
374 (6) S. limit, waive, or bar any foreclosure or power of sale remedy under the security
374b (7) .S violate Section 78B-6-901 ; or
375 S. [
375a relating to
376 deficiency judgments following the enforcement of any encumbrance, lien, or security interest.
377 Section 12. Section 57-26-112 is enacted to read:
378 57-26-112. Application of proceeds.
379 Unless otherwise agreed, an assignee that collects rents under this chapter or collects
380 upon a judgment in an action under Subsection 57-26-114 (4) shall apply the sums collected in
381 the following order to:
382 (1) the assignee's reasonable expenses of enforcing its assignment of rents, including,
383 to the extent provided for by agreement and not prohibited by law of this state other than this
384 chapter, reasonable attorney fees and costs incurred by the assignee;
385 (2) reimbursement of any expenses incurred by the assignee to protect or maintain the
386 real property subject to the assignment;
387 (3) payment of the secured obligation;
388 (4) payment of any obligation secured by a subordinate security interest or other lien on
389 the rents if, before distribution of the proceeds, the assignor and assignee receive a notification
390 from the holder of the interest or lien demanding payment of the proceeds; and
391 (5) the assignor.
392 Section 13. Section 57-26-113 is enacted to read:
393 57-26-113. Application of proceeds to expenses of protecting real property --
394 Claims and defenses of tenant.
395 (1) Unless otherwise agreed by the assignee, and subject to Subsection (3), an assignee
396 that collects rents following enforcement under Section 57-26-108 or 57-26-109 need not apply
397 them to the payment of expenses of protecting or maintaining the real property subject to the
399 (2) Unless a tenant has made an enforceable agreement not to assert claims or defenses,
401 between the assignor and tenant and any claim or defense arising from the assignor's
402 nonperformance of that agreement.
403 (3) This chapter does not limit the standing or right of a tenant to request a court to
404 appoint a receiver for the real property subject to the assignment or to seek other relief on the
405 ground that the assignee's nonpayment of expenses of protecting or maintaining the real
406 property has caused or threatened harm to the tenant's interest in the property. Whether the
407 tenant is entitled to the appointment of a receiver or other relief is governed by law of this state
408 other than this chapter.
409 Section 14. Section 57-26-114 is enacted to read:
410 57-26-114. Turnover of rents -- Commingling and identifiability of rents --
411 Liability of assignor.
412 (1) In this section, "good faith" means honesty in fact and the observance of reasonable
413 commercial standards of fair dealing.
414 (2) If an assignor collects rents that the assignee is entitled to collect under this chapter:
415 (a) the assignor shall turn over the proceeds to the assignee, less any amount
416 representing payment of expenses authorized by the assignee; and
417 (b) the assignee continues to have a security interest in the proceeds so long as they are
419 (3) For purposes of this chapter, cash proceeds are identifiable if they are maintained in
420 a segregated account or, if commingled with other funds, to the extent the assignee can identify
421 them by a method of tracing, including application of equitable principles, that is permitted
422 under law of this state other than this chapter with respect to commingled funds.
423 (4) In addition to any other remedy available to the assignee under law of this state
424 other than this chapter, if an assignor fails to turn over proceeds to the assignee as required by
425 Subsection (2), the assignee may recover from the assignor in a civil action:
426 (a) the proceeds, or an amount equal to the proceeds, that the assignor was obligated to
427 turn over under Subsection (2); and
428 (b) reasonable attorney fees and costs incurred by the assignee to the extent provided
429 for by agreement and not prohibited by law of this state other than this chapter.
430 (5) The assignee may maintain an action under Subsection (4) without bringing an
Senate 2nd Reading Amendments 2-24-2009 rd/ecmaction to foreclose any security interest that it may have in the real property. Any sums
432 recovered in the action must be applied in the manner specified in Section 57-26-112 .
433 (6) Unless otherwise agreed, if an assignee entitled to priority under Subsection
434 57-26-105 (3) enforces its interest in rents after another creditor holding a subordinate security
435 interest in rents has enforced its interest under Section 57-26-108 or 57-26-109 , the creditor
436 holding the subordinate security interest in rents is not obligated to turn over any proceeds that
437 it collects in good faith before the creditor receives notification that the senior assignee has
438 enforced its interest in rents. The creditor shall turn over to the senior assignee any proceeds
439 that it collects after it receives the notification.
440 Section 15. Section 57-26-115 is enacted to read:
441 57-26-115. Perfection and priority of assignee's security interest in proceeds.
442 (1) In this section:
443 (a) "Article 9" means Title 70A, Chapter 9a, Uniform Commercial Code - Secured
444 Transactions, or, to the extent applicable to any particular issue, Article 9 as adopted by the
445 state whose laws govern that issue under the choice-of-laws rules contained in Title 70A,
446 Chapter 9a, Uniform Commercial Code - Secured Transactions.
447 (b) "Conflicting interest" means an interest in proceeds, held by a person other than an
448 assignee, that is:
449 (i) a security interest arising under Article 9; or
450 (ii) any other interest if Article 9 resolves the priority conflict between that person and
451 a secured party with a conflicting security interest in the proceeds.
452 (2) An assignee's security interest in identifiable cash proceeds is perfected if its
453 security interest in rents is perfected. An assignee's security interest in identifiable noncash
454 proceeds is perfected only if the assignee perfects that interest in accordance with Article 9.
455 (3) Except as otherwise provided in Subsection (4), priority between an assignee's
456 security interest in identifiable proceeds and a conflicting interest is governed by the priority
457 rules in Article 9.
458 (4) An assignee's perfected security interest in identifiable cash proceeds is subordinate
459 to a conflicting interest that is perfected by control under Article 9 but has priority over a
460 conflicting interest that is perfected other than by control.
460a S. (5) An assignee's perfected security interest in identifiable cash proceeds is subordinate to
460b a conflicting interest arising under a right of recoupment or setoff. .S
461 Section 16. Section 57-26-116 is enacted to read:
463 This chapter does not preclude subordination by agreement as to rents or proceeds.
464 Section 17. Section 57-26-117 is enacted to read:
465 57-26-117. Uniformity of application and construction.
466 In applying and construing this uniform act, consideration must be given to the need to
467 promote uniformity of the law with respect to its subject matter among states that enact it.
468 Section 18. Section 57-26-118 is enacted to read:
469 57-26-118. Relation to Electronic Signatures in Global and National Commerce
471 This chapter modifies, limits, and supersedes the federal Electronic Signatures in
472 Global and National Commerce Act (15 U.S.C. Section 7001, et seq.) but does not modify,
473 limit, or supersede Section 101(c) of that act (15 U.S.C. Section 7001(c)) or authorize
474 electronic delivery of any of the notices described in Section 103(b) of that act (15 U.S.C.
475 Section 7003(b)).
476 Section 19. Section 57-26-119 is enacted to read:
477 57-26-119. Application to existing relationships.
478 (1) Except as otherwise provided in this section, this chapter governs the enforcement
479 of an assignment of rents and the perfection and priority of a security interest in rents, even if
480 the document creating the assignment was signed and delivered before May 12, 2009.
481 (2) This chapter does not affect an action or proceeding commenced before May 12,
483 (3) Subsection 57-26-104 (1) of this chapter does not apply to any security instrument
484 signed and delivered before May 12, 2009.
485 (4) This chapter does not affect:
486 (a) the enforceability of an assignee's security interest in rents or proceeds if,
487 immediately before May 12, 2009, that security interest was enforceable;
488 (b) the perfection of an assignee's security interest in rents or proceeds if, immediately
489 before May 12, 2009, that security interest was perfected; or
490 (c) the priority of an assignee's security interest in rents or proceeds with respect to the
491 interest of another person if, immediately before May 12, 2009, the interest of the other person
492 was enforceable and perfected, and that priority was established.
Legislative Review Note
as of 1-6-09 8:51 AM