Keeping a Personal Property Security Interest Perfected

Per E. Oscarsson, Edmonds Lawyer

Security interests in certain types of personal property in the state of Washington are perfected only by filing a Uniform Commercial Code financing statement with the Washington Department of Licensing. “Perfection” of a security interest is important because it is a concept used to determine the priority of competing security interests in the same collateral. If a security interest has been perfected, but then becomes unperfected, it loses its priority versus the competing, perfected, security interests.

Generally, a filed financing statement is effective for five years from the date of filing. This differs from the effectiveness of a security interest in real estate that is perfected by the recording of a mortgage or deed of trust in the property records of the county in which the real estate is located.  In such a case, the security interest is effective until the mortgage or deed of trust is satisfied or otherwise removed from the county records; this could be several decades.  If nothing is done within the five years after the financing statement is filed, the security interest that was represented by the financing statement becomes unperfected (assuming the security interest is not otherwise perfected; depending upon the nature of the personal property involved, there could be multiple ways of perfecting a security interest in such property).

To continue the perfection of the security interest reflected in the financing statement, a document known as a continuation statement can be filed with the Department of Licensing anytime in the six months immediately prior to expiration of the five-year period. This is not a one-time procedure; it can be done in successive five-year periods.  However, if a five-year period expires without the timely filing of a continuation statement, the opportunity to file a continuation statement is lost. There is no grace period.

If you need assistance with your business or real estate matters, contact one of the attorneys in Beresford Booth’s Business and Real Estate Group.

To learn more about Keeping a Personal Property Security Interest Perfected, please contact Beresford Booth at or by phone at (425) 776-4100.

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