If a security interest or agricultural lien is perfected by a filed financing statement providing information described in Section 36-9-516(b)(5) which is incorrect at the time the financing statement is filed:

1. (1) the security interest or agricultural lien is subordinate to a conflicting perfected security interest in the collateral to the extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and
2. (2) a purchaser, other than a secured party, of the collateral takes free of the security interest or agricultural lien to the extent that, in reasonable reliance upon the incorrect information, the purchaser gives value and, in the case of tangible chattel paper, tangible documents, goods, instruments, or a security certificate, receives delivery of the collateral.

HISTORY: 2001 Act No. 67, Section 12; 2014 Act No. 213 (S.343), Section 44, eff October 1, 2014.

Editor's Note

2014 Act No. 213, Section 51, provides as follows:

"SECTION 51. This act becomes effective on October 1, 2014. It applies to transactions entered into and events occurring after that date."

Effect of Amendment

2014 Act No. 213, Section 44, in subsection (2), inserted "tangible" before "chattel paper" and "documents".