California Commercial Code 9334 – (a) A security interest under this division may be created in …
(a) A security interest under this division may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this division in ordinary building materials incorporated into an improvement on land.
(b) This division does not prevent creation of an encumbrance upon fixtures under real property law.
Terms Used In California Commercial Code 9334
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Lien: A claim against real or personal property in satisfaction of a debt.
- Money: means a medium of exchange that is currently authorized or adopted by a domestic or foreign government. See California Commercial Code 1201
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Purchase: means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property. See California Commercial Code 1201
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. See California Commercial Code 1201
- Right: includes remedy. See California Commercial Code 1201
- Security interest: includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Division 9 (commencing with Section 9101). See California Commercial Code 1201
- Statute: A law passed by a legislature.
(c) In cases not governed by subdivisions (d) to (h), inclusive, a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor.
(d) Except as otherwise provided in subdivision (h), a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property and all of the following conditions are satisfied:
(1) The security interest is a purchase money security interest.
(2) The interest of the encumbrancer or owner arises before the goods become fixtures.
(3) The security interest is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter.
(e) A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if any of the following conditions is satisfied:
(1) The debtor has an interest of record in the real property or is in possession of the real property and both of the following conditions are satisfied:
(A) The security interest is perfected by a fixture filing before the interest of the encumbrancer or owner is of record.
(B) The security interest has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner.
(2) The fixtures are readily removable factory or office machines or readily removable replacements of domestic appliances that are consumer goods.
(3) The conflicting interest is a lien on the real property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this division.
(4) The security interest is both of the following:
(A) Created in a manufactured home in a manufactured home transaction.
(B) Perfected pursuant to a statute described in paragraph (2) of subdivision (a) of Section 9311.
(f) A security interest in fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer or owner of the real property if either of the following conditions is satisfied:
(1) The encumbrancer or owner has, in a signed record, consented to the security interest or disclaimed an interest in the goods as fixtures.
(2) The debtor has a right to remove the goods as against the encumbrancer or owner.
(g) The priority of the security interest under paragraph (2) of subdivision (f) continues for a reasonable time if the debtor’s right to remove the goods as against the encumbrancer or owner terminates.
(h) A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the land, if a recorded record of the mortgage so indicates. Except as otherwise provided in subdivisions (e) and (f), a security interest in fixtures is subordinate to a construction mortgage if a record of the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction. A mortgage has this priority to the same extent as a construction mortgage to the extent that it is given to refinance a construction mortgage.
(i) A perfected security interest in crops growing on real property has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in, or is in possession of, the real property.
(Amended by Stats. 2023, Ch. 210, Sec. 54. (SB 95) Effective January 1, 2024.)