13 Pa.C.S. Ch. 92

13 Pa.C.S. Ch. 92
in effect

13 Pa.C.S. § 9201 General effectiveness of security agreement.

(a) General effectiveness.--Except as otherwise provided in this title, a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors. (b) Applicable consumer laws and other law.--A transaction subject to this division is subject to: (1) any applicable rule of law which establishes a different rule for consumers; (2) any other statute or regulation of the Commonwealth which regulates the rates, charges, agreements and practices for loans, credit sales or other extensions of credit; and (3) any consumer protection statute or regulation of the Commonwealth. (c) Other applicable law controls.--In case of conflict between this division and a rule of law, statute or regulation described in subsection (b), the rule of law, statute or regulation controls. Failure to comply with a statute or regulation described in subsection (b) has only the effect the statute or regulation specifies. (d) Further deference to other applicable law.--This division does not: (1) validate any rate, charge, agreement or practice which violates a rule of law, statute or regulation described in subsection (b); or (2) extend the application of the rule of law, statute or regulation to a transaction not otherwise subject to it.

13 Pa.C.S. § 9202 Title to collateral immaterial.

Except as otherwise provided with respect to consignments or sales of accounts, chattel paper, payment intangibles or promissory notes, the provisions of this division with regard to rights and obligations apply whether title to collateral is in the secured party or the debtor.

13 Pa.C.S. § 9203 Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites.

(a) Attachment.--A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral unless an agreement 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 parties with respect to the collateral only if all of the following apply: (1) Value has been given. (2) The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party. (3) One of the following conditions is met: (i) The debtor has signed a security agreement which provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned. (ii) The collateral is not a certificated security and is in the possession of the secured party under section 9313 (relating to when possession by or delivery to secured party perfects security interest without filing) pursuant to the debtor's security agreement. (iii) The collateral is a certificated security in registered form, and the security certificate has been delivered to the secured party under section 8301 (relating to delivery) pursuant to the debtor's security agreement. (iv) The collateral is controllable accounts, controllable electronic records, controlled payment intangibles, deposit accounts, electronic documents, investment property or letter-of-credit rights and the secured party has control under section 7106 (relating to control of electronic document of title), 9104 (relating to control of deposit account), 9106 (relating to control of investment property), 9107 (relating to control of letter-of-credit right) or 9107.1 (relating to control of controllable electronic record, controllable account or controllable payment intangible) pursuant to the debtor's security agreement. (v) The collateral is chattel paper and the secured party has possession and control under section 9314.1 (relating to perfection by possession and control of chattel paper) pursuant to the debtor's security agreement. (c) Other Title 13 provisions.--Subsection (b) is subject to sections 4210 (relating to security interest of collecting bank in items, accompanying documents and proceeds), 5118 (relating to security interest of issuer or nominated person), 9110 (relating to security interests arising under Division 2 or 2A) and 9206 (relating to security interest arising in purchase or delivery of financial asset). (d) When person becomes bound by another person's security agreement.--A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this division or by contract: (1) the security agreement becomes effective to create a security interest in the person's property; or (2) the person becomes generally obligated for the obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person. (e) Effect of new debtor becoming bound.--If a new debtor becomes bound as debtor by a security agreement entered into by another person: (1) the agreement satisfies subsection (b)(3) with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and (2) another agreement is not necessary to make a security interest in the property enforceable. (f) Proceeds and supporting obligations.--The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by section 9315 (relating to secured party's rights on disposition of collateral and in proceeds) and is also attachment of a security interest in a supporting obligation for the collateral. (g) Lien securing right to payment.--The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also attachment of a security interest in the security interest, mortgage or other lien. (h) Security entitlement carried in securities account.--The attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account. (i) Commodity contracts carried in commodity account.--The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity contracts carried in the commodity account. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (b)(3). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9203 is referred to in sections 4210, 5118, 9102, 9109, 9110, 9316, 9317, 9508, 9703, 9704, 9709, 91132, 91133 of this title.

13 Pa.C.S. § 9204 After-acquired property; future advances.

(a) After-acquired collateral.--Except as otherwise provided in subsection (b), a security agreement may create or provide for a security interest in after-acquired collateral. (b) When after-acquired property clause not effective.--Subject to subsection (b.1), a security interest does not attach under a term constituting an after-acquired property clause to: (1) consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within ten days after the secured party gives value; or (2) a commercial tort claim. (b.1) Limitation.--Subsection (b) does not prevent a security interest from attaching: (1) to consumer goods as proceeds under section 9315(a) (relating to secured party's rights on disposition of collateral and in proceeds) or commingled goods under section 9336(c) (relating to commingled goods); (2) to a commercial tort claim as proceeds under section 9315(a); or (3) under an after-acquired property clause to property that is proceeds of consumer goods or a commercial tort claim. (c) Future advances and other value.--A security agreement may provide that collateral secures, or that accounts, chattel paper, payment intangibles or promissory notes are sold in connection with, future advances or other value, whether or not the advances or value are given pursuant to commitment. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (b) and added subsec. (b.1). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations.

13 Pa.C.S. § 9205 Use or disposition of collateral permissible.

(a) When security interest not invalid or fraudulent.--A security interest is not invalid or fraudulent against creditors solely because any of the following apply: (1) The debtor has the right or ability to: (i) use, commingle or dispose of all or part of the collateral, including returned or repossessed goods; (ii) collect, compromise, enforce or otherwise deal with collateral; (iii) accept the return of collateral or make repossessions; or (iv) use, commingle or dispose of proceeds. (2) The secured party fails to require the debtor to account for proceeds or replace collateral. (b) Requirements of possession not relaxed.--This section does not relax the requirements of possession if attachment, perfection or enforcement of a security interest depends upon possession of the collateral by the secured party.

13 Pa.C.S. § 9206 Security interest arising in purchase or delivery of financial asset.

(a) Security interest when person buys through securities intermediary.--A security interest in favor of a securities intermediary attaches to a person's security entitlement if: (1) the person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and (2) the securities intermediary credits the financial asset to the buyer's securities account before the buyer pays the securities intermediary. (b) Security interest secures obligation to pay for financial asset.--The security interest described in subsection (a) secures the person's obligation to pay for the financial asset. (c) Security interest in payment against delivery transaction.--A security interest in favor of a person that delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if all of the following apply: (1) The security or other financial asset: (i) in the ordinary course of business is transferred by delivery with any necessary indorsement or assignment; and (ii) is delivered under an agreement between persons in the business of dealing with such securities or financial assets. (2) The agreement calls for delivery against payment. (d) Security interest secures obligation to pay for delivery.--The security interest described in subsection (c) secures the obligation to make payment for the delivery. Cross References. Section 9206 is referred to in sections 9203, 9309 of this title.

13 Pa.C.S. § 9207 Rights and duties of secured party having possession or control of collateral.

(a) Duty of care when secured party in possession.--Except as otherwise provided in subsection (d), a secured party shall use reasonable care in the custody and preservation of collateral in the secured party's possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed. (b) Expenses, risks, duties and rights when secured party in possession.--Except as otherwise provided in subsection (d), if a secured party has possession of collateral: (1) Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use or operation of the collateral are chargeable to the debtor and are secured by the collateral. (2) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage. (3) The secured party shall keep the collateral identifiable, but fungible collateral may be commingled. (4) The secured party may use or operate the collateral: (i) for the purpose of preserving the collateral or its value; (ii) as permitted by an order of a court having competent jurisdiction; or (iii) except in the case of consumer goods, in the manner and to the extent agreed by the debtor. (c) Duties and rights when secured party in possession or control.--Except as otherwise provided in subsection (d), a secured party having possession of collateral or control of collateral under section 7106 (relating to control of electronic document of title), 9104 (relating to control of deposit account), 9105 (relating to control of electronic copy of record evidencing chattel paper), 9106 (relating to control of investment property), 9107 (relating to control of letter-of-credit right) or 9107.1 (relating to control of controllable electronic record, controllable account or controllable payment intangible): (1) may hold as additional security any proceeds, except money or funds, received from the collateral; (2) shall apply money or funds received from the collateral to reduce the secured obligation unless remitted to the debtor; and (3) may create a security interest in the collateral. (d) Buyer of certain rights to payment.--If the secured party is a buyer of accounts, chattel paper, payment intangibles or promissory notes or a consignor: (1) Subsection (a) does not apply unless the secured party is entitled under an agreement: (i) to charge back uncollected collateral; or (ii) otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral. (2) Subsections (b) and (c) do not apply. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (c). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9207 is referred to in sections 9601, 9602 of this title.

13 Pa.C.S. § 9208 Additional duties of secured party having control of collateral.

(a) Applicability of section.--This section applies to cases in which there is no outstanding secured obligation and the secured party is not committed to make advances, incur obligations or otherwise give value. (b) Duties of secured party after receiving demand from debtor.--Within ten days after receiving a signed demand by the debtor: (1) A secured party having control of a deposit account under section 9104(a)(2) (relating to control of deposit account) shall send to the bank with which the deposit account is maintained a signed record which releases the bank from any further obligation to comply with instructions originated by the secured party. (2) A secured party having control of a deposit account under section 9104(a)(3) shall: (i) pay the debtor the balance on deposit in the deposit account; or (ii) transfer the balance on deposit into a deposit account in the debtor's name. (3) A secured party, other than a buyer, having control under section 9105 (relating to control of electronic copy of record evidencing chattel paper) of an authoritative electronic copy of a record evidencing chattel paper shall transfer control of the electronic copy to the debtor or a person designated by the debtor. (i) (Deleted by amendment). (ii) (Deleted by amendment). (iii) (Deleted by amendment). (4) A secured party having control of investment property under section 8106(d)(2) (relating to control of security entitlement) or 9106(b) (relating to control of commodity contract) shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained a signed record which releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party. (5) A secured party having control of a letter-of-credit right under section 9107 (relating to control of letter-of-credit right) shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party a signed release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party. (6) A secured party having control under section 7106 (relating to control of electronic document of title) of an authoritative electronic copy of an electronic document of title shall transfer control of the electronic copy to the debtor or a person designated by the debtor. (i) (Deleted by amendment). (ii) (Deleted by amendment). (iii) (Deleted by amendment). (7) A secured party having control under section 12105 (relating to control of controllable electronic record) of a controllable electronic record, other than a buyer of a controllable account or controllable payment intangible evidenced by the controllable electronic record, shall transfer control of the controllable electronic record to the debtor or a person designated by the debtor. (Apr. 16, 2008, P.L.57, No.13, eff. 60 days; July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (b). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9208 is referred to in section 9625 of this title.

13 Pa.C.S. § 9209 Duties of secured party if account debtor has been notified of assignment.

(a) Applicability of section.--Except as otherwise provided in subsection (c), this section applies if: (1) there is no outstanding secured obligation; and (2) the secured party is not committed to make advances, incur obligations or otherwise give value. (b) Duties of secured party after receiving demand from debtor.--Within ten days after receiving a signed demand by the debtor, a secured party shall send to an account debtor that has received notification under section 9406(a) (relating to discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles and promissory notes ineffective) or 12106(a) (relating to discharge of account debtor on controllable account or controllable payment intangible) of an assignment to the secured party as assignee a signed record which releases the account debtor from any further obligation to the secured party. (c) Inapplicability to sales.--This section does not apply to an assignment constituting the sale of an account, chattel paper or payment intangible. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. Act 41 amended subsec. (b). See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9209 is referred to in section 9625 of this title.

13 Pa.C.S. § 9210 Request for accounting; request regarding list of collateral or statement of account.

(a) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Request." A: (1) request for an accounting; (2) request regarding a list of collateral; or (3) request regarding a statement of account. "Request for an accounting." A record signed by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship which is the subject of the request. "Request regarding a list of collateral." A record signed by a debtor requesting that the recipient approve or correct a list of what the debtor believes to be the collateral securing an obligation and reasonably identifying the transaction or relationship which is the subject of the request. "Request regarding a statement of account." A record signed by a debtor requesting that the recipient approve or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral as of a specified date and reasonably identifying the transaction or relationship which is the subject of the request. (b) Duty to respond to requests.--Subject to subsections (c), (d), (e) and (f), a secured party, other than a buyer of accounts, chattel paper, payment intangibles or promissory notes or a consignor, shall comply with a request within 14 days after receipt: (1) in the case of a request for an accounting, by signing and sending to the debtor an accounting; and (2) in the case of a request regarding a list of collateral or a request regarding a statement of account, by signing and sending to the debtor an approval or correction. (c) Request regarding list of collateral; statement concerning type of collateral.--A secured party that claims a security interest in all of a particular type of collateral owned by the debtor may comply with a request regarding a list of collateral by sending to the debtor a signed record including a statement to that effect within 14 days after receipt. (d) Request regarding list of collateral; no interest claimed.--A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the request and claimed an interest in the collateral at an earlier time shall comply with the request within 14 days after receipt by sending to the debtor a signed record: (1) disclaiming any interest in the collateral; and (2) if known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient's interest in the collateral. (e) Request for accounting or regarding statement of account; no interest in obligation claimed.--A person that receives a request for an accounting or a request regarding a statement of account, claims no interest in the obligations when it receives the request and claimed an interest in the obligations at an earlier time shall comply with the request within 14 days after receipt by sending to the debtor a signed record: (1) disclaiming any interest in the obligations; and (2) if known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient's interest in the obligations. (f) Charges for responses.--A debtor is entitled without charge to one response to a request under this section during any six-month period. The secured party may require payment of a charge not exceeding $25 for each additional response. (July 1, 2024, P.L.450, No.41, eff. 60 days) 2024 Amendment. See section 1 of Act 41 in the appendix to this title for special provisions relating to findings and declarations. Cross References. Section 9210 is referred to in sections 9602, 9625 of this title.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=13Fetched: 10/16/2026