Assembly committee advances bill allowing mortgages to serve as fixture filings

The California State Assembly Banking and Finance Committee on a voice vote approved AB 771, a technical change to the state's Uniform Commercial Code that would let a mortgage or deed of trust serve as a fixture filing even when the debtor's name does not exactly match their California identification.

AB 771 is authored by Assemblymember Macedo. Committee Chair Valencia opened the hearing and members voted to advance the measure after testimony from industry and housing-sector witnesses.

The bill addresses a perceived mismatch between how California implements the UCC and the version adopted in most other states. Assemblymember Macedo told the committee the current rule requires an exact match to a California ID for a mortgage or deed of trust to qualify as a fixture filing; if the name differs — for example because of a missing middle initial — lenders must file a separate financing statement. Macedo said AB 771 “fixes California's uniform commercial code, bringing us in line with the vast majority of other states and reducing unnecessary red tape for borrowers and lenders.”

Saul Perkovich of the California Lawyers Association testified in support and provided practical examples. “A fixture filing perfects a security interest in fixtures,” Perkovich said. “They're not the real property, but their personal property affixed to the real property. This comes up like heavy machinery bolted to the floor, HVAC systems and commercial properties, etcetera.” He noted that 44 states allow the mortgage or deed of trust itself to serve as the fixture filing and described administrative burdens that arise under California law, including duplicative filings and the need to renew fixture filings every five years versus mortgages that can be effective for decades. Perkovich added that typographical differences between identity documents and mortgage instruments can render fixture filings ineffective unless corrected.

Raymond Contreras of Lighthouse Public Affairs testified in support on behalf of Habitat for Humanity California. No formal opposition was recorded at the hearing.

A motion to pass the bill was made and seconded; the roll call recorded affirmative votes from Chair Valencia and committee members Chen, Dixon, Fong, Krell, Michelle Rodriguez, Blanca Rubio and Soria. Committee staff indicated the bill had “enough votes” to pass and the committee left the roll open for absent members.

If enacted, AB 771 would remove the requirement that the debtor name on a mortgage or deed of trust exactly match the debtor's California identification in order for that instrument to perfect a security interest in fixtures. Committee testimony emphasized this is a narrow, technical alignment with the UCC treatment used in most other states, intended to reduce duplicative filings and administrative costs.

The committee advanced the bill; formal next steps (committee of origin concurrence, floor scheduling) were not specified during the hearing.