Real estate that can be declared as collateral under a security agreement includes inventory of products, furniture, equipment used by a company, home furnishings and real estate owned by the company. The borrower is responsible for maintaining security in good condition in the event of a default. The property classified as collateral should not be removed from the premises unless the property is required in the normal framework of operations. The perfection process is not required by law, but it remains an important step for those with a safety interest. Without perfection, it is impossible for the sure parties to be truly sure that the debtor`s security is safe from other creditors. A security contract is a contract between the creditor and the debtor in a secure transaction that governs the rights of each party with respect to secure real estate (security). To establish a valid security interest, certain specific requirements are necessary: 1) it must be signed; 2) it must make it clear that a security interest is being considered and 3) it must contain a sufficient description of persons who are deprived of security. Some security agreements have a kind of middle ground: an indispensable document. Not exactly tangible or immaterial, this includes any document absolutely necessary to safeguard the value of material goods.
The security agreement defines the different rights that the donor will have with respect to guarantees that, in addition to all other rights that the lender may have by law, such as the rights of Article 9 of the Single Code of Commerce, which has been adopted in one way or another by each state in the United States. The security agreement also covers issues such as authorized sales or other transactions relating to the donor`s guarantees in due form, as well as the communications that the recipient must provide to the donor when certain measures are taken. There are many forms of purchase of supply companies and legal bankers, in addition to software that will create a security agreement after certain user entries. The provision generally includes the sale or rental of the property held as collateral. This is often done through public auctions, but can also include a private sale. As in the case of forfeiture, the insured party must disclose the intention to surrender the security. The installation is a critical process for entering into safety agreements and obtaining security interests. It is only in accordance with the requirements of the seizure that the creditor becomes an insured party. To obtain a seizure, the following obligations must be fulfilled: cf. 9-102 (2) – 9-310 of the code.
Article 9 contains a fraud status that imposes a written guarantee contract, unless it is mortgaged. See code point 9-203 (1). A mortgaged guarantee agreement is entered into when the borrower transfers the guarantee to the lender for a loan (for example. B a pawnbroker). The “perfection” of a security agreement allows an insured party to get priority over third-party guarantees. To complete a security agreement, it is usually necessary to submit a public notice. See 9-302 – 9-305 code. These three elements are imperative requirements of a proper security agreement, without which the creditor may have no valid and enforceable security interest in the ownership of the property that is subject to the agreement. A valid security agreement consists at least of a description of the guarantees, a declaration of intent to generate security interests and all signatures of all parties involved.
However, most security agreements go beyond these essential requirements. Many include alliances (or debtor bonds) and guarantees (guarantees). Examples of agreements or guarantees could be as follows: although the substantive requirements are quite strict, the formal requirements are not.