California Commercial Code

§ 9207

COM § 9207 Effective Jan 1, 2024Div. 9 · Ch. 2

Statute text

(a)Except as otherwise provided in subdivision (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 subdivision (d), if a secured party has possession of collateral, all of the following apply:

(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.

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Legislative history

Amended by Stats. 2023, Ch. 210, Sec. 32. (SB 95) Effective January 1, 2024.