Tommy buys a dehumidifier from Home Depot for $750 and finances the purchase through Home Depot. He signs a security agreement and a note in favor of Home Depot for $750. Home Depot files a financing statement as to this transaction. Tommy finds that he needs a bigger and more powerful dehumidifier and sells the one bought at Home Depot to his neighbor Pete at a garage sale for $500. Which statement is true concerning these facts? 

	A.	Home Depot did not have a properly perfected security interest in the dehumidifier because it filed a financing statement instead of relying on the automatic perfection rule for purchase money security interests.
	B.	Home Depot did have a properly perfected security interest in the dehumidifier which was automatically perfected as a purchase money security interest but lost the security interest as a result of the garage sale rule.
	C.	Home Depot did not have a properly perfected security interest either as a purchase money security interest or by filing due to the garage sale rule.
	D.	Home Depot did have an automatically perfected purchase money security interest in the dehumidifier and it retained its interest after the transfer to Pete because it filed its financing statement.

Answer rating: 100% (QA)

Correct Option C Home Depot did not have a properly perfected security interest either as ... View the full answer