Security Interest in Movable Property Act, 2019
The Act comes into force on a date appointed by the Minister by statutory instrument.
AI-assisted research synopsis — verify against the official legal text below.
- Jurisdiction
- Uganda
- Instrument
- Act or statute
- Citation
- Act 8 of 2019
- Version
- 30 Apr 2019
- Language
- en
- Official source
- View official record ↗
Source attribution: Source: Uganda Legal Information Institute
Statute overview
About this statute
The Act comes into force on a date appointed by the Minister by statutory instrument. This section provides definitions of terms used in the Act (interpretation). This section states the scope of application: the Act applies to security rights and security interests in movable property and lists specific inclusions and exclusions. A security interest in a tangible asset does not extend to the asset's intellectual property, and a security interest in the intellectual property of a tangible asset does not extend to the tangible asset. A security interest in a negotiable document extends to the tangible asset covered by the document if the issuer is in possession of the asset when the security interest is created.
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Legal text
Provisions of Security Interest in Movable Property Act, 2019
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Part I
Preliminary
- 1 Verify source ↗
Preliminary - Commencement
AI-assisted research summary: The Act comes into force on a date appointed by the Minister by statutory instrument.
Section Commencement Section This Act shall come into force on a date appointed by the Minister , by statutory instrument. - 2 Verify source ↗
Preliminary - Interpretation
AI-assisted research summary: This section provides definitions of terms used in the Act (interpretation).
Section Interpretation Section In this Act, unless the context otherwise requires— " accession " means a tangible asset that is installed in or is physically attached to, another movable property in such a manner that the identity of the tangible asset is not lost; " accounts receivable " means a payment of a monetary obligation that is not evidenced by a negotiable instrument or an investment security; " bureau " means the Uganda Registration Services Bureau, established by the Uganda Registration Services Bureau Act, Cap. 210 ; " cash proceeds " means money, cheques, bank drafts on deposit accounts in financial institutions derived from lease, sale or other disposition of movable collateral ; " chattel " means personal property that can be completely transferred by delivery or property in respect of which a valid document of title exists; " collateral " means movable property that is subject to a security interest ; " commercial consignment " means a consignment where a consignor reserves an interest in the tangible assets that the consignor delivers to the consignee for the purpose of sale, lease or other disposition and both the consignor and consignee in the ordinary course of business, deal in those assets; " commingled goods " means goods that are physically united with other goods in such a manner that their identity is lost in a product or mass; " competing claimant " means a creditor of a grantor or other person with rights in the collateral that may be in competition with the rights of the secured creditor in the same collateral , including— (a) another secured creditor of the grantor that has a security interest in the same collateral ; (b) another creditor of the grantor that has a right in the same collateral ; (c) a representative of the grantor in insolvency proceedings; or (d) a buyer or other transferee, lessee or licensee of collateral ; " debtor " means— (a) a person who owes payment or performance of a secured obligation , whether or not that person owns or has rights in the collateral ; (b) a seller of receivables; (c) a lessee under a lease; or (d) where the debtor and the owner of the collateral are not the same person — (i) in any provision dealing with the collateral , the owner of the collateral ; (ii) in any provision dealing with the obligation, the person under the obligation; and (iii) both the debtor and the owner, where the context permits or requires; " default " means the occurrence of an event that constitutes breach under the terms of an agreement between the grantor and the secured creditor ; " deposit account " means a demand, time, savings, passbook, or similar account maintained with a financial institution licensed by the Bank of Uganda or under any law in Uganda; " document of title " means a document which in the regular course of business or financing is treated as adequately evidencing that the person in possession of it is entitled to receive, hold and dispose of the goods it covers; " financial institution " means a bank, credit institution or microfinance deposit taking institution licensed under the Financial Institutions Act or any other law; " financial lease " means a lease of a tangible asset where— (a) the lessee automatically becomes the owner of the tangible asset; (b) the lessee may become the owner of the tangible asset by payment of a nominal price at the end of the lease; or (c) the tangible asset has not more than a nominal residual value; " fixture " means a tangible asset that is physically attached or is intended to become physically attached to immovable property without losing its separate identity; " grantor " means— (a) a person that creates a security interest to secure either its own obligation or that of another person ; (b) a buyer that acquires goods whose title is to be retained by the seller; (c) a grantor of any charge, chattel mortgage, pledge or similar interest in movable property ; (d) a lessee under a financial lease ; (e) consignee who receives goods from another person under a commercial consignment ; or (f) a seller of accounts receivable and a lessee under an operating lease, even though the receivable or the object of the lease does not secure an obligation; " intangible asset " means accounts receivable , deposit accounts, electronic securities and intellectual property; " Intellectual property " means— (a) literary, scientific and artistic works protected under the Copyright and Neighbouring Rights Act, 2006; (b) industrial property rights protected under the Industrial Property Act, 2014; (c) trade mark as protected in the Trademarks Act, 2010; and (d) any other related right. " inventory " means tangible assets that are— (a) held for sale or lease in the ordinary course of business; and (b) raw materials, work in progress and materials used in a business; " lien " means a right in property which is created by operation of law, by an order of court or other legal authority, or by the authority of an administrator in an insolvency proceeding but does not include a right of retention; " Minister " means the Minister responsible for justice; " Money lender " has the meaning assigned to it under the Tier 4 Microfinance Institutions and Money Lenders Act, 2016; " movable property " includes goods, tangible assets , intangible assets, investment securities , money, negotiable instruments and documents of title; " negotiable instrument " means a bill of exchange, cheque or promissory note, that satisfies the requirements for negotiability under the law governing negotiable instruments; " perfected security interest " means a security interest that is protected from third party claims through any of the methods prescribed in section 12 of this Act; " unperfected security interest " means a security interest that is not protected from third party claims as prescribed in this Act; " person " includes a company, association or body of persons corporate or unincorporate; " possession " means having physical custody of a tangible asset by a person ; " proceeds " includes whatever is acquired upon a sale, lease or other disposition of a collateral , such as money, property exchanged for the original collateral , property purchased with cash proceeds , a deposit account into which cash proceeds are deposited, and a right to insurance payment or other compensation for loss or damage of the collateral ; " registrar " includes the Registrar General, an assistant registrar or other officer performing the duty of registration of security interests in movable property under this Act; " secured creditor " means a person in whose favor a security interest is created under a security interest agreement and includes— (a) a chargee under any type of charge or chattel mortgagee and a holder of any type of consensual lien ; (b) a seller who reserved title in the goods sold; (c) a financial lessor; and (d) a buyer of accounts receivable , a commercial consignor and an operating lessor under an operation lease but only for purposes of publicity and priority; " secured obligation " means an obligation secured by a security interest ; " securities " include— (a) debentures, stock, or bonds issued or proposed to be issued by a government or body corporate; (b) any right, warrant, option, or futures in respect of any debenture, stocks, shares, bonds, notes or in respect of commodities; (c) bills of exchange; (d) promissory notes; or (e) certificates of deposit issued by a bank or financial institution ; " security interest " means a property right in movable property that is created by agreement to secure payment or other performance of an obligation, any type of charge over movable property , chattel mortgage and consensual lien , and includes— (a) a retention of title in movable property ; (b) a right under a financial or operating lease; (c) a right of a transferee of accounts receivable ; and (d) a right of the commercial consignor even if it does not secure payment or other performance of an obligation; " tangible assets " has the meaning assigned to " chattel "; " warehouse receipt " has the meaning assigned to it under the Warehouse Receipt Systems Act, 2006. - 3 Verify source ↗
Preliminary - Scope of application
AI-assisted research summary: This section states the scope of application: the Act applies to security rights and security interests in movable property and lists specific inclusions and exclusions.
Section Scope of application Section This Act applies to security rights in movable property where the movable property is— This Act also applies to security interests in movable property where— For the purposes of subsection (1) (a), (b) and (c), "location" is the location— This Act does not apply to— a tangible asset located in Uganda; an intangible asset , where the grantor of the asset is located in Uganda; a tangible or intangible asset which is ordinarily used outside Uganda, where the grantor of the asset is located in Uganda; a movable property attached to immovable property. the collateral is a deposit account maintained in a financial institution that has a place of business in Uganda; the transaction involves a movable property that secures a payment or the performance of an obligation, without regard to the form or ownership of the movable property including a floating charge, a fixed charge, a pledge, a debenture, a warehouse receipt and any other transaction that secures payment or performance of an obligation with movable property ; the security interest is a lien in movable property created by judgment of court; and the security interest is for the sale of accounts receivable , commercial consignments and for the lease of goods for more than one year. at the time of the creation of a security interest ; where perfection is achieved; or where the priority of the claimants in the security interest of a collateral is determined, at the time the dispute arose. For the purposes of subsection (1) (b) and (c), a grantor is located in Uganda where the grantor has a place of business in Uganda and where the grantor does not have a place of business in Uganda, the ordinary residence of the grantor be deemed to be the location of the grantor . the creation, lease or transfer of an interest in immovable property; a sale of accounts receivable as part of the sale of a business out of which the accounts receivable arose; the assignment of accounts receivable where the assignment is only for the purpose of collection action; and the transfer of a claim for compensation of an employee.
Part II
Creation of security interest
- 10 Verify source ↗
Creation of security interest - Security interest, tangible asset and intellectual property
AI-assisted research summary: A security interest in a tangible asset does not extend to the asset's intellectual property, and a security interest in the intellectual property of a tangible asset does not extend to the tangible asset.
Section Security interest, tangible asset and intellectual property Section A security interest in a tangible asset does not extend to the intellectual property of the tangible asset, and a security interest in the intellectual property of a tangible asset does not extend to the tangible asset. - 11 Verify source ↗
Creation of security interest - Tangible assets covered by negotiable documents
AI-assisted research summary: A security interest in a negotiable document extends to the tangible asset covered by the document if the issuer is in possession of the asset when the security interest is created.
Section Tangible assets covered by negotiable documents Section A security interest in a negotiable document extends to the tangible asset covered by the document, provided that the issuer of the document is in possession of the asset at the time the security interest in the document is created. - 4 Verify source ↗
Creation of security interest - Creation of security interest
AI-assisted research summary: An agreement for a security interest becomes enforceable only when certain formal requirements are met (for example, the grantor must sign and must have rights or power to encumber the collateral).
Section Creation of security interest Section A security interest may be created— An agreement for a security interest becomes enforceable where— the agreement— in any type or combination of movable property ; in a part of or an undivided interest in movable property ; in a generic category of movable property ; or in all of the movable property of the grantor . A security interest is created by a transaction that secures payment or performance of an obligation, without regard to the form of the transaction. the grantor or the owner, has a right in the collateral or has the power to encumber the collateral ; is signed by the grantor ; identifies the secured creditor and the grantor ; is witnessed by a third party; describes the collateral in a manner that reasonably allows its identification, as may be prescribed by regulations made under this Act; describes the secured obligation in a manner that reasonably allows for its identification, whether pre-existing, present or future, determined or determinable, conditional or unconditional, fixed or fluctuating or a line of credit, as may be prescribed by regulations made under this Act; and indicates the maximum amount for which the security interest is enforceable; and the secured creditor gives the collateral a monetary value. Where the secured creditor is a money lender, the transaction shall in addition to subsection (3) only be enforceable if it complies with the provisions of Tier 4 Microfinance Institutions and Money Lenders Act. A security interest shall be taken as given by a grantor to a creditor for the sole purpose of creating a security interest and shall not operate as a transfer of an interest in property from the grantor to the creditor. Where a grantor signs a transfer as a condition for a grant of a security interest under this Act, the transfer shall be void. - 5 Verify source ↗
Creation of security interest - Effectiveness of agreement creating security interest and duty of good faith
AI-assisted research summary: An agreement creating a security interest is effective according to its terms between the parties and is enforceable against third parties; a duty of good faith applies to both the grantor and the secured creditor.
Section Effectiveness of agreement creating security interest and duty of good faith Section An agreement to create a security interest is effective according to its terms, between the parties to it and is enforceable against a third party. A duty of good faith applies to both the grantor and the secured creditor . - 6 Verify source ↗
Creation of security interest - Rights and duties where collateral is in possession of secured creditor
AI-assisted research summary: Where collateral is held by the secured creditor, the secured creditor must take reasonable care to preserve it; reasonable expenses (including insurance) are chargeable to the grantor and secured by the collateral; the grantor bears uninsured loss risk; the secured creditor may hold increases or profits as additional security but must remit or apply them to the obligation; and the secured creditor may use or operate the collateral to preserve it subject to limits.
Section Rights and duties where collateral is in possession of secured creditor Section Unless otherwise agreed, where collateral is in the possession of the secured creditor — A secured creditor has a duty to use reasonable care to preserve collateral in his or her possession . In the case of a negotiable instrument or chattel paper, reasonable care referred to in subsection (1) includes taking necessary steps to preserve rights against prior parties, unless otherwise agreed. reasonable expenses, including the cost of any insurance incurred in the custody, preservation, use or operation of the collateral are chargeable to the grantor and are secured by the collateral ; the risk of accidental loss or damage is on the grantor to the extent of any deficiency in any effective insurance cover; and the secured creditor may hold as additional security, any increase or profits from the collateral , except that the profits or money must be remitted to the grantor or must be applied in reduction of the secured obligation ; A secured creditor may use or operate the collateral for the purpose of preserving the collateral or its value or pursuant to a court order or, except in the case of consumer goods, in the manner and extent agreed. Subsections (1), (2), (3) and (4) apply whether or not possession arises from the default of the grantor . - 7 Verify source ↗
Creation of security interest - Secured creditor to supply information
AI-assisted research summary: Certain persons may request a secured creditor to update them about collateral status or unpaid debt; the secured creditor must respond within ten working days; aggrieved persons may apply to court which can order compliance or treat the security interest as unperfected or extinguished if orders are ignored.
Section Secured creditor to supply information Section A grantor , debtor , a judgment creditor, a person with interest in the personal property of the grantor or an authorised agent of any of these, may request the secured creditor to update him or her on the— Where the secured creditor fails to comply with subsection (2), a person aggrieved by that decision may apply to court which may make an order— status of the collateral ; or amount of unpaid debt secured by the security interest . The secured creditor shall, not later than ten working days after the day on which the request is received respond to the request. requiring the secured creditor to comply; extending the time for compliance; or requiring any person to take any other steps it considers necessary to ensure compliance. Where, without reasonable excuse, the secured creditor fails to comply with any order made under subsection (3), the court may order that the security interest of the secured creditor in respect of which the request was made is to be treated as unperfected or extinguished and that any related registration be discharged. - 8 Verify source ↗
Creation of security interest - Continuation of security interest after transfer of collateral
AI-assisted research summary: A security interest continues in collateral despite its sale, lease, license, exchange or other disposition unless the Act or an agreement between the grantor and the secured creditor provides otherwise.
Section Continuation of security interest after transfer of collateral Section Once created, a security interest continues in the collateral notwithstanding a sale, lease, license, exchange, or other disposition, of the collateral , except as otherwise provided in this Act or agreed upon by the grantor and the secured creditor . Unless otherwise agreed to by the parties, where a collateral that is the subject of an agreement for security interest is sold, the security interest in the collateral automatically extends to the proceeds of collateral , whether or not the agreement contains a description of the proceeds . Where the proceeds are credited to a deposit account , and are commingled with other funds, the proceeds shall be dealt with as may be prescribed by regulations made under this Act. - 9 Verify source ↗
Creation of security interest - Security interest in tangible assets continues in commingled goods
AI-assisted research summary: A security interest created in a tangible asset that becomes a commingled good continues in the commingled good, but is limited to the value of the collateral immediately before it became part of the commingled good.
Section Security interest in tangible assets continues in commingled goods Section A security interest created in a tangible asset which becomes a commingled good continues in the commingled good, except that the security interest is limited to the value of the collateral immediately before it becomes part of the commingled good.
Part III
Perfection of security interest
- 12 Verify source ↗
Perfection of security interest - Methods of perfecting security interests in collateral
AI-assisted research summary: A security interest created under Part II is perfected when (a) a notice is entered in the register, (b) the secured creditor or their agent has possession of the collateral, or (c) for a deposit account the secured creditor or their agent has control of the deposit account; perfection can occur automatically in specified circumstances, and the method of perfection may be changed at any time provided there is no interruption in perfection.
Section Methods of perfecting security interests in collateral Section A security interest in collateral created under Part II of this Act is perfected where— For the purposes of subsection (1) (c), control of a deposit account exists— a notice of the security interest in the collateral is entered in the register; the secured creditor , or a person acting on behalf of the secured creditor has possession of the collateral ; or the collateral is a deposit account and the secured creditor or a person acting on behalf of the secured creditor has control of the deposit account . For purposes of subsection (1) (b), a secured creditor is not in possession of collateral that is in the actual or apparent possession or control of the grantor or an agent of the grantor . automatically upon the creation of the security interest , if the financial institution that maintains the deposit account is the secured creditor ; and upon the conclusion of an agreement for the control of a deposit account made by the financial institution , the grantor and the secured creditor . The method used to perfect a security interest under subsection (1) may be changed at any time and the security interest shall remain perfected notwithstanding a change in the means of perfection, provided that there is no time when the security interest is not perfected. Where the security interest effected under subsection (1) is in respect of a document of title , the security interest that extends to the tangible asset covered by the document of title shall also be perfected. - 13 Verify source ↗
Perfection of security interest - Methods of perfecting proceeds of security interests
AI-assisted research summary: If proceeds are not money, accounts receivable, negotiable instruments or a right to payment to a bank account, the secured creditor must perfect the security interest in those proceeds using methods in section 12(1) or regulations.
Section Methods of perfecting proceeds of security interests Section Where collateral is dealt with to give rise to proceeds in form of money, accounts receivable , negotiable instruments or a right to payment of funds to a bank account, the proceeds of the collateral shall be perfected without any further action. Where the proceeds are not of the type described in subsection (1), the secured creditor shall perfect the security interest in the proceeds using any of the methods in section 12 (1) or as may be prescribed by regulations made under this Act. - 14 Verify source ↗
Perfection of security interest - Transfer of security interests
AI-assisted research summary: If a security interest that was perfected by registering a notice under section 12(1)(a) is transferred, the transferor must register an amendment to that notice.
Section Transfer of security interests Section Where all or part of a security interest that is perfected by the registration of a notice under section 12 (1) (a), is transferred, the transferor shall register an amendment to the notice. Where a security interest that is not perfected by registration is transferred, the notice in which the transferee of the security interest is disclosed as the secured creditor of the security interest shall be registered under section 12 (1) (a). Registration under this section shall be as prescribed by regulations made under this Act. - 15 Verify source ↗
Perfection of security interest - Security interest perfected outside Uganda
AI-assisted research summary: When movable property with a security interest perfected under the law of another state is relocated or transferred to Uganda, this Act applies to the property and the security interest remains perfected; a person who perfected such an interest abroad may also perfect it in Uganda.
Section Security interest perfected outside Uganda Section Where a security interest in movable property is perfected against a third party under the law of a state other than Uganda, and the property is relocated or transferred to Uganda, this Act shall apply to the property and the security interest remains perfected. Subsection (1) shall apply where the country in which the collateral was perfected has entered into reciprocal arrangements with Uganda to recognise and continue the perfection of security interests created in Uganda. Nothing shall prevent a person who has perfected a security interest under the laws of a State other than Uganda to perfect the security interest in Uganda where the collateral is relocated or transferred to Uganda. - 16 Verify source ↗
Perfection of security interest - Effect of transfer of collateral outside Uganda
AI-assisted research summary: Collateral perfected in Uganda remains perfected if moved outside Uganda; the secured creditor may also perfect another security interest by the methods in section 12 or regulations.
Section Effect of transfer of collateral outside Uganda Section This Act shall continue to apply to collateral perfected in Uganda and relocated or transferred outside the territorial jurisdiction of Uganda. Where collateral that is perfected in Uganda is transferred beyond the territorial jurisdiction of Uganda, the collateral shall remain perfected against third party claims. Where collateral is transferred or relocated beyond the territorial jurisdiction of Uganda, the secured creditor may in addition to the collateral already perfected, perfect another security interest using any methods in section 12 or as may be prescribed by regulations.
Part IV
Registration of security interests in movable property
- 17 Verify source ↗
Registration of security interests in movable property - Designation of Registrar
AI-assisted research summary: The Registrar General appointed under the Uganda Registration Services Bureau Act, Cap. 210 shall be the registrar of security interests in movable property under this Act; the functions bestowed on the bureau under this Act shall be performed by the Registrar.
Section Designation of Registrar Section The Registrar General appointed under the Uganda Registration Services Bureau Act, Cap. 210 shall be the registrar of security interest in movable property under this Act. The functions bestowed on the bureau under this Act shall be performed by the Registrar. - 18 Verify source ↗
Registration of security interests in movable property - Register of Security Interest in Movable Property
AI-assisted research summary: The bureau must establish and maintain an electronic register of security interests in movable property called the "register of Security Interest in Movable Property".
Section Register of Security Interest in Movable Property Section The bureau shall establish and maintain a register of security interests in movable property to be known as the "register of Security Interest in Movable Property". The register shall be maintained as an electronic records system and shall specify the nature of the security interest registered and details of the personal property over which the interest is created. - 19 Verify source ↗
Registration of security interests in movable property - Mode of registration of security interest
AI-assisted research summary: Initial and amendment notices for security interests in movable property must be registered electronically in the register and are effective from the date and time entered; registration requires payment of prescribed fees and written authorisation by the grantor, but may be made before creation of the security interest if authorised in writing.
Section Mode of registration of security interest Section An initial notice or amendment notice shall only be registered— A security interest in movable property shall be registered electronically in the register using an initial notice or amendment notice which shall be registered sequentially, in the order in which it is submitted for registration. after the creation of a security interest ; on the payment of the prescribed fees; and upon authorisation by the grantor in writing. Notwithstanding subsection (2), an initial notice or amendment notice may be registered before the creation of a security interest or the conclusion of a security agreement to which the initial notice or amendment notice relates if the registration of the initial notice or amendment notice is authorized by the grantor in writing. The register shall reflect the date and time when the information is entered in the register. Subject to section 25 , an initial notice or amendment notice shall be effective from the date and time when the information in the notice is entered in the register. For purposes of this section, a written security agreement is sufficient to constitute authorization by the grantor for the registration of an initial notice or amendment notice. - 20 Verify source ↗
Registration of security interests in movable property - One notice sufficient for multiple security interests
AI-assisted research summary: A single notice may be registered for two or more security interests created by the same grantor under two or more security interest agreements with the same secured creditor.
Section One notice sufficient for multiple security interests Section A single notice may be registered for two or more security interests created by the same grantor under two or more security interest agreements with the same secured creditor . - 21 Verify source ↗
Registration of security interests in movable property - Registration of a lien
AI-assisted research summary: A notice of a lien may be registered by the lien holder without the subject's consent; a judgment creditor may register a lien on a judgment debtor's property after obtaining a court order; and for an insolvent company a notice of lien may be registered by the court or by a liquidator appointed by the court.
Section Registration of a lien Section A notice of a lien may be registered by the lien holder without the consent of the subject of the lien . A notice of a lien on the property of a judgment debtor may be registered by the judgment creditor after obtaining a court order. A notice of lien on the property of an insolvent company may be registered by the court or a liquidator appointed by the court. - 22 Verify source ↗
Registration of security interests in movable property - Information required in an initial notice
AI-assisted research summary: An initial notice must include: the unique identification number and address of the grantor; the unique identification number and address of the secured creditor or their representative; a description of the collateral; the date and period of perfection of the registration; and any other information prescribed by the Minister by regulations.
Section Information required in an initial notice Section An initial notice shall contain the following information— the unique identification number and address of the grantor ; the unique identification number and address of the secured creditor or the representative of the secured creditor ; a description of the collateral ; the date and period of perfection of the registration; and any other information as may be prescribed by the Minister , by regulations. Where there is more than one grantor or secured creditor , the required information shall be entered separately for each grantor and each secured creditor . - 23 Verify source ↗
Registration of security interests in movable property - Period of perfection of initial notice
AI-assisted research summary: An initial notice is effective for the period the secured creditor states in the notice; that period may be extended by an amendment notice registered within six months before expiry; if an initial notice lapses without amendment the perfected security interest is discharged; the secured creditor may still perfect the security interest by other methods if the grantor has not fulfilled its obligations.
Section Period of perfection of initial notice Section An initial notice is effective for the period indicated by the secured creditor in the notice. The period of perfection of an initial notice may, within six months before the expiry of the period, be extended by registration of an amendment notice, for the period indicated by the secured creditor in the amendment notice. Where an initial notice lapses without amendment, the security interest that was perfected by the lapsed initial notice shall be discharged. The lapsing of an initial notice shall not preclude the secured creditor , where the grantor has not fulfilled its obligations under the agreement that created the security interest , from perfecting the security interest by any other method. - 24 Verify source ↗
Registration of security interests in movable property - Cancellation of initial or amendment notice
AI-assisted research summary: The secured creditor or grantor may register a cancellation notice for an initial or amendment notice in specified circumstances; the Registrar may cancel notices for listed reasons; the bureau must give notice before cancelling; a discharge notice must be filed when the grantor has met obligations; an aggrieved person may appeal to the High Court.
Section Cancellation of initial or amendment notice Section The secured creditor or grantor may register a cancellation notice where the— Notwithstanding subsection (1), the Registrar may cancel notices filed under this Act where— registration of an initial notice or the amendment notice was done in error or through fraud; registration of the initial notice or amendment notice was not authorised by the grantor ; collateral is no longer subject to the security interest ; or security interest to which the notice relates has been extinguished and the secured creditor has no further commitment to provide value to the grantor . the duration in section 23 lapses without the notice being amended; the transaction creating security interest rights between the grantor and the secured creditor contravenes the provisions of the Tier 4 Microfinance Institutions and Money Lender ’s Act or any other law; there is a mistake or error in the description of the collateral ; there is wrong description of the collateral ; the collateral is destroyed or is no longer in existence; or the registrar is ordered by court to cancel the notice. The bureau shall, before cancelling the registration of the initial notice or amendment notice, give notice to the secured creditor or grantor as the case may be. Notwithstanding subsection (1) (d), where a grantor has met its obligations to the secured entity, the grantor or secured creditor shall file a discharge notice with the registrar . A person aggrieved by a decision of the bureau to cancel an initial notice or an amendment notice may appeal to the High Court. - 25 Verify source ↗
Registration of security interests in movable property - Notice of objection
AI-assisted research summary: People who believe a registered notice is inaccurate or wrongfully registered may register a notice of objection; if the secured creditor then fails to respond in part or wholly, the person who registered the objection must apply to the registrar for cancellation of the initial notice.
Section Notice of objection Section A person who believes that a notice is inaccurate or was wrongfully registered, may register a notice of objection to the notice, as may be prescribed by regulations made under this Act. The registration of a notice of objection does not affect the perfection of a notice. Where a notice of objection is registered under subsection (1), and the secured creditor fails to respond, in part or wholly, to the notice, the person who registers the notice shall make an application for cancellation of the initial notice to the registrar . - 26 Verify source ↗
Registration of security interests in movable property - Notice of discharge
AI-assisted research summary: A secured creditor must, within five working days after the secured obligation is paid or performed in full, discharge the security interest and file a discharge notice; if the creditor does not file a discharge notice in that time, the grantor may apply to the registrar to discharge the initial or amendment notice.
Section Notice of discharge Section A secured creditor shall, within five working days after the obligation secured by the collateral has been paid or performed in full, discharge a security interest and file a discharge notice. Where the secured creditor does not, within the time prescribed in subsection (1) file a discharge notice, the grantor may apply to the registrar to discharge the initial notice or amendment notice. - 27 Verify source ↗
Registration of security interests in movable property - Search of register
AI-assisted research summary: On request, the registrar must issue a certified report of the results of a search of the register, for a fee as may be prescribed.
Section Search of register Section The register shall be made available to the public for search electronically, at a fee, as may be prescribed. Where requested, the registrar shall issue a certified report of the results of a search of the register, at a fee, as may be prescribed. A certified report issued by the registrar under subsection (2) shall be admissible as evidence in any proceedings without any further or other proof of its authenticity. - 28 Verify source ↗
Registration of security interests in movable property - Integrity and security of register
AI-assisted research summary: The registrar must remove a notice from the register when it expires; must not remove or amend information in the register except as provided by the Act; and must archive removed notices for ten years.
Section Integrity and security of register Section The registrar shall upon the expiry of a notice, remove the notice from the register. Except as provided for under this Act, the registrar shall not remove from, or amend any information in the register. The registrar shall archive the notice removed from the register under subsection (1), for ten years. - 29 Verify source ↗
Registration of security interests in movable property - Limitation on liability of the registrar
AI-assisted research summary: The registrar and officers acting under the authority of the registrar are not liable for actions or omissions done pursuant to this Act.
Section Limitation on liability of the registrar Section The registrar or an officer acting under the authority of the registrar shall not be liable for any action or omission done pursuant to this Act.
Part V
Priority of security interests and competing claims
- 30 Verify source ↗
Priority of security interests and competing claims - Priority of security interest in same collateral
AI-assisted research summary: A perfected security interest has priority over an unperfected security interest.
Section Priority of security interest in same collateral Section Priority between security interests in the same collateral shall be determined as follows— priority between perfected security interests shall be determined by the order of whichever of the following actions first occurs— a perfected security interest shall have priority over an unperfected security interest ; the registration of an initial notice; the secured creditor , or another person on the secured creditor ’s behalf, taking possession of the collateral ; or the secured creditor , or another person on the secured creditor ’s behalf acquiring control of the collateral ; and priority between unperfected security interests in the same collateral shall be determined by the order of creation of the security interests. - 31 Verify source ↗
Priority of security interests and competing claims - Competing security interests created by different grantors
AI-assisted research summary: A security interest created by a grantor is subordinate to an earlier-created security interest over the same collateral.
Section Competing security interests created by different grantors Section A security interest created by a grantor is subordinate to an earlier created security interest in the same collateral . - 32 Verify source ↗
Priority of security interests and competing claims - Change in means of perfection not to affect priority
AI-assisted research summary: The order of priority of a security interest is not affected by a change in the method of perfecting the security interest, where the security interest is not at any time unperfected.
Section Change in means of perfection not to affect priority Section The order of priority of a security interest is not affected by a change in the method of perfecting the security interest where security interest is not at any time unperfected. - 33 Verify source ↗
Priority of security interests and competing claims - Priority of security interest in future obligations and property acquired after registration
AI-assisted research summary: A perfected security interest has priority over all obligations it secures, including obligations incurred after perfection, and covers collateral listed in the register whether acquired before or after registration.
Section Priority of security interest in future obligations and property acquired after registration Section The priority of a security interest extends to all obligations secured by the security interest including the obligations that are incurred after the security interest is perfected. The priority of a security interest covers all the collateral described in the register whether the collateral was acquired by the grantor or come into existence before or after the registration of the notice. - 34 Verify source ↗
Priority of security interests and competing claims - Priority of security interest in proceeds
AI-assisted research summary: The priority of a security interest in collateral also applies to proceeds arising from dealing in that collateral.
Section Priority of security interest in proceeds Section The priority of a security interest in the collateral shall also be the priority with respect to proceeds arising from dealing in the collateral . - 35 Verify source ↗
Priority of security interests and competing claims - Priority of security interest in commingled goods
AI-assisted research summary: If a tangible asset becomes part of a product or mass, competing security interests in the product or mass keep the same priority order they had in the tangible asset immediately before it became part of the product or mass; if multiple security interests were perfected in the tangible asset before commingling, they rank in proportion to the value at the time of commingling; a security interest perfected before goods become commingled has priority over one perfected when they become commingled; where multiple security interests in commingled goods were perfected before commingling, they rank equally in proportion to the value at the time they became commingled goods.
Section Priority of security interest in commingled goods Section Where a tangible asset which becomes part of a product or mass, had two or more competing security interests, the order of priority of the competing security interests in the product or mass is the same as the order of priority that the security interests had in the tangible asset immediately before the tangible asset becomes part of the product or mass. Where two or more security interests are perfected in one tangible asset before it becomes part of a product or mass, the competing security interests rank in proportion to the value of the product or mass at the time the tangible asset becomes part of the product or mass. Where more than one security interest extends to commingled goods , a security interest perfected before the goods become commingled has priority over a security interest that is perfected at time the collateral becomes commingled goods . Where more than one security interest in commingled goods is perfected before the security interest become commingled goods , the security interest shall rank equally in proportion to the value of the collateral at the time it became commingled goods . - 36 Verify source ↗
Priority of security interests and competing claims - Priority of security interest in accessions
AI-assisted research summary: A security interest perfected before an asset becomes an accession has priority over a claim to the tangible asset to which the accession is attached.
Section Priority of security interest in accessions Section A security interest in a tangible asset that is perfected before the asset becomes an accession , has priority over a claim to the tangible asset to which the accession is attached. - 37 Verify source ↗
Priority of security interests and competing claims - Priority of security interest in fixtures
AI-assisted research summary: A security interest in a tangible asset that becomes a fixture continues in that asset after it is affixed, and a perfected security interest in such a fixture has priority over competing interests in immovable property under the Land Act, Cap. 227 and the Mortgage Act, 2009.
Section Priority of security interest in fixtures Section A security interest taken in a tangible asset that becomes a fixture , shall continue in the tangible asset after the tangible asset is affixed to the immovable property. A perfected security interest in a tangible asset that becomes a fixture under this Act has priority over a competing interest in immovable property created and perfected under the Land Act, Cap. 227 and the Mortgage Act, 2009. - 38 Verify source ↗
Priority of security interests and competing claims - Priority of security interest in crops
AI-assisted research summary: Certain perfected security interests in growing crops (and some crop-related security interests given for value) have priority over landowners, mortgagees, and some unperfected interests; a judgment creditor who seizes land for crops may take priority over unperfected crop security interests.
Section Priority of security interest in crops Section A security interest in growing crops or in crops to be grown, which is perfected and the grantor is in legal possession of the land where the crops are, has priority over the interest of the owner of the land or the mortgagee of the land. A security interest in crops or in the proceeds of the crops, given for value to enable the grantor to produce or harvest the crops, and given while the crops are growing or within a period of six months, before the crops are planted, has priority over any other security interest in the same collateral given by the same grantor . The rights of a judgment creditor who causes land where crops that have an unperfected security interest to be seized in order to enforce a court judgment take priority over an unperfected security interest in the crops. - 39 Verify source ↗
Priority of security interests and competing claims - Rights of purchasers and other transferees
AI-assisted research summary: Purchasers, transferees, lessees, and licensees of collateral subject to a perfected security interest acquire rights in that collateral, with specific exceptions and rules about unperfected security interests and sales or leases in the ordinary course of business.
Section Rights of purchasers and other transferees Section A purchaser, transferee, lessee, and licensee of collateral that is subject to a perfected security interest acquires rights in the collateral which is subject to the security interest , except where— Where collateral is subject to a security interest that is not perfected— For the purposes of this section— the purchaser, transferee, lessee, or licensee, as the case may be, acquires the rights free of the security interest and the secured creditor authorizes the sale or other transfer to be free of the security interest ; the lessee or licensee, as the case may be, acquires the rights free of a security interest and the secured creditor authorizes the lease or license to be free of the security interest ; a purchaser of the collateral , where the collateral is sold in the ordinary course of the business of the seller acquires the right free of the security interest , where at the time of the purchase, the buyer does not have knowledge that the sale violates the rights of the secured creditor under the security agreement; or the rights of a lessee or licensee of collateral where the collateral is leased or licensed in the ordinary course of the business of the lessor or licensee are not affected by the security interest , where at the time of the lease or license, the lessee or licensee does not have knowledge that the lease or license violates the rights of the secured creditor under the security agreement. a court or a liquidator of an insolvent person that takes physical custody or control of the collateral takes the collateral free of an unperfected security interest ; a purchaser or lessee who acquires goods for value and receives possession of the goods takes the goods free of an unperfected security interest ; and a lien holder who takes control of collateral or causes collateral to be seized takes the collateral free of an unperfected security interest . a purchaser of goods includes a person who acquires possession of goods by sale, hire-purchase, under a contract for services or materials or through barter; a person sales, transfers, leases or licenses goods in the ordinary course of business if it is the business of that person to sale, transfer, lease or license goods of that kind or nature. - 40 Verify source ↗
Priority of security interests and competing claims - Priority over unperfected security interest
AI-assisted research summary: A person who takes possession or control of collateral without knowledge of an unperfected security interest takes the collateral free of that unperfected security interest.
Section Priority over unperfected security interest Section Where collateral is subject to a security interest that is not perfected, a person who takes possession or control of the collateral without knowledge of the security interest , takes the collateral free of an unperfected security interest . - 41 Verify source ↗
Priority of security interests and competing claims - Acquisition security interest
AI-assisted research summary: Acquisition security interests have priority over competing non-acquisition security interests created by the grantor.
Section Acquisition security interest Section An acquisition security interest has priority over a competing non-acquisition security interest that is created by the grantor . In this Act, "an acquisition security interest " means a security interest in a tangible asset or in intellectual property or the rights of a licensee under a licence of intellectual property, created by a person who provides credit to the grantor which secures an obligation to pay any unpaid portion of the purchase price of an asset or other credit extended to enable the grantor to acquire a tangible asset or rights in an asset to the extent that the credit is used for that purpose. - 42 Verify source ↗
Priority of security interests and competing claims - Security interest in negotiable instruments
AI-assisted research summary: A purchaser of a negotiable instrument has priority over a secured creditor's security interest if the purchaser gives value, takes possession in the ordinary course of business and lacks knowledge that the sale violates the secured creditor's rights; separately, a security interest perfected by possession has priority over one perfected by registration.
Section Security interest in negotiable instruments Section A purchaser of a negotiable instrument has priority over the security interest of a secured creditor in the negotiable instrument where, in the ordinary course of the business of the purchaser— A security interest in a negotiable instrument that is perfected by possession of the negotiable instrument has priority over a security interest in the negotiable instrument that is perfected by registration of a notice in the register. the purchaser gives value; the purchaser takes possession of the negotiable instrument ; and the purchaser does not have knowledge that the sale is in violation of the rights of the secured creditor under the security agreement.
Part VI
Enforcement of security interest
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Enforcement of security interest - Debtor and grantor not to waive rights before default
AI-assisted research summary: A debtor, grantor or any other person owing a secured-payment or performance shall not unilaterally waive their rights under this Part before default.
Section Debtor and grantor not to waive rights before default Section A debtor , grantor or any other person that owes a payment or a performance with respect to a secured obligation shall not unilaterally waive any of the rights of a debtor , grantor or that other person under this Part before default . - 44 Verify source ↗
Enforcement of security interest - Rights of secured creditor upon default
AI-assisted research summary: When a grantor defaults on a secured obligation the secured creditor must serve a written (or agreed) notification specifying the nature and extent of the default, required remedy and time for remedy; if not remedied the creditor may proceed to enforce the security interest including registering an enforcement notice for registered security interests or taking other actions permitted under this Act.
Section Rights of secured creditor upon default Section Where a grantor defaults to perform a secured obligation , the secured creditor may enforce the security interest by exercising any right— The notification shall state the following matters— Where the debtor does not remedy the default within the time period indicated in the notification, the secured creditor may— Where a debtor defaults on the obligation to pay or where another event of default occurs, the security interest becomes enforceable. under this Act; provided in the security agreement; or provided under any other written law. Where a debtor defaults to perform a secured obligation , the secured creditor shall serve on the grantor a notification, in writing or in other form agreed between the parties, to pay the money owing or perform and observe the agreement as the case may be. the nature and extent of default ; if the default consists of non-payment, the actual amount and the time by the end of which payment must be completed; if the default consists of the failure to perform or observe any covenant, express or implied, in the agreement, the act the grantor must do or desist from doing, so as to rectify the default and the time by the end of which the default must have been rectified; and the consequence that if the default is not rectified within the time specified in the notification, the secured creditor will proceed to exercise any of the remedies available under any law. in case of a security interest perfected by registration, register a default and enforcement notice with the registrar ; and in the case of a security interest perfected other than by registration, take any action as empowered under this Act. - 45 Verify source ↗
Enforcement of security interest - Right of secured creditor with priority to enforce a security interest
AI-assisted research summary: A secured creditor who has priority over the enforcing creditor may take over enforcement at any time before the collateral is sold, when enforcement was begun by a different secured creditor.
Section Right of secured creditor with priority to enforce a security interest Section Where the enforcement of a security interest is commenced by a secured creditor other than the secured creditor whose right has priority over that of the enforcing creditor, the secured creditor shall be entitled to take over the enforcement at any time before the sale of the collateral . - 46 Verify source ↗
Enforcement of security interest - Actions permissible without judicial process
AI-assisted research summary: Allows secured creditors and financial institutions, upon default, to instruct payment from account debtors or apply deposit balances to secured obligations without a court order, and permits certain actions with documents of title and control agreements.
Section Actions permissible without judicial process Section Upon default by an account debtor , where the security interest is in a deposit account — Upon default , a secured creditor with a security interest in accounts receivable may instruct the account debtor to make payment to the secured creditor , and shall apply such payment to the satisfaction of the obligation secured by the security interest after deducting the collection expenses of the secured creditor . Upon default , a secured creditor with a security interest in a document of title that is perfected by possession may proceed in respect of the goods covered by the document of title . where the deposit account is maintained by a financial institution and the security interest is perfected in the deposit account the financial institution may apply the balance of the deposit account to the obligation secured by the deposit account ; and where a secured creditor has a security interest in the deposit account perfected by a control agreement, the secured creditor may instruct the financial institution to pay the balance of the deposit account to the account of the secured creditor . The secured creditor may act under this section without an order of court. In this section— "account debtor " means a person who is liable for payment on an account receivable, and includes a guarantor or other person with secondary liability for payment on the account receivable; "control agreement" means an agreement between a financial institution , a grantor and a secured creditor , in which the financial institution agrees to follow the instructions of the secured creditor without the further consent of the debtor . - 47 Verify source ↗
Enforcement of security interest - Expedited possession by secured party
AI-assisted research summary: A secured creditor may take possession of collateral without a court order in specified circumstances and is entitled to take possession after default; special rules apply to fixtures and small-value transactions.
Section Expedited possession by secured party Section For the purposes of subsection (1), a secured creditor may take possession of a collateral without a court order where— "Breach of the peace" in subsection (2) means— In cases not covered by section 46 , and subject to the rights of a person with priority in the possession of a collateral, including a lessee or licensee, the secured creditor is entitled to take possession of the collateral after default, with or without a court order. the grantor , in writing, consents to the secured creditor taking possession of the collateral without a court order; the secured creditor gives a notice of default and a notice to take possession by the secured creditor , to the grantor or the person in possession of the collateral , where the collateral is not with the grantor ; and possession or control of the collateral can be taken without a breach of the peace. entering the premises of the grantor without permission; or being physically violent or intimidating the grantor . Subsections (1), (2) and (3) shall not apply to a secured transaction with a contractual value not exceeding five hundred currency points. Where the collateral is a fixture , the secured creditor may remove the collateral from the immovable property to which it is fixed without court process where the owner and, if the immovable property is subject to a mortgage, the mortgagee, agree in writing. - 48 Verify source ↗
Enforcement of security interest - Sale by secured creditor
AI-assisted research summary: If a debtor is in default, a secured creditor may sell any or all of the collateral (subject to section 46 and commercially reasonable preparation).
Section Sale by secured creditor Section Save as provided for under section 46 , where a debtor is in default, a secured creditor may sell any or all of the collateral in its condition or following any commercially reasonable preparation or processing. The sale of the collateral shall be by auction. - 49 Verify source ↗
Enforcement of security interest - Notice of disposition of collateral
AI-assisted research summary: A secured creditor must give and file a disposal notice at least ten working days before disposing of collateral; persons may object within five days; registrar must suspend disposition on objection until withdrawn or lapsed; objections lapse after forty five days unless court proceedings and injunction are served.
Section Notice of disposition of collateral Section A notice of disposition shall— Subsection (1) shall not apply where— A secured creditor shall, at least ten working days before disposing of a collateral , give notice to grantor , any other secured creditor , owner of the collateral or any other person as it deems fit and file with the registrar , a disposal notice. indicate the grantor and the secured creditor ; describe the collateral ; indicate the amount required to satisfy the secured obligation including the interest due and the expenses incurred; and state the time and place of the public sale. A person may, within five days of receipt of a notice referred to in subsection (1), object to the disposition of the collateral . The objection shall be in the prescribed form and shall state the grounds of objection. The registrar shall upon receipt of the objection, notify the secured creditor and suspend the disposition of the collateral until the objection is withdrawn or lapsed. The objection lodged in subsection (3) shall lapse after forty five days from the date of objection unless the person who objected it has within that time, commenced proceedings in a court of competent jurisdiction and has obtained and served on the registrar an injunction or court order restraining the registrar from removing the objection from the register. Any dealing in collateral shall not have effect if the same is carried out before the objection lapses or is withdrawn. the collateral is perishable: or the secured creditor reasonably believes that the collateral shall decline substantially in value if it is not disposed of immediately. The grantor may waive the right to be notified after default . The Minister shall by statutory instrument prescribe the procedures for disposing of perishable collateral . - 50 Verify source ↗
Enforcement of security interest - Notice and claim for distribution
AI-assisted research summary: A secured creditor must give at least ten working days' notice of a proposed distribution to the persons in section 49(1) specifying the earliest distribution date, when claims may be presented, the address for claims, and required proof; the persons in section 49(1) must within five working days of receipt provide the secured creditor with an authenticated claim or a notice of claim of interest in the collateral.
Section Notice and claim for distribution Section The notice shall include— The persons listed in section 49 (1) shall within five working days from the receipt of the notice provide the secured creditor with— A secured creditor shall at least ten working days before the distribution of the proceeds of sale or disposal, give notice of the proposed distribution to the persons specified in section 49 (1). the earliest date on which the distribution may occur; the date on which persons who are given notice of the proposed distribution as required under subsection (1), may present claims on the proceeds of sale which are to be distributed; the address to which the claims made under paragraph (b) are to be presented; and the type of proof of the claim to be provided. an authenticated claim of the interest: or a notice of claim of interest in the collateral from a lien holder. - 51 Verify source ↗
Enforcement of security interest - Application of proceeds
AI-assisted research summary: A secured creditor who disposes of collateral must apply the proceeds in a specific order to cover expenses and secured claims; after deductions, the creditor or lien holder may pay any surplus to court, and the secured creditor must account to the grantor or owner for any surplus.
Section Application of proceeds Section A secured creditor who disposes of collateral shall apply the proceeds of the disposition in the following order— to payment of the reasonable expenses of retaking, holding, preparing for sale, selling, and to the extent provided for in the agreement, the reasonable legal and professional fees incurred by the secured creditor ; payment for the satisfaction of obligations secured by a security interest that has priority claim in the collateral or lien ; payment for the satisfaction of the obligation secured by the security interest of the enforcing secured creditor ; and payment for the satisfaction of the obligations secured by any subordinate security interest or lien in the collateral where written demand and proof of the interest are received before the distribution of the proceeds is completed. A secured creditor or lien holder who enforces the distribution of the proceeds of a disposition may after deduction of the payments specified in subsection (1), pay the surplus of the proceeds to a court for distribution to the other claimants. The secured creditor shall account to the grantor or owner of the collateral for the surplus of the proceeds , if any. - 52 Verify source ↗
Enforcement of security interest - Statement of account
AI-assisted research summary: A secured creditor must provide a written statement of account within ten working days after disposing of collateral, and the statement must show gross proceeds, enforcement and disposition costs and expenses, and the balance owing between creditor and debtor.
Section Statement of account Section The statement of account shall indicate— A secured creditor shall, within ten working days after the disposal of the collateral , provide a written statement of account, to the grantor , owner, any other secured creditor or person with interest in the collateral . the amount of the gross proceeds of the disposal; the amount of the costs and expenses of enforcement and disposition; and the balance owing by the secured creditor to the debtor , or by the debtor to the secured creditor as the case may be. - 53 Verify source ↗
Enforcement of security interest - Effect of sale
AI-assisted research summary: When collateral is sold to a purchaser for value, the sale is effective even if the secured creditor failed to comply, provided the purchaser transfers the debtor's rights in the collateral, discharges the security interest and any subordinate security interest or lien, has no knowledge of defects, does not buy in collusion, and acts in good faith.
Section Effect of sale Section When collateral is sold to a purchaser for value, the sale— Subsection (1) applies even where the secured creditor fails to comply with the requirements of this Part where a purchaser— transfers to the purchaser all the rights of the debtor in the collateral ; discharges the security interest ; and discharges any security interest or lien subordinate to the security interest . has no knowledge of any defects in the sale; does not buy in collusion with the secured creditor , other bidders or the person conducting the sale; and the purchaser acts in good faith. - 54 Verify source ↗
Enforcement of security interest - Redeeming collateral
AI-assisted research summary: The grantor, a person with a right in the collateral, or the debtor may terminate enforcement and redeem the collateral by performing the secured obligations or paying expenses; a grantor has priority to redeem.
Section Redeeming collateral Section The grantor , a person with a right in the collateral , or the debtor , is entitled to terminate the enforcement process and redeem the collateral by— tendering performance of the obligations secured by the collateral ; or paying the expenses that were incurred to seize, hold, repair and prepare the collateral for disposition. A collateral may be redeemed where the secured creditor has not yet sold or disposed it of. A grantor has the priority to redeem the collateral , over any other person . - 55 Verify source ↗
Enforcement of security interest - Rights acquired in collateral
AI-assisted research summary: A buyer or transferee who acquires collateral sold or disposed of under this Part takes the grantor's rights free of the enforcing secured creditor and competing claimants; a lessee or licensee of collateral is entitled to the benefit of the lease or license during its term.
Section Rights acquired in collateral Section Where a secured creditor sells or otherwise disposes of the collateral in accordance with the provisions of this Part, the buyer or transferee of the collateral acquires the rights of the grantor in the collateral free of the rights of the enforcing secured creditor and any competing claimant . Where a secured creditor leases or licenses the collateral , the lessee or licensee is entitled to the benefit of the lease or license during its term. - 56 Verify source ↗
Enforcement of security interest - Noncompliance with Part by secured creditor
AI-assisted research summary: If a secured creditor fails to follow this Part, the grantor, a person with a right in the collateral, or the debtor may apply to court to obtain relief and recover damages from the secured creditor.
Section Noncompliance with Part by secured creditor Section Where a secured creditor does not comply with the requirements of this Part, the grantor , a person with a right in the collateral or the debtor , may apply to court for relief and recovery from the secured creditor of damages, for any loss caused by the failure to comply with this Part.
Part VII
General
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General - Administrative penalties
AI-assisted research summary: The Registrar General may impose administrative penalties on persons who do not comply with the Act.
Section Administrative penalties Section The Registrar General may, impose an administrative penalty on a person that does not comply with this Act as may be prescribed by regulations. Where a person fails to pay an administrative penalty imposed under subsection (1), the Registrar General may, by way of civil action in a competent court, recover the amount of the administrative penalty from such person as an amount due and owing to the bureau . - 58 Verify source ↗
General - Offences
AI-assisted research summary: Persons who file notices fraudulently, make false statements to deceive officials, or fail to inform the Registrar General after making false statements commit offences punishable by up to two years' imprisonment or a fine not exceeding two hundred currency points, or both.
Section Offences Section A person who files a notice with fraudulent, frivolous or malicious intent commits an offence and is liable on conviction to imprisonment not exceeding two years or a fine not exceeding two hundred currency points or both. A person who for the purpose of deceiving the Registrar General or an officer of the bureau in the execution of this Act, makes or submits a false statement or representation, whether orally or in writing, knowing the same to be false, commits an offence and is liable on conviction to imprisonment not exceeding two years or a fine not exceeding two hundred currency points or both. A person who, makes a false statement or a misrepresentation, whether orally or in writing, for the purpose of procuring or influencing the doing or omitting the doing of anything in relation to this Act and who, on becoming aware of the false statement or misrepresentation, fails to inform the Registrar General commits an offence and is liable on conviction to imprisonment not exceeding two years or a fine not exceeding two hundred currency points or both. - 59 Verify source ↗
General - Regulations
AI-assisted research summary: The Minister may, by statutory instrument, make regulations to give effect to the Act and may make regulations providing for registration procedures, notice formats, search requirements, fees, administrative penalties, and anything required to be prescribed under the Act.
Section Regulations Section Without limiting the generality of subsection (1), regulations made under this section may— The Minister may, by statutory instrument, make regulations for, or with respect to any matter under this Act that is necessary for giving effect to the provisions of this Act. provide for the procedure for registration of notices, liens and any other matters related to the register; provide for the format of notices; provide for the procedure and requirements for conducting a search of the register; prescribe the fees to be paid under this Act; prescribe the administrative penalties payable under this Act; and prescribe anything required to be prescribed under this Act. - 60 Verify source ↗
General - Repeal and savings
AI-assisted research summary: Prior security interests that were perfected under earlier law remain perfected under this Act until the time they would have ceased under prior law or until 150 calendar days after the Act's effective date; if a secured creditor satisfies this Act's perfection requirements before that time, the perfection is deemed continuous; otherwise it becomes unperfected after that period.
Section Repeal and savings Section A prior security interest shall remain perfected or effective against a third party and shall be deemed to be perfected under this Act until— The Chattels Securities Act, Act No. 7 of 2014 is repealed. A prior security interest that was perfected or made effective against third parties under any other law shall, after the commencement of this Act, remain perfected under this Act, in accordance with subsection (3). the time it would have ceased to be perfected or effective against third parties under any other law; or the expiration of a period of one hundred and fifty calendar days after the effective date of this Act. If a secured creditor satisfies the requirements of this Act for perfection of security interests before the perfection or its effect against third parties would have ceased in accordance with subsection (3), the perfection shall be deemed to be continuous. A prior security interest that is not perfected under this Act within the period specified in subsection (3), shall be deemed to be an unperfected security interest thereafter.
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Security Interest in Movable Property Act, 2019
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