What Is a UCC Lien?

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The UCC or Uniform Common Code is a universal code for trade used in all 50 US States as well as the District of Columbia, Puerto Rico, Guam, and the US Virgin Islands. The UUC code describes preferred methods of lending, leasing,sales, and banking. One provision of the UCC Code is the utilization of a UCC Lien.


UCC Liens first began with the enactment of the UCC in 1952. The section of the code that deals with liens was also revised in 1991.

Read More: How to File a UCC Lien


A UCC Lien is placed on some type of good or product by a party other than the item's owner. Typically, the lienholder is a party who has a vested interest in the item such as a lender who is using the item as collateral or a former owner who is awaiting final payment on the item.


The primary function of a UCC Lien is for protection during a business transaction. It is meant to reduce the possibility of loss while doing business.


If an item has a UCC Lien placed upon it, the item cannot be sold to another party. If the item requires insurance, the lien also requires that this insurance be maintaned.


If a bank granted a loan to a manufacturing company, using the building and equipment as collateral, the bank would place a mortgage upon the building and a UCC lien against the equipment. If one farmer was selling a piece of farming equipment to another and the farming equipment was needed for the buyer to obtain the rest of the money for the purchase, the seller could request partial payment and provide the buyer with the tractor by placing a UCC Lien on the tractor for the remaining portion of the payment.


UCC lien information is a matter of public record and can be obtained from Secretary of State offices in a given state.