UCC Filing System Leaves No Room for Error
When searching the financing statement records in a particular filing office, the search results received may not tell the entire story. The effectiveness of a filed financing statement depends on whether or not the filer was authorized to make the filing in the first place. Also, it does not matter that a filer made a mistake in a filing or did not intend to file a particular statement.
For example, if an authorized secured party intended to file an amendment to a financing statement but instead checked the wrong box on the form and filed a termination statement by mistake, the termination is still effective. If the party had the authority to file a termination, the record is terminated, despite the fact that the filing was made in error. There is no ability to “reinstate” the filing through filing a correction statement or a continuation statement. The only option available for a secured party is to file a new UCC financing statement that will become effective from the date of filing and not relate back to the date of the original filing. Lenders must take care when filing financing statement amendments in order to avoid unintentional consequences. Unfortunately, the UCC filing system does not have an “undo” feature.