SENATE BILL REPORT

SB 6754

BYSenator Nelson

Perfecting certain security interests upon recording.

Senate Committee on Law & Justice

Senate Hearing Date(s):January 30, 1990

Majority Report:     Do pass.

     Signed by Senators Nelson, Chairman; McCaslin, Vice Chairman; Madsen, Newhouse, Patrick, Rasmussen, Thorsness.

Senate Staff:Vicki E. Schur (786-7415)

                February 14, 1990

AS PASSED SENATE, FEBRUARY 13, 1990

BACKGROUND:

In 1988, the Bankruptcy Court for the Western District of Washington held that an assignment of rents taken as security for a loan is an unperfected lien until the lender takes possession of the rents or has a receiver appointed.  In 1989, the Legislature passed an act providing that the assignment of rents and loans for security are perfected as of the time of recording and no further action is required by the holder to perfect the security interest.

The 1989 legislation does not have a retroactive effect on assignments of rents.

SUMMARY:

Assignment of rents and loans for security are perfected as of the time of recording and no further action is required by the holder to perfect the security interest even if recorded before July 23, 1989, the effective date of the 1989 legislation.

Appropriation:  none

Revenue:   none

Fiscal Note:    none requested

Senate Committee - Testified:   Larry Shannon, Washington Mortgage Bankers Association