Michigan Collections Manager License Practice Test

If an agreement covers both personal and real property, what can the secured party do?

1. Only move on the real property

2. Move on personal property without affecting real property rights

3. Sell the real property immediately

4. Transfer ownership of the personal property

The correct answer is: Move on personal property without affecting real property rights

The correct choice highlights the secured party's ability to take action on personal property without impacting their rights concerning real property. In the context of security interests, when an agreement includes both personal and real property, the secured party typically has distinct rights and remedies applicable to each type of property. Personal property can be seized or repossessed if the secured party has a valid security interest and the debtor defaults. This allows the secured party to take specific actions regarding the personal property, such as moving it to recover the debt. These actions do not inherently affect the rights associated with the real property included in the security agreement, meaning the secured party can enforce their rights over personal property independently. Understanding the distinction between personal and real property is crucial, as they are governed by different legal frameworks. This clarity allows secured parties to efficiently manage and enforce their rights with respect to the assets securing their interest, ensuring they can pursue available remedies without compromising the separate interests they may hold in real property.