8.9A-203 - A-203. Attachment and enforceability of security interest; proceeds, supporting obligations; formal requisites.
§ 8.9A-203. Attachment and enforceability of security interest; proceeds,supporting obligations; formal requisites.
(a) Attachment. A security interest attaches to collateral when it becomesenforceable against the debtor with respect to the collateral, unless anagreement expressly postpones the time of attachment.
(b) Enforceability. Except as otherwise provided in subsections (c) through(i), a security interest is enforceable against the debtor and third partieswith respect to the collateral only if:
(1) value has been given;
(2) the debtor has rights in the collateral or the power to transfer rightsin the collateral to a secured party; and
(3) one of the following conditions is met:
(A) the debtor has authenticated a security agreement that provides adescription of the collateral and, if the security interest covers timber tobe cut, a description of the land concerned;
(B) the collateral is not a certificated security and is in the possession ofthe secured party under § 8.9A-313 pursuant to the debtor's securityagreement;
(C) the collateral is a certificated security in registered form and thesecurity certificate has been delivered to the secured party under § 8.8A-301pursuant to the debtor's security agreement; or
(D) the collateral is deposit accounts, electronic chattel paper, investmentproperty, letter-of-credit rights, or electronic documents, and the securedparty has control under §§ 8.7-106, 8.9A-104, 8.9A-105, 8.9A-106, or §8.9A-107 pursuant to the debtor's security agreement.
(c) Other Uniform Commercial Code provisions. Subsection (b) is subject to §8.4-210 on the security interest of a collecting bank, § 8.5A-118 on thesecurity interest of a letter-of-credit issuer or nominated person, §8.9A-110 on a security interest arising under Title 8.2 or Title 8.2A, and §8.9A-206 on security interests in investment property.
(d) When person becomes bound by another person's security agreement. Aperson becomes bound as debtor by a security agreement entered into byanother person if, by operation of law other than this title or by contract:
(1) the security agreement becomes effective to create a security interest inthe person's property; or
(2) the person becomes generally obligated for the obligations of the otherperson, including the obligation secured under the security agreement, andacquires or succeeds to all or substantially all of the assets of the otherperson.
(e) Effect of new debtor becoming bound. If a new debtor becomes bound asdebtor by a security agreement entered into by another person:
(1) the agreement satisfies subdivision (b) (3) with respect to existing orafter-acquired property of the new debtor to the extent the property isdescribed in the agreement; and
(2) another agreement is not necessary to make a security interest in theproperty enforceable.
(f) Proceeds and supporting obligations. The attachment of a securityinterest in collateral gives the secured party the rights to proceedsprovided by § 8.9A-315 and is also attachment of a security interest in asupporting obligation for the collateral.
(g) Lien securing right to payment. The attachment of a security interest ina right to payment or performance secured by a security interest or otherlien on personal or real property is also attachment of a security interestin the security interest, mortgage, or other lien.
(h) Security entitlement carried in securities account. The attachment of asecurity interest in a securities account is also attachment of a securityinterest in the security entitlements carried in the securities account.
(i) Commodity contracts carried in commodity account. The attachment of asecurity interest in a commodity account is also attachment of a securityinterest in the commodity contracts carried in the commodity account.
(Code 1950, § 6-551; 1964, c. 219, § 8.9-203; 1973, c. 509; 1984, c. 613;1996, c. 216, § 8.9-115; 2000, c. 1007; 2004, c. 200.)