Request By:
Mr. Thomas E. Morris
Christian County Clerk
Hopkinsville, Kentucky
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
The secured party of a financing statement wants the financing statement filed and recorded with the recorded real estate mortgages in addition to having it filed as a lien on personal property. You ask if this is legal.
KRS 355.9-402(1) provides in part that when the financing statement covers crops or goods which are to become fixtures, the statement must also contain a description of the real estate concerned. A financing statement is only filed, not recorded. KRS 355.9-403. Note that KRS 355.9-401(1)(b) provides that when the collateral is goods which at the time the security interest attaches are or are to become fixtures, the security agreement or financing statement must be filed [not recorded] in the clerk's office where a mortgage on the real estate concerned would be filed and recorded.
KRS 132.750 provides that if the wheels or mobile parts of a housetrailer have been removed and the unit rests on a "permanent, fixed foundation", it shall be classified as real estate. A "permanent, fixed foundation" means a foundation permanent in nature which is so constructed as to be fixed upon the surface of the land. See KRS 132.720(4). The property valuation administrator can only determine this fact of the mobile home's being realty or personalty by going out on the land and physically inspecting the mobile home in place.
Assuming that the P.V.A. has determined, after inspection, that the particular mobile home has been so attached to the soil as to become realty under KRS 132.750, the secured party can have his financing statement filed as a financing statement under KRS 355.9-402 and 355.9-403. In addition, if the secured party wants the financing statement filed and recorded as a real estate mortgage lien, the financing statement must meet all of the requirements of a real estate mortgage, such as acknowledgment, description of land, granting clause, etc., and a certificate of authorship [KRS 382.335]. If the financing statement does not meet the formal requisites of a real estate mortgage instrument, the secured party can have executed a formal real estate mortgage covering the mobile home and the land upon which it rests and file it with your office for recording as a real estate mortgage.
Our writing in OAG 68-407, which you mentioned, that in case of personalty to become a fixture the financing statement should be filed with the county clerk where a real estate mortgage would be recorded [KRS 355.9-401(1)(b)] has only to do with the proper office for filing the financing statement. That statute in no way authorizes such financing statement to be treated as a real estate mortgage and thus entitled to recordation. It relates solely to the proper office of filing when the collateral is to become a fixture. As we said above, the financing statement may only be filed as a real estate mortgage under these conditions: (1) The P.V.A. has determined that the mobile home has become realty under KRS 132.750; and (2) That the financing statement or security agreement meets the formal requisites of a valid real estate mortgage instrument.
However, even if the financial statement or security agreement meets the above two tests, the financing statement does not have to be filed and recorded as a real estate mortgage in order for the lien to be enforced. First, "goods" includes all things which are movable at the time the security interest attaches or which are fixtures. KRS 355.9-105(1)(f). However, the law of Kentucky other than KRS Chapter 355 determines whether and when goods, such as a mobile home, becomes a fixture. KRS 355.9-313(1). As we said earlier, KRS 132. 750 lays down the conditions under which a mobile home becomes realty. The case decisions define a permanent fixture as one properly fixed to the realty so that it becomes a part or parcel of the realty, giving the owner of the realty the same rights to it as the soil itself. The three tests for determining wherther an article is a permanent fixture are stated in
Tarter v. Turpin, Ky., 291 S.W.2d 547 (1956) 548. However, in this situation the statute, KRS 132.750, controls; and if the mobile home has been attached to the soil by way of a permanent, fixed foundation, it must be classified by the P.V.A. for property assessment and other purposes as real estate or "fixture" as mentioned in KRS Chapter 355.
Note that KRS 355.9-313(1) provides that Chapter 355 does not prevent creation of an encumbrance upon fixtures or real estate pursuant to law applicable to real estate.
All of this simply means that if the financing statement qualifies as a real estate mortgage as well as being filed as a financing statement involving a chattel under Chapter 355. In pursuing lien rights the secured party would be enforcing the lien under Chapter 355 against the mobile home structure only. Any real estate mortgage would involve the mobile home and the described land upon which it is anchored.