(a) Except as otherwise provided in subsection (b) of this section, whether a notification is sent within a reasonable time is a question of fact.
(b) In a transaction other than a consumer transaction, a notification of disposition sent after default and ten days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.
Source: L. 2001: Entire article R&RE, p. 1405, � 1, effective July 1.
4-9-613. Contents and form of notification before disposition of collateral: general. (a) Except in a consumer-goods transaction, the following rules apply:
(1) The contents of a notification of disposition are sufficient if the notification:
(A) Describes the debtor and the secured party;
(B) Describes the collateral that is the subject of the intended disposition;
(C) States the method of intended disposition;
(D) States that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and
(E) States the time and place of a public disposition or the time after which any other disposition is to be made.
(2) Whether the contents of a notification that lacks any of the information specified in paragraph (1) of this subsection (a) are nevertheless sufficient is a question of fact.
(3) The contents of a notification providing substantially the information specified in paragraph (1) of this subsection (a) are sufficient, even if the notification includes:
(A) Information not specified by said paragraph (1); or
(B) Minor errors that do not cause damages to a person who relies on the information.
(4) A particular phrasing of the notification is not required.
(5) The following form of notification and the form appearing in section 4-9-614 (a)(3), when completed in accordance with the instructions in subsection (b) of this section and section 4-9-614 (b), each provides sufficient information:
NOTIFICATION OF DISPOSITION OF COLLATERAL
To: (Name of debtor, obligor, or other person to which the notification is sent)
From: (Name, address, and telephone number of secured party)
{1} Name of any debtor that is not an addressee: (Name of each debtor)
{2} We will sell (describe collateral) (to the highest qualified bidder) at public sale. A sale could include a lease or license. The sale will be held as follows:
(Date)
(Time)
(Place)
{3} We will sell (describe collateral) at private sale sometime after (date). A sale could include a lease or license.
{4} You are entitled to an accounting of the unpaid indebtedness secured by the property that we intend to sell or, as applicable, lease or license.
{5} If you request an accounting you must pay a charge of $ (amount).
{6} You may request an accounting by calling us at (telephone number).
(b) The following instructions apply to the form of notification in subsection (a)(5) of this section:
(1) The instructions in this subsection (b) refer to the numbers in braces before items in the form of notification in subsection (a)(5) of this section. Do not include the numbers or braces in the notification. The numbers and braces are used only for the purpose of these instructions.
(2) Include and complete item {1} only if there is a debtor that is not an addressee of the notification and list the name or names.
(3) Include and complete either item {2}, if the notification relates to a public disposition of the collateral, or item {3}, if the notification relates to a private disposition of the collateral. If item {2} is included, include the words to the highest qualified bidder only if applicable.
(4) Include and complete items {4} and {6}.
(5) Include and complete item {5} only if the sender will charge the recipient for an accounting.
Source: L. 2001: Entire article R&RE, p. 1406, � 1, effective July 1. L. 2023: (a)(5) amended and (b) added, (SB 23-090), ch. 136, p. 561, � 80, effective August 7.
Editor's note - Colorado legislative change: Colorado substituted the word disposition for the word sale in subsection (a)(1)(E) and substituted the phrase cause damages to a person who relies on the information for the phrase seriously misleading in subsection (a)(3)(B). Colorado added the phrase or writing us at [address] at the end of the notification form contained in subsection (a)(5).
4-9-614. Contents and form of notification before disposition of collateral: consumer-goods transaction. (a) In a consumer-goods transaction, the following rules apply:
(1) A notification of disposition must provide the following information:
(A) The information specified in section 4-9-613 (a)(1);
(B) A description of any liability for a deficiency of the person to which the notification is sent;
(C) A telephone number and mailing address from which the amount that must be paid to the secured party to redeem the collateral under section 4-9-623 is available; and
(D) A telephone number and mailing address from which additional information concerning the disposition and the obligation secured is available.
(2) A particular phrasing of the notification is not required.
(3) The following form of notification, when completed in accordance with the instructions in subsection (b) of this section, provides sufficient information:
[Name and address of secured party]
[Date]
NOTICE OF OUR PLAN TO SELL PROPERTY
(Name and address of any obligor who is also a debtor)
Subject: (Identify transaction)
We have your (describe collateral), because you broke promises in our agreement.
{1} We will sell (describe collateral) at public sale. A sale could include a lease or license. The sale will be held as follows:
(Date)
(Time)
(Place)
You may attend the sale and bring bidders if you want.
{2} We will sell (describe collateral) at private sale sometime after (date). A sale could include a lease or license.
{3} The money that we get from the sale, after paying our costs, will reduce the amount you owe. If we get less money than you owe, you (will or will not, as applicable) still owe us the difference. If we get more money than you owe, you will get the extra money, unless we must pay it to someone else.
{4} You can get the property back at any time before we sell it by paying us the full amount you owe, not just the past due payments, including our expenses. To learn the exact amount you must pay, call us at (telephone number).
{5} If you want us to explain to you in (writing) (writing or in (description of electronic record)) (description of electronic record) how we have figured the amount that you owe us, {6} call us at (telephone number) (or) (write us at (secured party's address)) (or contact us by (description of electronic communication method)) {7} and request (a written explanation) (a written explanation or an explanation in (description of electronic record)) (an explanation in (description of electronic record)).
{8} We will charge you $ (amount) for the explanation if we sent you another written explanation of the amount you owe us within the last six months.
{9} If you need more information about the sale (call us at (telephone number)) (or) (write us at (secured party's address)) (or contact us by (description of electronic communication method)).
{10} We are sending this notice to the following other people who have senate bill 23-090 insert copy an interest in (describe collateral) or who owe money under your agreement:
(Names of all other debtors and obligors, if any)
(4) A notification in the form of paragraph (3) of this subsection (a) is sufficient, even if additional information appears at the end of the form.
(5) A notification in the form of paragraph (3) of this subsection (a) is sufficient, even if it includes errors in information not required by paragraph (1) of this subsection (a), unless the error is misleading with respect to rights arising under this article.
(6) If a notification under this section is not in the form of paragraph (3) of this subsection (a), law other than this article determines the effect of including information not required by paragraph (1) of this section.
(b) The following instructions apply to the form of notification in subsection (a)(3) of this section:
(1) The instructions in this subsection (b) refer to the numbers in braces before items in the form of notification in subsection (a)(3) of this section. Do not include the numbers or braces in the notification. The numbers and braces are used only for the purpose of these instructions.
(2) Include and complete either item {1}, if the notification relates to a public disposition of the collateral, or item {2}, if the notification relates to a private disposition of the collateral.
(3) Include and complete items {3}, {4}, {5}, {6}, and {7}.
(4) In item {5}, include and complete any one of the three alternative methods for the explanation-writing, writing or electronic record, or electronic record.
(5) In item {6}, include the telephone number. In addition, the sender may include and complete either or both of the two additional alternative methods of communication--writing or electronic communication--for the recipient of the notification to communicate with the sender. Neither of the two additional methods of communication is required to be included.
(6) In item {7}, include and complete the method or methods for the explanation--writing, writing or electronic record, or electronic record-included in item {5}.
(7) Include and complete item {8} only if a written explanation is included in item {5} as a method for communicating the explanation and the sender will charge the recipient for another written explanation.
(8) In item {9}, include either the telephone number or the address or both the telephone number and the address. In addition, the sender may include and complete the additional method of communication--electronic communication--for the recipient of the notification to communicate with the sender. The additional method of electronic communication is not required to be included.
(9) If item {10} does not apply, insert None after agreement:.
Source: L. 2001: Entire article R&RE, p. 1407, � 1, effective July 1. L. 2023: (a)(1)(A) and (a)(3) amended and (b) added, (SB 23-090), ch. 136, p. 563, � 81, effective August 7.
Editor's note - Colorado legislative change: Colorado added the phrase and mailing address in subsection (a)(1)(C) and substituted and for or in subsection (a)(1)(D). Colorado added the phrase or write us at [secured party's address] in the form regarding how to learn the exact amount the debtor must pay. The uniform act's form regarding explanations reads: We will charge you $ for the explanation if we sent you another written explanation of the amount you owe us within the last six months.
4-9-615. Application of proceeds of disposition; liability for deficiency and right to surplus. (a) A secured party shall apply or pay over for application the cash proceeds of disposition under section 4-9-610 in the following order to:
(1) The reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and reasonable legal expenses incurred by the secured party;
(2) The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made;
(3) The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:
(A) The secured party receives from the holder of the subordinate security interest or other lien a signed demand for proceeds before distribution of the proceeds is completed; and
(B) In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and
(4) A secured party that is a consignor of the collateral if the secured party receives from the consignor a signed demand for proceeds before distribution of the proceeds is completed.
(b) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder's demand under paragraph (3) of subsection (a) of this section.
(c) A secured party need not apply or pay over for application noncash proceeds of disposition under section 4-9-610 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.
(d) If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subsection (a) of this section and permitted by subsection (c) of this section:
(1) Unless paragraph (4) of subsection (a) of this section requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and
(2) The obligor is liable for any deficiency.
(e) If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes:
(1) The debtor is not entitled to any surplus; and
(2) The obligor is not liable for any deficiency.
(f) The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been realized in a disposition complying with this part 6 to a transferee other than the secured party, a person related to the secured party, or a secondary obligor if:
(1) The transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor; and
(2) The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.
(g) A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under which the disposition is made:
(1) Takes the cash proceeds free of the security interest or other lien;
(2) Is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien; and
(3) Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.
Source: L. 2001: Entire article R&RE, p. 1409, � 1, effective July 1. L. 2023: (a)(3)(A) and (a)(4) amended, (SB 23-090), ch. 136, p. 566, � 82, effective August 7.
Editor's note: (1) This section is similar to former � 4-9-504 as it existed prior to 2001.
(2) Colorado legislative change: Colorado added the phrase under section 4-9-610 in the introductory portion to subsection (a), added the word reasonable before the word legal in subsection (a)(1), and substituted the phrase section 4-9-610 for this section in subsection (c).