Legislative Bill Regarding Insuring Title and Liens in Personal Property or Fixtures Becomes Law
On March 16, 2015, Governor Ricketts approved LB 180, which amends Nebraska Revised Statutes sections 44-201 and 44-1981 to allow title companies to insure interests in personal property or fixtures against adverse claims to title or security interests. Previously, Nebraska law limited title insurance to real property.
Under the law, as amended, secured parties and owners may insure the accuracy or completeness of the search or filing results obtained from public registries to determine liens in personal property or fixtures. In the context of the sale of assets, for example, a buyer can insure the assets are free of liens and protect against misfiled UCC-1 financing statements or fraudulently filed UCC-3 terminations or amendments.
Secured parties and owners can also now insure against: the existence of other liens; the invalidity, lack of priority, or unenforceability of their lien; and any other matter relating to the lien status of personal property or fixtures. A lender taking a security interest in valuable irrigation equipment, for example, may insure the existence, priority, and enforceability of its lien in the equipment.
National title insurance companies, such as First American Title Insurance Company and Fidelity National Title Insurance Company, currently offer policies insuring personal property and fixtures. Now buyers and secured parties can obtain these policies in Nebraska.
Lori J. Fortina, paralegal