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Exam 5: Fixtures

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Question 61

True/False

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Perfected secured parties can obtain priority over other parties by obtaining the other parties' consent.

A) True
B) False

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verified

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Question 62

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Proof of a PMSI is the burden of the creditor claiming priority.

A) True
B) False

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Question 63

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Discuss whether each of the following would be a fixture or personal property. Be certain to discuss all relevant factors in making your determination. a. In a residence, a sofa and chair that are made of the same fabric as the draperies. The buyer of the residence wants to know. b. Would the answer be different if the house were being taken by eminent domain? c. A floor cable for PROFS, the IBM intraoffice communication system. The tenant wants to know if it can take it when the lease expires. d. Refrigerators in an apartment complex that is being sold.

Charles E. Williams paid for the purchase and installation of a guttering system for his home by Hanke Brothers with a Wells Fargo Home Projects Visa card. Under the terms of this particular Visa card, Williams agreed to pay Wells Fargo a principal amount plus interest in return for payment for the guttering system by Wells Fargo to Hanke Brothers. Wells Fargo made payment, and Hanke Brothers then installed the guttering system. Wells Fargo did not file a financing statement on the guttering system. Williams defaulted on his mortgage and the mortgage company brought foreclosure action. Wells Fargo said that it was entitled to the guttering system because it was personal property purchased with a credit card. The mortgage company maintains that the failure to file a financing statement means that Wells Fargo is simply an unsecured creditor as any credit card company would be. Which of the following is correct?

A debtor can create a valid security agreement through authentication.

A bill of sale:

In determining assessed value of a property, appraisers tend to favor inclusion of items as fixtures.

A creditor who advances funds for a purchase of a fixture can never have priority over a previously recorded mortgage.

Consumer PMSIs in fixtures do not need to be filed or recorded.

PMSI creditors have the right to remove their secured property from the real property prior to foreclosure by the mortgage company.

Discuss whether each of the following would be fixtures or personal property. a. Sign on store premises (purchased by tenant) b. Wallpaper in a store (installed by tenant) c. Microwave ovens in a restaurant