Fixture Filing vs PMSI: How Do Priority Rules Change When Goods Become Fixtures?
Fixtures sit between personal-property and real-estate law, so ordinary filing rules are not always enough.
Fixture concept
Fixtures are goods that become sufficiently related to real property that an interest in them can overlap with real-estate interests.
Fixture filing
A fixture filing is designed to perfect a security interest in fixtures in a way that gives notice within the real-property records or designated filing system.
PMSI
A purchase-money security interest can receive special priority treatment when the statutory requirements and timing rules are satisfied.
Exam strategy
Identify whether the collateral is still ordinary goods or has become a fixture, then compare the secured party's filing and timing with competing real-property interests.
The takeaway
When goods become fixtures, priority can depend on fixture-specific filing and PMSI rules rather than ordinary personal-property perfection alone.
Related Summit resources
FAQ
Are fixtures treated exactly like ordinary inventory?
No.
Can a fixture filing matter for priority?
Yes.
Can a qualifying PMSI receive special priority?
Yes.