SECTIONS 8450-8458 - California Statutes

CIVIL CODE

SECTION 8450-8458

8450. (a) A lien under this chapter, other than a lien provided for
in Section 8402, has priority over a lien, mortgage, deed of trust,
or other encumbrance on the work of improvement or the real property
on which the work of improvement is situated, that (1) attaches after
commencement of the work of improvement or (2) was unrecorded at the
commencement of the work of improvement and of which the claimant
had no notice.
(b) Subdivision (a) is subject to the exception provided for in
Section 8452.

8452. A mortgage or deed of trust, otherwise subordinate to a lien
under Section 8450, has priority over a lien for work provided after
recordation of a payment bond that satisfies all of the following
requirements:
(a) The bond refers to the mortgage or deed of trust.
(b) The bond is in an amount not less than 75 percent of the
principal amount of the mortgage or deed of trust.

8454. If a site improvement is provided for in a direct contract
separate from the direct contract for the remainder of the work of
improvement, the site improvement is deemed a separate work of
improvement and commencement of the site improvement is not
commencement of the remainder of the work of improvement.

8456. (a) This section applies to a construction loan secured by a
mortgage or deed of trust that has priority over a lien under this
chapter.
(b) An optional advance of funds by the construction lender that
is used for construction costs has the same priority as a mandatory
advance of funds by the construction lender, provided that the total
of all advances does not exceed the amount of the original
construction loan.

8458. (a) Except as provided in subdivision (b), a lien provided
for in Section 8402 has priority over:
(1) A mortgage, deed of trust, or other encumbrance that attaches
after commencement of the site improvement.
(2) A mortgage, deed of trust, or other encumbrance that was
unrecorded at the commencement of the site improvement and of which
the claimant had no notice.
(3) A mortgage, deed of trust, or other encumbrance that was
recorded before commencement of the site improvement, if given for
the sole or primary purpose of financing the site improvement. This
subdivision does not apply if the loan proceeds are, in good faith,
placed in the control of the lender pursuant to a binding agreement
with the borrower to the effect that (A) the proceeds are to be
applied to the payment of claimants and (B) no portion of the
proceeds will be paid to the borrower in the absence of satisfactory
evidence that all claims have been paid or that the time for
recording a claim of lien has expired and no claim of lien has been
recorded.
(b) A mortgage or deed of trust, otherwise subordinate under
subdivision (a), has priority over a lien provided for in Section
8402 if a payment bond in an amount not less than 50 percent of the
principal amount of the mortgage or deed of trust is recorded before
completion of the work of improvement.