Notice to Prior Secured Party of Purchase Money Security Interest. As a landlord, or creditor leasing out a house, building, vehicle etc. you know there is always the chance that your lessee could damage your property, or even skip out early on the lease.
Therefore you make it common practice to request a security deposit prior to releasing the property.
So what happens when you purchase property that is currently being leased out?
Well if you plan to keep the agreement with the present lessee who has already paid their deposit, you will need to establish a new contract and have the security interest transferred over to you.
You don’t want to procrastinate on getting started with this step.
Make sure you are protected by sending this letter out ASAP!
NOTICE TO PRIOR SECURED PARTY
OF PURCHASE MONEY SECURITY INTEREST
To: ______[Prior Secured Parties]_____
This is to notify you that the undersigned has or expects to acquire a purchase money security interest in and to the following described collateral:
Said collateral shall be sold to:
Insofar as you have an existing security interest on record as against the same type collateral, this notice shall inform you of our priority claim to the property being sold.