While most security interests are created by an agreement between the parties, it is also possible that the application of the law may create an interest in security. [4] For example, in many legal systems, a mechanic who repairs a car has a right to pledge over the car for the cost of repairs. This right to pledge is granted in the event of no agreement between the parties. A security interest is generally granted by a «security agreement.» Security interest is established with respect to real estate where the debtor has a stake in the property and the holder of the security lent to the debtor receives a value such as the granting of a loan, for example.B. There are a number of other agreements that create a guarantee in the commercial sense but do not create an interest in the security of the property in the assets. For example, it is possible to grant the guaranteed party a power or conditional option regarding the purpose, to use a property reserve agreement, or to execute un expired transmission instruments. These techniques, while ensuring the protection of the insured party, do not confer a specific shareholding on the assets on which the agreements relate and their effectiveness may be limited if the debtor goes bankrupt. The licensee can «perfect» the security interest to notify third parties. Perfection is usually achieved by filing a funding return with the government, often the Secretary of State, who is in a jurisdiction where a corporate debtor is registered. Perfection can also be achieved by holding security if security is a property of real value. According to English law and in most general jurisdictions arising from English law (the United States is the exception, as explained below), there are nine main types of proprietary security interests: the following debate on the types of security interests concerns mainly English law. English security law has been respected in most common law countries, and most common law countries have similar property laws[12] that govern the rules of common law. The first major attempt to introduce the benefits of Article 9 of the UCC in civil courts was launched in 1992 by the European Bank for Reconstruction and Development, which led to the 1994 EBRD`s Standard Safe Transactions Act.
However, the approach of the EBRD`s model legislation on the whole subject was fundamentally different from UCC Section 9, and it was also quite limited. For example, he had no provisions for the security interest of the purchase money. In the 1990s and 2000s, almost all Central and Eastern European countries implemented reform of their safe transaction legislation, although most of them had developed ad hoc solutions for indigenous businesses or, to some extent, complied with the EBRD`s model law.