                                 CODE OF VIRGINIA

WHEN POSSESSION BY OR DELIVERY TO SECURED PARTY PERFECTS SECURITY INTEREST
WITHOUT FILING (§ 8.9A-313)

a. Perfection by possession or delivery. Except as otherwise provided in
subsection (b), a secured party may perfect a security interest in goods,
instruments, negotiable tangible documents, or tangible money by taking
possession of the collateral. A secured party may perfect a security interest in
certificated securities by taking delivery of the certificated securities under
&#xA7; 8.8A-301.

b. Goods covered by certificate of title. With respect to goods covered by a
certificate of title issued by this Commonwealth, a secured party may perfect a
security interest in the goods by taking possession of the goods only in the
circumstances described in &#xA7; 8.9A-316 (d).

c. Collateral in possession of person other than debtor. With respect to
collateral other than certificated securities and goods covered by a document, a
secured party takes possession of collateral in the possession of a person other
than the debtor, the secured party, or a lessee of the collateral from the
debtor in the ordinary course of the debtor&#8217;s business, when:

   1. the person in possession signs a record acknowledging that it holds
   possession of the collateral for the secured party&#8217;s benefit; or

   2. the person takes possession of the collateral after having signed a record
   acknowledging that it will hold possession of the collateral for the secured
   party&#8217;s benefit.

d. Time of perfection by possession; continuation of perfection. If perfection
of a security interest depends upon possession of the collateral by a secured
party, perfection occurs not earlier than the time the secured party takes
possession and continues only while the secured party retains possession.

e. Time of perfection by delivery; continuation of perfection. A security
interest in a certificated security in registered form is perfected by delivery
when delivery of the certificated security occurs under &#xA7; 8.8A-301 and
remains perfected by delivery until the debtor obtains possession of the
security certificate.

f. Acknowledgment not required. A person in possession of collateral is not
required to acknowledge that it holds possession for a secured party&#8217;s
benefit.

g. Effectiveness of acknowledgment; no duties or confirmation. If a person
acknowledges that it holds possession for the secured party&#8217;s benefit:

   1. the acknowledgment is effective under subsection (c) or &#xA7; 8.8A-301
   (a), even if the acknowledgment violates the rights of a debtor; and

   2. unless the person otherwise agrees or law other than this title otherwise
   provides, the person does not owe any duty to the secured party and is not
   required to confirm the acknowledgment to another person.

h. Secured party&#8217;s delivery to person other than debtor. A secured party
having possession of collateral does not relinquish possession by delivering the
collateral to a person other than the debtor or a lessee of the collateral from
the debtor in the ordinary course of the debtor&#8217;s business if the person
was instructed before the delivery or is instructed contemporaneously with the
delivery:

   1. to hold possession of the collateral for the secured party&#8217;s benefit;
   or

   2. to redeliver the collateral to the secured party.

i. Effect of delivery under subsection (h); no duties or confirmation. A secured
party does not relinquish possession, even if a delivery under subsection (h)
violates the rights of a debtor. A person to which collateral is delivered under
subsection (h) does not owe any duty to the secured party and is not required to
confirm the delivery to another person unless the person otherwise agrees or law
other than this title otherwise provides.

HISTORY: 1964, c. 219, § 8.9-305; 1973, c. 509; 1984, c. 613; 1996, c. 216, §
8.9-115; 1997, c. 343; 2000, c. 1007; 2004, c. 200; 2024, c. 652.