CLFP EXAM - EQUIPMENT
LEASE AND FINANCING
DOCUMENTATION QUESTIONS
AND ANSWERS 2026 - 2027
What are the elements of a Real Estate Waiver? - ANSWERS-1.)
identification of parties;
2.) Legal description of the Property
3.) Agreement on Subject and Nature of Fixtures
4.) Waiver of Rights by Landlord/Mortgagor
5.) Permission to claim Property
6.) Acknowledgement
With respect to documentation, what is a UCC 1? - ANSWERS-Basic
financing statement
With respect to documenation, what is a UCC 3? - ANSWERS-An
amendment or termination. Filed when there is a change in equipment
or at the termination of a lease
What are the UCC location requirements? - ANSWERS-Need to be
filed at lessee's location. Formerly filed at the equipment location.
,What are the UCC timeliness requirements? - ANSWERS-1.) In order
to obtain "purchase money security interest" status and "jump ahead
of pre-existing blanket lien" filings, filing must take place with 20
days of delivery.
2.) in most cases financing statements are for five years. If longer is
required, it can be extended via a continuation (UCC 3).
What is a Precautionary Filing? - ANSWERS-A UCC filing on a true
lease is not necessary required but still a good idea. It the transaction
is subsequently classified as a secured transaction, the position will
still be perfected. In addition, a precautionary filing provides notice to
other third parties.
What are some Requirements for Perfecting Interest in Additional
Collateral? - ANSWERS-1.) UCC filing
2.) Greater awareness of other prior liens. Terminating them may be
necessary.
3.) Because lease proceeds are not being used to purchase the
equipment, no Purchase Money Security Interest" is available allow
you to jump ahead of other liens. Must obtain consent from existing
UCC holders
Where do you file to take Real Estate as Additional Collateral? -
ANSWERS-Documents need to be filed in the office of the county
recorder where the real property is located.
What is Anti Deficiency Laws: - ANSWERS-The laws prescribe
practices with respect to situations in which the lessor or secured
, party has an interest in both real and personal property. By pursuing a
remedy to foreclose on real property, a lessor may lose claim to
pursue a deficiency underthe equipment lease (or vice versa)
What is a "lease commencement" pre-funding agreement? -
ANSWERS-Lease Commencement which simply states that the
lessee is to commence immediately and the lessee acknowledges it
must pay no matter what happens with the equipment delivery.
What is an "interim funding" pre-funding agreement? - ANSWERS-
Provides for some sort of loan in the amount of the advanced
required, to culminate in equipment lease once the equipment is
delivered and accepted. If lease does not commence in certain time
period, all proceeds must be repaid
What are the concerns with pre-funding? - ANSWERS-1) giving up
leverage with vendor
2.) at risk successful D&A may never happen or delay
3.) vendor inventory financing
What is a Nominal Option? - ANSWERS-Allows lessee to purchase
equipment at the end of the lease for $1.00 or some other minimal
payment such that they are likely to exercise the option
What is a Fair Market Value Option? - ANSWERS-Gives the lessor
the ability to require the lessee to purchase the equipment at an agreed
upon price following the conclusion of the lease - at which point the
LEASE AND FINANCING
DOCUMENTATION QUESTIONS
AND ANSWERS 2026 - 2027
What are the elements of a Real Estate Waiver? - ANSWERS-1.)
identification of parties;
2.) Legal description of the Property
3.) Agreement on Subject and Nature of Fixtures
4.) Waiver of Rights by Landlord/Mortgagor
5.) Permission to claim Property
6.) Acknowledgement
With respect to documentation, what is a UCC 1? - ANSWERS-Basic
financing statement
With respect to documenation, what is a UCC 3? - ANSWERS-An
amendment or termination. Filed when there is a change in equipment
or at the termination of a lease
What are the UCC location requirements? - ANSWERS-Need to be
filed at lessee's location. Formerly filed at the equipment location.
,What are the UCC timeliness requirements? - ANSWERS-1.) In order
to obtain "purchase money security interest" status and "jump ahead
of pre-existing blanket lien" filings, filing must take place with 20
days of delivery.
2.) in most cases financing statements are for five years. If longer is
required, it can be extended via a continuation (UCC 3).
What is a Precautionary Filing? - ANSWERS-A UCC filing on a true
lease is not necessary required but still a good idea. It the transaction
is subsequently classified as a secured transaction, the position will
still be perfected. In addition, a precautionary filing provides notice to
other third parties.
What are some Requirements for Perfecting Interest in Additional
Collateral? - ANSWERS-1.) UCC filing
2.) Greater awareness of other prior liens. Terminating them may be
necessary.
3.) Because lease proceeds are not being used to purchase the
equipment, no Purchase Money Security Interest" is available allow
you to jump ahead of other liens. Must obtain consent from existing
UCC holders
Where do you file to take Real Estate as Additional Collateral? -
ANSWERS-Documents need to be filed in the office of the county
recorder where the real property is located.
What is Anti Deficiency Laws: - ANSWERS-The laws prescribe
practices with respect to situations in which the lessor or secured
, party has an interest in both real and personal property. By pursuing a
remedy to foreclose on real property, a lessor may lose claim to
pursue a deficiency underthe equipment lease (or vice versa)
What is a "lease commencement" pre-funding agreement? -
ANSWERS-Lease Commencement which simply states that the
lessee is to commence immediately and the lessee acknowledges it
must pay no matter what happens with the equipment delivery.
What is an "interim funding" pre-funding agreement? - ANSWERS-
Provides for some sort of loan in the amount of the advanced
required, to culminate in equipment lease once the equipment is
delivered and accepted. If lease does not commence in certain time
period, all proceeds must be repaid
What are the concerns with pre-funding? - ANSWERS-1) giving up
leverage with vendor
2.) at risk successful D&A may never happen or delay
3.) vendor inventory financing
What is a Nominal Option? - ANSWERS-Allows lessee to purchase
equipment at the end of the lease for $1.00 or some other minimal
payment such that they are likely to exercise the option
What is a Fair Market Value Option? - ANSWERS-Gives the lessor
the ability to require the lessee to purchase the equipment at an agreed
upon price following the conclusion of the lease - at which point the
