8.9A-334 - A-334. Priority of security interests in fixtures and crops.
§ 8.9A-334. Priority of security interests in fixtures and crops.
(a) Security interest in fixtures under this title. A security interest underthis title may be created in goods that are fixtures or may continue in goodsthat become fixtures. A security interest does not exist under this title inordinary building materials incorporated into an improvement on land.
(b) Security interest in fixtures under real property law. This title doesnot prevent creation of an encumbrance upon fixtures under real property law.
(c) General rule; subordination of security interest in fixtures. In casesnot governed by subsections (d) through (h), a security interest in fixturesis subordinate to a conflicting interest of an encumbrancer or owner of therelated real property other than the debtor.
(d) Fixtures purchase-money priority. Except as otherwise provided insubsection (h), a perfected security interest in fixtures has priority over aconflicting interest of an encumbrancer or owner of the real property if thedebtor has an interest of record in or is in possession of the real propertyand:
(1) the security interest is a purchase-money security interest;
(2) the interest of the encumbrancer or owner arises before the goods becomefixtures; and
(3) the security interest is perfected by a fixture filing before the goodsbecome fixtures or within twenty days thereafter.
(e) Priority of security interest in fixtures over interests in realproperty. A perfected security interest in fixtures has priority over aconflicting interest of an encumbrancer or owner of the real property if:
(1) the debtor has an interest of record in the real property or is inpossession of the real property and the security interest:
(A) is perfected by a fixture filing before the interest of the encumbranceror owner is of record; and
(B) has priority over any conflicting interest of a predecessor in title ofthe encumbrancer or owner;
(2) before the goods become fixtures, the security interest is perfected byany method permitted by this title and the fixtures are readily removable:
(A) factory or office machines;
(B) equipment that is not primarily used or leased for use in the operationof the real property; or
(C) replacements of domestic appliances that are consumer goods;
(3) the conflicting interest is a lien on the real property obtained by legalor equitable proceedings after the security interest was perfected by anymethod permitted by this title; or
(4) the security interest is:
(A) created in a manufactured home in a manufactured-home transaction; and
(B) perfected pursuant to a statute described in § 8.9A-311 (a) (2).
(f) Priority based on consent, disclaimer, or right to remove. A securityinterest in fixtures, whether or not perfected, has priority over aconflicting interest of an encumbrancer or owner of the real property if:
(1) the encumbrancer or owner has, in an authenticated record, consented tothe security interest or disclaimed an interest in the goods as fixtures; or
(2) the debtor has a right to remove the goods as against the encumbrancer orowner.
(g) Continuation of subdivision (f) (2) priority. The priority of thesecurity interest under subdivision (f) (2) continues for a reasonable timeif the debtor's right to remove the goods as against the encumbrancer orowner terminates.
(h) Priority of construction mortgage. A mortgage is a construction mortgageto the extent that it secures an obligation incurred for the construction ofan improvement on land, including the acquisition cost of the land, if arecorded record of the mortgage so indicates. Except as otherwise provided insubsections (e) and (f), a security interest in fixtures is subordinate to aconstruction mortgage if a record of the mortgage is recorded before thegoods become fixtures and the goods become fixtures before the completion ofthe construction. A mortgage has this priority to the same extent as aconstruction mortgage to the extent that it is given to refinance aconstruction mortgage.
(i) Priority of security interest in crops. A perfected security interest incrops growing on real property has priority over a conflicting interest of anencumbrancer or owner of the real property if the debtor has an interest ofrecord in or is in possession of the real property.
(j) Subsection (i) prevails. Subsection (i) prevails over any inconsistentprovisions of the following statutes.
(1964, c. 219, § 8.9-313; 1973, c. 509; 1983, c. 204; 2000, c. 1007.)