Imagine you’re getting ready to sell your land, but the title search turns up something unexpected: a UCC filing. Maybe it’s for solar panels, a water system, or another improvement you didn’t even finance yourself. These liens can be confusing, and they often stop a sale in its tracks. The good news is they can be resolved, but the process varies depending on the situation.
This guide explains what UCC filings are, why they show up on real property, how to identify and remove them, and when it might make sense to let a cash buyer take over the problem.
What a UCC Lien Is and Why It Matters
A UCC lien is a public notice that a creditor has a security interest in personal property. These liens are governed by the Uniform Commercial Code (UCC) and are often used for financing equipment, machinery, or fixtures. Most UCC liens are filed with the Secretary of State’s office to cover personal property, but some are also recorded in county land records if they involve “fixtures” attached to real estate.
When a lien involves an item that has become part of the property—such as a solar array or a geothermal system—it’s called a UCC fixture filing. Fixture filings can cloud title and prevent a clean transfer until they’re resolved.
Example: Solar Panel Financing
Suppose the previous owner installed solar panels and financed them. The lender filed a UCC fixture filing with the county to secure their interest. Even if the loan has been paid off, the lien may still appear on the property’s title if it wasn’t properly terminated. A title company will require that lien to be cleared before closing.
Have a different type of title problem? Check out our complete guide to selling land with title issues.
How UCC Fixture Filings Work
A fixture is personal property that has been permanently attached to land or buildings. Examples include built-in HVAC systems, solar panels, irrigation pumps, or large storage tanks. Because these items are difficult to remove and considered part of the property, lenders often record their interest in county land records in addition to state-level UCC filings.
Priority is usually determined by who files first. For example, if a solar lender filed their UCC fixture lien before a mortgage was recorded, they may have priority in certain circumstances. While these rules mostly matter to lenders, understanding that these liens carry real legal weight is important for sellers.
Step-by-Step: How to Resolve a UCC Lien on Your Property
If a UCC lien shows up unexpectedly, here’s a clear process to follow:
1. Identify the Filing
Run two searches:
- Check your state’s Secretary of State website for any UCC filings under your or the previous owner’s name.
- Search the county land records where the property is located for fixture filings recorded against the legal description.
Look closely at the debtor’s name, the secured party (lender), and the collateral description to determine whether the filing involves your property.
2. Contact the Creditor or Title Company
Once you know who filed the lien, contact the creditor directly or work with your title company to confirm why the lien was filed. Many UCC liens remain of record because the debt was paid off but the termination statement was never filed.
For example, a rural landowner might discover a lien from a financing company for a water filtration system installed years earlier. The system was fully paid off, but the company never filed the release.
3. Obtain a Payoff or Release
If the debt is still outstanding, request a payoff statement so you can settle the obligation. If the debt was already paid, ask the creditor to file a UCC-3 Termination Statement or provide you with a signed termination document that you can file yourself.
Lenders are legally required to file a termination once the obligation is satisfied, but they often need a reminder.
4. File or Verify Termination
File the termination in the same office where the original lien was recorded—either with the Secretary of State or the county recorder for fixture filings. Always confirm that the termination has been indexed correctly and shows up in the public record.
5. Confirm Title is Clear
Order an updated title search to verify the lien has been removed. This ensures the issue won’t resurface at closing.
When DIY Resolution Makes Sense
Resolving UCC liens yourself typically makes sense when:
- The lien involves a single item, such as financed solar panels, a furnace, or a water system.
- The creditor is still in business and cooperative.
- The amount owed is small or already paid off.
- You have time before closing to clear the title.
For example, if you’re selling a vacant parcel with a lien for a $3,000 irrigation pump installed by a previous owner, contacting the company and filing a termination may be straightforward and cost very little.
When Selling As-Is to a Cash Buyer May Be Smarter
In some cases, resolving UCC liens can become complicated or expensive. Here are scenarios where it may make sense to sell the property as-is to a cash buyer who can handle the issue:
- The creditor no longer exists or can’t be located. For example, a small solar company that filed the lien has since gone out of business. Clearing the lien may require legal proceedings.
- The lien involves multiple filings or conflicting interests. Some properties have both state and county fixture filings, or multiple lenders with layered claims.
- You’re on a tight timeline. If you need to sell quickly to settle an estate or avoid foreclosure, resolving the issue yourself may cause costly delays.
In these situations, investors or land buyers experienced with title problems may offer a cash price that reflects the cost and risk of clearing the lien themselves. While the sale price is often lower than a fully marketable property, it allows you to close quickly without taking on the resolution process.
Need help selling land with UCC filings or security interests? Get a cash offer from experienced buyers.
Conclusion
UCC fixture filings can be surprising, but they don’t have to derail your sale. By understanding what they are, how to identify them, and how to clear them, you can keep your transaction on track. For many common situations, resolving the issue yourself is straightforward. For more complex or costly cases, selling to a cash buyer who specializes in properties with title issues can be a practical solution.
Either way, addressing the issue early—before listing or accepting offers—will save time, money, and stress at closing. If you’d rather skip the legal legwork, you can request a cash offer from a buyer who can handle the resolution for you.
Frequently Asked Questions
What is a UCC lien and why does it matter for real estate?
A UCC lien is a creditor’s legal claim on personal property, often equipment or fixtures. When recorded in county land records as a fixture filing, it attaches to the property itself and can block a sale until it’s cleared.
How do I remove a UCC lien?
You usually remove it by filing a UCC-3 Termination Statement with the same office where the lien was filed. This happens after the debt is paid or when the creditor agrees it’s no longer valid.
How long do UCC liens last?
Most UCC liens are valid for five years and can be renewed for another five-year period if the creditor files a continuation. If not renewed, the lien lapses, but it may still remain in the record until formally terminated.
What happens if I ignore a UCC lien?
A title company will likely refuse to insure the sale until the lien is resolved. If the debt is unpaid, the creditor can enforce their rights, which may include taking possession of the fixture or pursuing legal remedies.
Please consult your financial advisor, accountant, real estate attorney, or tax specialist. This article is for informational purposes and is not tax or legal advice.
