In KSA, how does one register a security interest when leasing construction equipment/heavy machinery?
1 reply
Apr 3, 2020
Equipment lessors can utilize UCC liens to secure their right to get paid. Admittedly, though, I'm not particularly versed in that subject - but this article may be useful for that: The UCC and Commercial Lease Contracts | Nolo.
Notably, if the equipment will be used in the construction of a private project, then that lease could give rise to mechanics lien rights if payments aren't made on the lease. But, that'd be a reactionary lien after payment disputes began - not a security interest that's instituted from the get-go. Plus, that lien would be against the project property. More on Kansas mechanics lien rights here: Kansas Mechanics Lien Guide and FAQs.
Finally, it's absolutely possible to enter into a voluntary security agreement with a customer - like a promissory note or a personal guarantee. And, if it's agreeable your customer, then you can create whatever security interest you two can agree on.
Finally, for more clarity on how, exactly, to create the security agreement you're looking for - consulting with one of these Kansas construction attorneys should be helpful.