Bank Lean on Equipment

[Charlie in Southern]

Is there anyway for a guy to know if a piece of equipment has a bank lean against it? What would happen if I bought a piece of equipment from someone and the bank still had a lean against it?

 

[Tradititonal Farmer]

The bank can come claim their equipment with no compensation to you.The liens are recorded at the courthouse of the county where the person wih the lien lives.

 

[thurlow]

Go over to the Register's office in the Court House and ask 'em if there's a lien. Can't be sold (legally) if there's a lien. Well, actually it can; I've called my banker numerous times and said, "I'm gonna swap (or sell and buy another).......tractor, truck, combine, whatever". They like to know ahead of time.

 

[thurlow]

You posted while I was typing; didn't mean to step on your post.............

 

[2x4]

if an out of county bank has a lein, there is a state office you can check for any lein from anywhere. A lein may show up but has been paid off long ago. After paid off, you have to pay for a release of lein - $6.00 last i heard.

 

[James Howell]

As a former banker, I would file a UCC-1 with the County Clerk and with the Texas Secretary of State to "perfect" the bank's lien on non-titled equipment.

Once the loan was paid off, I would file a UCC-3 with the County Clerk and with the Texas Secretary of State to release the bank's lien on non-titled equipment.

I agree with both gentlemen below, check with your County Clerk to see if a lien exists on the equipment.

You might also check with the Secretary of State to see if a lien is recorded.

If a lien exists, make sure you contact the financial institution that is the leinholder for payoff instructions.

If a lien exists, I would suggest using an envelope draft from your financial instituion.

The envelope draft will be paid by your financial institution if the required documents to transfer posession are enclosed by the lienholder.

In my prior experience as a banker, I have seen too many people purchase a non-titled piece of equipment, pay the "owner" of the equipment, then later have the equipment reposessed because the "owner" did not pay off the loan that was secured by the equipment.

I have honestly told some of them "don't shoot me, shoot the guy you bought it from".

One day I will write a book about my experiences as a banker - not enought space or time on this forum.

Hope this helps.

 

[GeneMO]

In MO. the lender is required to file any leins with the county Recorder of deeds. I forget the form name or number, a UCC something or other. All of this is public record, just go in and ask.

Of course there is a fee to file the lein, and a fee to get it released.

I had borrowed a little against my D-2 Cat years ago, when I paid off the loan, it was going to cost me $20 to get it relased. It would expire in a couple of years and I just said to heck with it. didn't plan to use it for collateral anyway. Just kept my twenty bucks.


Gene

 

[John T Attorney]

Charlie, as expected, my typical lawyer answer lol must be YES and NO. YES you can find out if a Bank has a security interest in certain property IFFFFFFFF they prefected it by filing the same at the Courthouse and the same (in your jurisdiction) is public information. But NO if it wasnt, cuz the bank isnt gonna divulge any what might be priveliged or personal information over to you as far as Im aware. Now IFFFFFFFF a bank has a perfected security interest recorded and its a first lien, it takes priority. Soooooooo if you buy something and the bank has a lien, its still there even if you subsequently buy the equipment from farmer Billy Joe Bob.

Secured Transactions was NOT my best subject in law school and I do NOT practice in this area so NO WARRANTY, this is worth exactly what you paid for it NOTHING but beware of lay persons opinions and dont hang your hat on ANYTHING posted here, seek local counsel familiar with your states laws and one experienced in these matters.

John T Retired Electrical Engineer and Country Lawyer in Indiana

 

[GRJ]

I repoed a tractor from a fellow who had purchased the tractor from the man who had not paid off the note. The new "owner" was madder than a wet hen that he had to pay and additional $2500 to get back what he thought was his. Always check for a lien!!!

 

[MarkB_MI]

You might get a little more accurate information if you said which state the equipment is in. Certainly the first place to go would be the courthouse where the current owner resides. But there's no guarantee that there isn't a lien recorded in another county or even another state.

 

[T-Rev]

John, Where abouts in Indiana?

 

[Mark - IN.]

That sure is a lot of "ifffff's". How in the world am I sposed to pin you down and hold you liable with that many "ifffff's"? Chuckle...I'm just joking. I'm about the most non-litigious person one would ever go across. But, keep meaning to go check out legalzoom.com to see if its all its cracked up to be...been thinking about the will, or trust.

Seems like good advice...buyer beware, hope for the best, and hope for an honest seller.

Mark

 

[John T Attorney]

Bloomington

 

[John T Attorney]

I cant help myself Mark lol ifs and disclaimers are part of my training

John T

 

[Anonymous-0]

All the things I've ever bought or sold and even the forms for selling vehicles all say,"Free of all liens and encumberances". You can also go to a registry and check if there is a lien. In the case of a vehicle, you can register a lien at the vehicle registration agency. This stops the person from selling the vehicle to someone else if he still owes you money for it and on the other hand, can not let him get proper registration without paying off the lien. I'm not a lawyer but I have had some experience with certain things. People don't always have to be a qualified professional to give good sound advice that is based on actual events that have happened. Another example, If a calf has to be pulled, do you have to have a vet come to do it? Most, if not all, farmers that raise cattle will know what to do and only call a vet for a more serious problem. Getting good legal advice is a good idea but isn't always necessary. Someone else may have gone through the exact same thing and be able to help. Much cheaper than a lawyer too. Dave

 

[Charlie in Southern]

Well thats all good information to know. The particular piece of equipment that I was talking about is 19 years old, but is still worth a right smart. I bought it in another state and if there was some sorta lean against it I think they'd have a hell of a time finding it anyway.

 

[Mike (WA)]

Over the years, I've found that it usually ends up costing about $1,500 to fix a botched "homebrew" real estate transaction, which an attorney would have initially done for a couple hundred bucks. False economy, maybe?

As to the lien situation- The only way to do it properly is to find out what the security interest perfection procedure is in the state where the seller lives. Some have county filing, some state- most will not have both. In Washington, for instance, going to the county will get you only blank stares- most of the employees who remember county "chattel mortgage" filings have long since retired. Its purely a state procedure here. If the bank hasn't filed its UCC-1 properly, their security interest loses out to your purchase. If they have filed (and they generally will, or they aren't in the business very long), either you check liens, find it, and take precautions to make sure they get paid with your purchase money, or you don't check, they come after the equipment, and you wind up "walkin' down the road, talkin' to yourself".

 

[Mike (WA)]

Unless they threaten your seller with prosecution for theft unless he tells them who he sold to. He'll sing like a canary.

 

[T-Rev]

Just wondered, Dad is an attorney in Terre Haute, I think he had a friend named John who retired.