In a previous blog post, we discussed common errors on UCC1 Financing Statements. Here, we will focus on preventing common errors on UCC3 Change Statement filings. In order to fend of challenges to their priority position, UCC filers must keep their filing information accurate and up-to-date. This is accomplished by filing the appropriate UCC3 Statement.
There are five types of UCC3 Filings:
- Continuations extend the term for a Financing Statement by an additional five years
- Party Amendments add, delete or change debtor or secured party information
- Collateral Amendments add, delete or restate collateral covered by the statement
- Assignments convey rights in collateral to another secured party
- Terminations cancel effectiveness of a filing prior to its lapse date
Here are a few common mistakes to watch for when filing UCC3 Change Statements:
- Multipurpose Filings: most jurisdictions will not accept a UCC3 that includes multiple transactions on a single form. For example, if an original UCC1 filing needs to be continued and amended to include an additional debtor address, these changes must be submitted to the filing office via independent UCC3 Change Statement forms.
- Incorrect Original Filing Information: a UCC3 must list the correct filing number and file date from the original UCC1 Financing Statement, even if the document has since been amended or continued. Note that many filing offices have strict rules about the formatting of file numbers. Be sure to list the filing number exactly as it is shown on the filed UCC1 including any spaces, hyphens etc.
- Untimely Continuations: continuations can only be filed within six months of a Financing Statement’s lapse date and filing offices will reject a document that is submitted prematurely. Please see our previous blog post for more detailed information on when to file continuation statements.
Lastly, consider partnering with a service company that offers a web-based UCC filing and portfolio management system. Many have form-filler tools that pull information directly from filed UCC data to facilitate easy filing of error free UCC3 Change Statements.