Once you’ve obtained a lien search document for a potential purchase, here’s what to look for to make sure that piece of machinery is “free and clear.”
Whether the search document came from a recording office, a seller, or a third-party document retrieval service, it should include listings that include the following key information for each lien:
• The lien’s filing date.
• The debtor’s name.
• The lien’s expiration date.
Some lien search listings also include the creditor’s name. Most recording offices also indicate a retrieval date for their records, which tells you whether they are up to date.
Though some recording offices have same-day turnaround,  others may have a gap of weeks before new lien filings will show up on a lien search document.   Reasons for such delay can include lack of manpower, high volume of filings, inclement weather, holidays or simply  the way their particular record-keeping system is set up.
It is important to note the date that each lien was filed.  Liens are perfected in the order they are filed. This shows you which creditor has first priority if more than one has an interest. This also demonstrates why you need a lien release from all interested parties, not just the first lien holder.
If the holder of a lien on your specific equipment  releases for a pay-off amount, the next creditor may be a blanket lien holder with  an interest in that equipment. If you do not get a release from them, their lien can follow the machine. When a release is requested from the blanket lien holder, that creditor can be shown the earlier lien and informed whether any sale proceeds were left after that lien was satisfied.  
The debtor’s name is essential.  You need to know that you have received the liens for the correct party.  If you are in doubt the correct debtor is on the filings, consider the address where the creditor places them.
If there is more than one debtor listed, the second name is considered an additional debtor. They have backed the note for this particular deal. If this additional debtor is on a lien with equipment you are interested in, you can cross-check their liens for other equipment as well. This can help you verify legal ownership for your proposed purchase.
Other things to note about the dates listed on a lien search document:
• A UCC-1, also known as an initial finance statement, expires after five years, although there are some exceptions, such as transmitting utility liens., and tax liens.
• A creditor has six months before a lien lapse date to file for continuation.   Once a lien has lapsed, the creditor no longer has a perfected interest. They lose their position for collecting on the sale and the lien no longer follows the machine.
One more thing to check as you review the lien search document:
Make sure the filing number on the listings agree with the numbers on each UCC. You should always make certain these align. This ensures you are not missing pages of liens. Human error happens. A page might have been accidentally missed when the documents were retrieved or scanned.  It is your responsibility to know whether your lien search documents are complete.

You should be comfortable in your deals. Ground Clearance can help with that. We provide an explanation of the information you receive and we are always happy to answer questions. Call 402-484-5071 or visit www.GroundClearanceLLC.com


–by Sue McKee, Ground Clearance LLC