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UCC Filing Procedures Changed by Treasury Department

Under Article 9 of the Uniform Commercial Code [“UCC”], security interests in both fixtures and non-fixtures are perfected by the filing of financing statements.N.J.S.A.12A:9-502(c).Financing statements may be filed with the county recording officer or with the Department of the Treasury in Trenton. But financing statements affecting fixtures must be filed with the county clerk or register.

Since UCC financing statements cover interests in personalty, they may not be used as a basis for issuing title insurance policies. The Title Insurance Act, N.J.S.A. 17:46B-1 et seq., empowers title companies to insure title to realty only. See N.J.S.A.17:46B-10. Nevertheless, title companies are often asked to file UCC financing statements. Such requests are sometime characterized as “courtesy” or “accommodation” filings because they involve documents which are not to be insured under a title insurance policy.

The New Jersey Treasury Department, Division of Revenue and Enterprise Services [“DORES”] has adopted regulations, effective July 1, 2015, which require that all UCC filings be submitted in electronic format. Thus, paper copies of UCC documents intended to be filed in Trenton will not be accepted, unless the party submitting the forms has obtained an exemption from the electronic filing requirement. N.J.A.C. 17:33-2.9. As a practical matter, this means that title companies will not be able to accept paper copies of UCC documents for filing, because the same will be rejected by DORES.

Most title insurers take the position that is it inappropriate for title companies to complete the computerized versions of UCC forms available on the DORES website, as this could be construed as the unauthorized practice of law. See N.J.S.A. 17:46B-1.

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