Published — June 12, 2021
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: CONTRACTUAL LIMITATION ON THE CREATION OF A SECURITY INTEREST UNDER PERSONAL PROPERTY SECURITY ACT
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On perfection, a security interest becomes effective against third parties.
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A security interest in any tangible asset may be perfected by registration or possession.
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A security interest in investment property and deposit account may be perfected by registration or control.
When does a security interest become perfected?
REPUBLIC ACT No. 11057 or Personal Property Security Act provides that:
Security interest is a property right in collateral that secures payment or other performance of an obligation, regardless of whether the parties have denominated it as a security interest, and regardless of the type of asset, the status of the grantor or secured creditor, or the nature of the secured obligation; including the right of a buyer of accounts receivable and a lessor under an operating lease for not less than one (1) year.
A security interest shall be perfected when it has been created and the secured creditor has taken one of the following actions:
(a) Registration of a notice with the Registry established by the Land Registration Authority;
(b) Possession of the collateral by the secured creditor; and
(c) Control of investment property and deposit account.
On perfection, a security interest becomes effective against third parties.
A security interest in any tangible asset may be perfected by registration or possession. A security interest in investment property and deposit account may be perfected by registration or control.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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