J & N REALTY, INC.

LIEN REGULATIONS  

Civil Code

 

2872. A lien is a charge imposed in some mode other than by a transfer in trust upon specific property by which it is made security for the performance of an act. 

2873. Liens are either general or special. 

2874. A general lien is one which the holder thereof is entitled to enforce as a security for the performance of all the obligations, or all of a particular class of obligations, which exist in his favor against the owner of the property. 

2875. A special lien is one which the holder thereof can enforce only as security for the performance of a particular act or obligation, and of such obligations as may be incidental thereto. 

2876. Where the holder of a special lien is compelled to satisfy a prior lien for his own protection, he may enforce payment of the amount so paid by him, as a part of the claim for which his own lien exists. 

2877.   Contracts of mortgage, pledge, bottomry, or respondentia, are subject to all the provisions of this Chapter. 

2881.   A lien is created: 

   1. By contract of the parties; or, 

   2. By operation of law. 

2882.  No lien arises by mere operation of law until the time at which the act to be secured thereby ought to be performed. 

2883. (a) An agreement may be made to create a lien upon property not yet acquired by the party agreeing to give the lien, or not yet in existence. In that case the lien agreed for attaches from the time when the party agreeing to give it acquires an interest in the thing, to the extent of such interest. 

   (b) For purposes of subdivision (a), an agreement by a beneficiary of an estate that is subject to administration, as provided in Division 7 (commencing with Section 7000) of the Probate Code, to create a lien upon real property in the estate that is undistributed at the time the agreement is entered into, shall create no lien upon the real property unless and until the real property is distributed to that beneficiary. Upon recordation of an order confirming the sale of the real property pursuant to Section 10313 of the Probate Code and the recording of a duly executed deed in accordance therewith, any expectancy of a lien in the real property under the agreement shall be extinguished. 

2884. A lien may be created by contract, to take immediate effect, as security for the performance of obligations not then in existence. 

2885. Any state agency, upon recording a state tax lien against real property, shall mail written notice of the recordation to the tax debtor, unless previous correspondence mailed to the address of record was returned undelivered with no forwarding address. Failure to notify the tax debtor shall not affect the constructive notice otherwise imparted by recordation, nor shall it affect the force, effect, or priority otherwise accorded such tax lien. 

2888. Notwithstanding an agreement to the contrary, a lien, or a contract for a lien, transfers no title to the property subject to the lien. 

2889. All contracts for the forfeiture of property subject to a lien, in satisfaction of the obligation secured thereby, and all contracts in restraint of the right of redemption from a lien, are void. 

2890. The creation of a lien does not of itself imply that any person is bound to perform the act for which the lien is a security. 

2891.   The existence of a lien upon property does not of itself entitle the person in whose favor it exists to a lien upon the same property for the performance of any other obligation than that which the lien originally secured. 

2892. One who holds property by virtue of a lien thereon, is not entitled to compensation from the owner thereof for any trouble or expense which he incurs respecting it, except to the same extent as a borrower, under Sections 1892 and 1893. 

2897. Other things being equal, different liens upon the same property have priority according to the time of their creation, except in cases of bottomry and respondentia. 

2898. (a) A mortgage or deed of trust given for the price of real property, at the time of its conveyance, has priority over all other liens created against the purchaser, subject to the operation of the recording laws. 

   (b) The priority of the lien of a mortgage or deed of trust on an estate for years in real property shall be determined in the same manner as for determining the priority of a lien of a mortgage or deed of trust on real property. 

2899. Where one has a lien upon several things, and other persons have subordinate liens upon, or interests in, some but not all of the same things, the person having the prior lien, if he can do so without risk of loss to himself, or of injustice to other persons, must resort to the property in the following order, on the demand of any party interested: 

   1. To the things upon which he has an exclusive lien; 

   2. To the things which are subject to the fewest subordinate liens; 

   3. In like manner inversely to the number of subordinate liens upon the same things; and, 

   4. When several things are within one of the foregoing classes, and subject to the same number of liens, resort must be had-- 

   (1.) To the things which have not been transferred since the prior lien was created; 

   (2.) To the things which have been so transferred without a valuable consideration; and, 

   (3.) To the things which have been so transferred for a valuable consideration in the inverse order of the transfer. 

2903. Every person, having an interest in property subject to a lien, has a right to redeem it from the lien, at any time after the claim is due, and before his right of redemption is foreclosed, and, by such redemption, becomes subrogated to all the benefits of the lien, as against all owners of other interests in the property, except in so far as he was bound to make such redemption for their benefit. 

2904. One who has a lien inferior to another, upon the same property, has a right: 

   1. To redeem the property in the same manner as its owner might, from the superior lien; and, 

   2. To be subrogated to all the benefits of the superior lien, when necessary for the protection of his interests, upon satisfying the claim secured thereby. 

2905. Redemption from a lien is made by performing, or offering to perform, the act for the performance of which it is a security, and paying, or offering to pay, the damages, if any, to which the holder of the lien is entitled for delay. 

2906. An option granted to a secured party by a debtor to acquire an interest in real property collateral takes priority as of its recording and is effective according to its terms if the right to exercise the option is not dependent upon the occurrence of a default with respect to the security agreement and, where the real property which is the subject of the option is other than residential real property containing four or fewer units, shall not be deemed invalid or ineffective on the basis that the secured party has impaired the debtor's equity of redemption in violation of common law or Section 

2889. This section shall not be construed to make valid or effective an otherwise unlawful option nor shall any inference be drawn from this section as to the validity or application of common law with respect to residential real property containing four or fewer units. 

2909. A lien is to be deemed accessory to the act for the performance of which it is a security, whether any person is bound for such performance or not, and is extinguishable in like manner with any other accessory obligation. 

2910. The sale of any property on which there is a lien, in satisfaction of the claim secured thereby, or in case of personal property, its wrongful conversion by the person holding the lien, extinguishes the lien thereon. 

2911. A lien is extinguished by the lapse of time within which, under the provisions of the Code of Civil Procedure, either: 

   1. An action can be brought upon the principal obligation, or 

   2. A treasurer, street superintendent or other public official may sell any real property to satisfy a public improvement assessment or any bond issued to represent such assessment and which assessment is secured by a lien upon said real property; whichever is later. 

   Anything to the contrary notwithstanding, any lien heretofore existing or which may hereafter exist upon real property to secure the payment of a public improvement assessment shall be presumed to have been extinguished at the expiration of four years after the due date of such assessment or the last installment thereof, or four years after the date the lien attaches, or on January 1, 1947, whichever is later, or in the event bonds were or shall be issued to represent such assessment, the lien shall then be presumed to have been extinguished at the expiration of four years after the due date of said bonds or of the last installment thereof or of the last principal coupon attached thereto, or on January 1, 1947, whichever is later. The presumptions mentioned in this paragraph shall be conclusive in favor of a bona fide purchaser for value of said property after such dates. 

2912. The partial performance of an act secured by a lien does not extinguish the lien upon any part of the property subject thereto, even if it is divisible. 

2913. The voluntary restoration of property to its owner by the holder of a lien thereon dependent upon possession extinguishes the lien as to such property, unless otherwise agreed by the parties, and extinguishes it, notwithstanding any such agreement, as to creditors of the owner and persons, subsequently acquiring a title to the property, or a lien thereon, in good faith, and for value. 

2914.   None of the provisions of this chapter apply to any transaction or security interest governed by the Uniform Commercial Code.