Dan owns a house that was mortgaged to First Bank.Dan purchases a central air conditioning unit in January 2011, from Bob's Appliances on credit and gives Bob's a security interest in the unit.In most states, in order to gain priority over First Bank, Bob's Appliances must:

Question

Quizplus · Accepted Answer

To gain priority over First Bank, Bob's Appliances must perfect its security interest in the central air conditioning unit. This can be done through a fixture filing since the unit is likely considered a fixture once installed in the house. Additionally, in many jurisdictions, there is a provision that allows a security interest in fixtures to gain priority if perfected within 20 days after the goods become fixtures. Thus, both A and B are correct actions to take to gain priority over First Bank's interest in the property.

Dan Owns a House That Was Mortgaged to First Bank