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  1. #1
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    Default liens

    A bit of info on how ag dealers avoid buying/trading for, used tractors with outstanding liens.

    Would also be applicable to the private individual purchasing a used tractor from a non-dealer.



    http://www.naeda.com/files/ucc-summary.pdf



    What is important to note is that the lien would be filed under the name of the current "owner." and it is necessary to get the name correct; i.e. a lien filed under the name "John Allen Doe" may not show up in a UCC-1 search under "John Doe." Likewise, a search under "John Smith Farms" may not show liens filed under the name "John Allen Smith Farms."

    If there is a lien that the buyer does not discover, the buyer loses unless he can prove in court that the lien was filed under the
    wrong name, and not that the buyer searched under the wrong name.


    http://www.ccsb.com/Newsletters/2013...ll%20Stuff.pdf


    It is my understanding that the biggest problems do not arise with financing the purchase price of a specific piece of equipment, but rather with "blanket liens" arising from financing agricultural/construction activites, where the borrower signs financing papers providing for liens on all his existing equipment and possibly all future equipment. So, just because he said he paid cash for a tractor, that does not mean there is no lien against that tractor.

    Something to think about before buying an expensive tractor.

    Or, you can do as I did, and buy a cheap, abused tractor which I could afford to lose if a lien-holder knocked on my door some day.
    Last edited by Capricious; 08-11-2014 at 12:34 PM.

  2. #2
    Veteran Member Poopdeck Pappy's Avatar
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    Default Re: liens

    That's why doing UCC searches on tractors is almost a joke. You would have to search for every conceivable variation of a name, such as:

    John Allen Doe
    John A. Doe
    John Doe
    Allen Doe
    J. Allen Doe
    J.A. Doe
    J. Doe
    A. Doe

    And everyone of those searches is a separate search that costs money.

    And then you still wouldn't know if the tractor was actuall bought in a corporate or LLC or partnership name.

    If someone wants to screw you and/or their bank, chances are pretty good they can do it.

    They should set up the UCC filing system to allow searching for serial numbers. That would simplify things a lot.
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  3. #3
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    Ford 5030

    Default Re: liens

    I bought a tractor from a fellow got a bill of sale stating it was free and clear. Two years later I got a call from a repo company to arrange a time to pick up the tractor. Talk about a shocker!!

  4. #4
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    Default Re: liens

    "....That's why doing UCC searches on tractors is almost a joke. You would have to search for every conceivable variation of a name, such as:

    John Allen Doe
    John A. Doe
    John Doe
    Allen Doe
    J. Allen Doe
    J.A. Doe
    J. Doe
    A. Doe

    And everyone of those searches is a separate search that costs money.

    And then you still wouldn't know if the tractor was actuall bought in a corporate or LLC or partnership name.

    If someone wants to screw you and/or their bank, chances are pretty good they can do it.,,,"







    In Missouri I can do UCC-1 searches online all day for free- I can not speak to the situation in other states.

    No bank or other lending institution is going to lend to a closely-held LLC or corporation without getting a personal guarantee from the stockholder(s), and if the bank does not file UCC-1's in the name of the stockholder(s) then a good faith buyer has a pretty good shot at defeating the lien, in my (non lawyer) opinion, but it would involve going to court and the associated costs of that.

    If you search under any name that you discover associated with the seller, and document those searches, you will be in a much better position than if you did not, and an undiscovered lien surfaces.

    Probably the safest route is to buy from a (large, reputable) dealer; in other words, a dealer who would (and could) make things "right" if there is a problem. But then you pay the dealer's profit.







    "....They should set up the UCC filing system to allow searching for serial numbers. That would simplify things a lot..."


    I agree. But there are those who would argue that such a system would be an intrusion on their personal rights/liberties, and a needless source of government red tape/ fees.

    Considering that the State of Missouri used to title and register electric trolling motors (it no longer does), titling and registering a $20,000.00 tractor does not seem unreasonable to me.

  5. #5
    Veteran Member RollingsFarms's Avatar
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    Default

    I've wondered why tractor dealers won't trade for equipment with liens on it and just pay off the loan like car dealers do. I guess tractors don't sell as fast as cars?


    John Deere 5325 MFWD

    John Deere 910A 54" 7-Iron PRO deck

  6. #6
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    Default Re: liens

    Quote Originally Posted by wanacab View Post
    I bought a tractor from a fellow got a bill of sale stating it was free and clear. Two years later I got a call from a repo company to arrange a time to pick up the tractor. Talk about a shocker!!



    So, what happened then ?





    EDITED TO ADD:


    More people who got "the call":

    FARM CREDIT SERVICES OF AMERICA INC v. WILSON - FindLaw

    and a related note:

    FBI
    Last edited by Capricious; 08-11-2014 at 10:00 PM.

  7. #7
    Elite Member Piston's Avatar
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    Default

    Quote Originally Posted by wanacab View Post
    I bought a tractor from a fellow got a bill of sale stating it was free and clear. Two years later I got a call from a repo company to arrange a time to pick up the tractor. Talk about a shocker!!
    How did they know you owned the tractor now?

    This is why when I bought my tractor from the previous owner, I didn't fill out any paperwork of any sort, I just had him sign a bill of sale that I kept, not leaving him a copy. In fact, he never even knew my last name.
    Kubota L4610 and John Deere 410 - WR Long 64" Grapple (best attachment ever!) QA front forks, rear forks, Brown 472 HD Rotary Mower, Land Pride RBT4096 hydro blade, Woods 7200 Power Rake, homemade 3 pt log splitter, Land Pride rake/blade combo, Land Pride HRL 3578 box blade (Hydro scarifiers), Shaver SC50 3 pt. Stumpgrinder, FitRiteHydraulics TnT, 6" Vermeer PTO Chipper (Hydro feed), Disc Plow, Ratchet Rake, LP HD25 Hydraulic PHD, Woodmizer LT15 portable sawmill
    Rear Remotes Install

  8. #8
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    Default Re: liens

    "...How did they know you owned the tractor now?..."



    If you ever take "your" tractor in to a dealer for service, most likely the serial number will be entered into their computer system, and if the lien holder has asked the manufacturer to "flag' that serial number , "your' tractor is not yours any more.





    EDITED TO ADD: This involves a stolen tractor, rather than a lien, but this is what can happen if the serial number is "flagged:"


    1973 tractor, stolen in 1978, turns-up in 1987

    1973 John Deere 4030 Tractor, In re - 1991 OK 79 :: 1991 :: Oklahoma Supreme Court Decisions :: Oklahoma Case Law :: US Case Law :: US Law :: Justia

  9. #9
    Elite Member Piston's Avatar
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    Default

    Quote Originally Posted by Capricious View Post
    "...How did they know you owned the tractor now?..." If you ever take "your" tractor in to a dealer for service, most likely the serial number will be entered into their computer system, and if the lien holder has asked the manufacturer to "flag' that serial number , "your' tractor is not yours any more. EDITED TO ADD: This involves a stolen tractor, rather than a lien, but this is what can happen if the serial number is "flagged:" 1973 tractor, stolen in 1978, turns-up in 1987 1973 John Deere 4030 Tractor, In re - 1991 OK 79 :: 1991 :: Oklahoma Supreme Court Decisions :: Oklahoma Case Law :: US Case Law :: US Law :: Justia
    Oh okay that makes sense. I've never taken mine in for service but that doesn't mean I never will.

    Thanks for the explanation.
    Kubota L4610 and John Deere 410 - WR Long 64" Grapple (best attachment ever!) QA front forks, rear forks, Brown 472 HD Rotary Mower, Land Pride RBT4096 hydro blade, Woods 7200 Power Rake, homemade 3 pt log splitter, Land Pride rake/blade combo, Land Pride HRL 3578 box blade (Hydro scarifiers), Shaver SC50 3 pt. Stumpgrinder, FitRiteHydraulics TnT, 6" Vermeer PTO Chipper (Hydro feed), Disc Plow, Ratchet Rake, LP HD25 Hydraulic PHD, Woodmizer LT15 portable sawmill
    Rear Remotes Install

  10. #10
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    Default Re: liens

    Also; don't know about tractors, but on occasions that I have needed parts for other types of machinery, the parts man has asked for a serial number as well, so just buying a replacement part could be an issue.

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