How can I remove a UCC lien on a solar array when the original lender no longer exists? – North Carolina

Short Answer

In North Carolina, start by confirming where the UCC-1 was filed (Secretary of State vs. county Register of Deeds for a fixture) and who the secured party of record is. Send a written demand for a termination to the secured party of record and any known successor. If the lender is defunct or unresponsive, file an information statement disputing the record and, if needed, seek a court order (declaratory judgment) directing the Secretary of State or Register of Deeds to terminate the filing. Estate claim deadlines may bar collection against the estate but do not automatically erase a valid lien on collateral.

Understanding the Problem

North Carolina; a property heir; seeks to clear a UCC-1 financing statement recorded against a small solar array; the trigger is that the named secured party no longer exists while a collection agency is pressing a claim after the estate has closed. The narrow question is: can the heir remove the UCC lien and how?

Apply the Law

Under North Carolina’s version of the Uniform Commercial Code (UCC Article 9), a financing statement perfects a security interest but does not itself create one; attachment requires an enforceable security agreement and value given. When a secured obligation ends, the secured party of record must authorize a termination. If the secured party is defunct or unresponsive, the record can be challenged with an information statement, and a court can declare the record ineffective and order termination. For estate issues, North Carolina law bars untimely creditor claims against the estate, but a perfected lien may still encumber collateral until released or terminated. Forum: administrative filings with the North Carolina Secretary of State (central UCC) or the county Register of Deeds (fixture filings); contested matters go to Superior Court.

Key Requirements

• Identify the filing and office: Determine if the UCC-1 is a central filing with the Secretary of State or a fixture filing in the county Register of Deeds.
• Confirm secured party of record and chain: Verify any assignment to a successor; a collector must show it is the secured party of record to act.
• Show no attachment or obligation: Gather proof the array was never delivered/connected, no value was given, or the obligation ended; this supports termination.
• Demand termination in writing: Send an authenticated demand to the secured party of record and any successor; keep delivery proof.
• Use statutory remedies if no response: File an information statement disputing the record and, if needed, seek a declaratory judgment ordering termination.
• Account for estate claim rules: Confirm whether estate claim deadlines bar any personal claim, while recognizing a perfected lien can survive on collateral.

What the Statutes Say

• North Carolina Gen. Stat. § 25-9-513 (Termination statement) – Secured party must authorize termination when the security interest is no longer effective.
• North Carolina Gen. Stat. § 25-9-518 (Information statement) – Debtor may file a statement disputing an inaccurate or wrongfully filed record.
• North Carolina Gen. Stat. § 1-254 (Declaratory judgments) – Court may declare parties’ rights and direct appropriate relief, such as ordering record termination.
• North Carolina Gen. Stat. § 28A-19-3 (Time for presentation of claims) – Sets claim deadlines in estate administration; late claims can be barred.

Analysis

Apply the Rule to the Facts: The array was never connected or paid for, which suggests no attachment and no enforceable security interest. The named lender is defunct; unless the collection agency recorded an assignment to become secured party of record, it lacks authority to enforce or terminate. Because the estate is closed, any unsecured claim may be time-barred, but the filing can still cloud the asset until terminated. These facts support demanding termination and, if refused, seeking a court order to remove the filing.

Process & Timing

1. Who files: The current property owner or a personal representative (if the estate is reopened for this limited purpose). Where: North Carolina Secretary of State (central UCC) and/or the county Register of Deeds for a fixture filing. What: UCC search; authenticated written demand for termination to the secured party of record; UCC-5 information statement disputing the record; UCC-3 termination if authorized. When: Send the demand promptly; confirm whether estate claim deadlines have already expired.
2. If no termination is provided: File an information statement with the Secretary of State (or county for a fixture) to document the dispute; request written proof of assignment and the underlying security agreement from any collector; allow a reasonable response period set in the demand.
3. Court relief: File a civil action in Superior Court for a declaratory judgment that no security interest exists and for an order directing the Secretary of State/Register of Deeds to terminate the record; upon entry, submit the order to the filing office for removal.

Exceptions & Pitfalls

• A fixture filing recorded in the Register of Deeds follows real-property procedures; confirm whether the array ever became a fixture.
• An information statement does not remove a filing; it alerts the public while you pursue termination or a court order.
• A collection agency must prove it is the secured party of record (or its authorized agent) via a recorded assignment before it can enforce or terminate.
• Even if estate claims are barred, a perfected lien can still encumber collateral; focus on attachment and termination, not just claim deadlines.
• Serve all secured parties of record at their last known addresses; keep certified mail receipts to show good-faith demand.

Talk to a Real Estate Attorney

If you’re dealing with an old UCC filing on a solar array and a defunct lender in North Carolina, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 919-341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.