Which fixture-related consideration may exempt repossession?

• A. Confirm security interest.
• B. Fixtures filing must be completed before repossession.
• C. Fixtures may exempt from repo if proper fixture filing were not initially completed.
• D. End of lease and option is not excercised.

Answer: (C)

Fixtures attach to real property, so a lender must perfect its security interest in those fixtures with a fixture filing filed in the real property records where the fixtures are located. If that fixture filing was never completed (or not done correctly) at the outset, the lender’s interest in the fixtures is not perfected. Without perfection, the lender does not have priority against the property owner or other claimants, and the debtor or owner can challenge a self-help repossession of the fixtures. In such a scenario, the fixtures may effectively be exempt from repossession or require a different remedy (like a court proceeding) because the lender’s security interest in them is not properly perfected. This is why the fixture filing status is the crucial factor—the absence of a proper fixture filing can create an exemption from repossession.