57A-9-207. Rights and duties of secured party having possession or control of collateral.
(a) Except as otherwise provided in subsection (d), a secured party shall use reasonable care in the custody and preservation of collateral in the secured party's possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.
(b) Except as otherwise provided in subsection (d), if a secured party has possession of collateral:
(1)Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;
(2)The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;
(3)The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and
(4)The secured party may use or operate the collateral:
(A)For the purpose of preserving the collateral or its value;
(B)As permitted by an order of a court having competent jurisdiction; or
(C)Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.
(c) Except as otherwise provided in subsection (d), a secured party having possession of collateral or control of collateral under §57A-9-104, 57A-9-105, 57A-9-106, 57A-9-107, or 57A-7-106:
(1)May hold as additional security any proceeds, except money or funds, received from the collateral;
(2)Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and
(3)May create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:
(1)Subsection (a) does not apply unless the secured party is entitled under an agreement:
(A)To charge back uncollected collateral; or
(B)Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and
(2)Subsections (b) and (c) do not apply.
Source: SL 2000, ch 231; SL 2009, ch 254, §827.
Structure South Dakota Codified Laws
Title 57A - Uniform Commercial Code
Chapter 09 - Secured Transactions
Section 57A-9-101 - Short title.
Section 57A-9-102 - Definitions and index of definitions.
Section 57A-9-104 - Control of deposit account.
Section 57A-9-105 - Control of electronic chattel paper.
Section 57A-9-106 - Control of security, security settlement, or commodity contract.
Section 57A-9-107 - Control of letter-of-credit right.
Section 57A-9-108 - Sufficiency of description of property.
Section 57A-9-109 - Application of chapter.
Section 57A-9-110 - Provisions governing security interests arising under other sections.
Section 57A-9-202 - Immateriality of title to collateral.
Section 57A-9-204 - Interest in after-acquired collateral.
Section 57A-9-207 - Rights and duties of secured party having possession or control of collateral.
Section 57A-9-208 - Additional duties of secured party having control of collateral.
Section 57A-9-210 - Response to request for accounting, statement of account, or list of collateral.
Section 57A-9-301 - Law governing perfection, effect of perfection or nonperfection, and priority.
Section 57A-9-302 - Law governing perfection and priority issues relating to farm products.
Section 57A-9-307 - Location of debtor.
Section 57A-9-308 - What constitutes perfection of security interest or agricultural lien.
Section 57A-9-309 - Security interests that are perfected when they attach.
Section 57A-9-313 - Perfection by taking possession of collateral or by delivery.
Section 57A-9-314 - Perfection by control of collateral.
Section 57A-9-316 - Effect of change in governing law.
Section 57A-9-318 - Effect of sale of collateral on rights of debtor.
Section 57A-9-319 - Rights of consignee in relation to creditors and purchasers.
Section 57A-9-324 - Priority of perfected purchase money security interest.
Section 57A-9-326 - Subordination of security interest created by new debtor.
Section 57A-9-327 - Priority among conflicting security interests in same deposit account.
Section 57A-9-328 - Priority among conflicting security interests in same investment property.
Section 57A-9-329 - Priority among conflicting security interests in same letter-of-credit right.
Section 57A-9-330 - Priority of rights of purchaser of chattel paper--Priority in proceeds.
Section 57A-9-332 - Transferee of money or funds from deposit account.
Section 57A-9-333 - "Possessory lien"--Priority over security interest.
Section 57A-9-334 - Security interest in fixtures--Priority--Security interest in growing crops.
Section 57A-9-335 - Security interest in accession--Collateral that becomes an accession.
Section 57A-9-339 - Subordination by agreement.
Section 57A-9-401 - Transferability of debtor's rights.
Section 57A-9-402 - Secured party's liability for debtor's acts or omissions.
Section 57A-9-403 - "Value"--Agreement not to assert claims or defenses against assignee.
Section 57A-9-404 - Claims and defenses assertable against assignee.
Section 57A-9-405 - Effect of modification or substitution of assigned contract.
Section 57A-9-407 - Ineffective prohibitions or restrictions in lease agreement.
Section 57A-9-501.1 - Validation of noncomplying statements.
Section 57A-9-503 - Name of debtor and secured party.
Section 57A-9-504 - Sufficiency of description of collateral.
Section 57A-9-506 - Substantial compliance with requirements.
Section 57A-9-507 - Continuing effectiveness of filed financing statement.
Section 57A-9-508 - Effect of new debtor's rights in collateral.
Section 57A-9-509 - Authority to file financing statement or amendment adding collateral or debtor.
Section 57A-9-510 - Effectiveness of filed record.
Section 57A-9-511 - Person constituting secured party of record.
Section 57A-9-512 - Procedure for amending financing statement--Effectiveness.
Section 57A-9-513 - Termination statement.
Section 57A-9-515 - Effective period for filed financing statement--Effect of lapse.
Section 57A-9-516 - What constitutes filing--Refusal to accept for filing--Effect.
Section 57A-9-517 - Effect of incorrect indexing of record.
Section 57A-9-518 - Information statement regarding record.
Section 57A-9-519 - Duties of filing office in dealing with records.
Section 57A-9-520 - Refusal by filing office to accept record.
Section 57A-9-521 - Forms for financing statement, amendment to statement, and addendum for either.
Section 57A-9-524 - Excuses for filing office failure to meet time limits.
Section 57A-9-525 - Fees for filing and indexing records.
Section 57A-9-525.2 - Central filing system--Promulgation of regulations.
Section 57A-9-525.3 - Central agricultural security interest filing system--Adoption of rules.
Section 57A-9-525.4 - Fee for crop or livestock effective finance statement microfiche master list.
Section 57A-9-526 - Rules and practices for filing offices.
Section 57A-9-527 - Financing statement and annual report filing fee fund.
Section 57A-9-528 - Fees deposited in filing fee fund.
Section 57A-9-529 - Disposition of balance of funds.
Section 57A-9-530 - Combined financing statement for farm products.
Section 57A-9-602 - Waiver or variance of rules by debtor or obligor.
Section 57A-9-603 - Agreement on standards for fulfilling rights and duties.
Section 57A-9-606 - Time of default in connection with agricultural lien.
Section 57A-9-607 - Collection and enforcement by secured party.
Section 57A-9-608 - Application of proceeds--Entitlement to surplus or liability for deficiency.
Section 57A-9-609 - Secured party's rights with respect to collateral following default.
Section 57A-9-609.2 - Farm products fraud--Misdemeanor.
Section 57A-9-610 - Disposition of collateral after default--Treatment of warranties.
Section 57A-9-611 - "Notification date"--Notification of disposition of collateral.
Section 57A-9-612 - Reasonable time for sending notification.
Section 57A-9-613 - Contents of notification--Form.
Section 57A-9-614 - Notice of disposition for consumer goods transaction--Form.
Section 57A-9-617 - Rights of transferee of collateral disposed of after default.
Section 57A-9-618 - Rights and duties of secondary obligor.
Section 57A-9-621 - Persons who must receive secured party's proposal to accept collateral.
Section 57A-9-622 - Effect of acceptance of collateral.
Section 57A-9-623 - Persons who may redeem collateral--Procedure.
Section 57A-9-624 - Waiver of rights.
Section 57A-9-626 - Action in which amount of deficiency or surplus is in issue.
Section 57A-9-628 - Limitations on liability of secured party.
Section 57A-9-701 - Effective date of chapter.
Section 57A-9-703 - Effect of division on security interests enforceable before July 1, 2001.
Section 57A-9-705 - Effect of certain actions prior to July 1, 2001.
Section 57A-9-707 - Pre-effective-date financing statement--Amendment, continuation, termination.
Section 57A-9-801 - Effective date of SL 2012, ch 238.
Section 57A-9-802 - Savings clause.
Section 57A-9-803 - Security interest perfected before effective date.
Section 57A-9-804 - Security interest unperfected before effective date.
Section 57A-9-805 - Effectiveness of action taken before effective date.
Section 57A-9-807 - Amendment of pre-effective-date financing statement.
Section 57A-9-808 - Person entitled to file initial financing statement or continuation statement.