2005 California Code of Civil Procedure Sections 1265.210-1265.250 Article 3. Encumbrances

1265.210.  As used in this article, "lien" means a mortgage, deed of
trust, or other security interest in property whether arising from
contract, statute, common law, or equity.
1265.220.  Where property acquired by eminent domain is encumbered
by a lien and the indebtedness secured thereby is not due at the time
of the entry of judgment, the amount of such indebtedness may be, at
the option of the plaintiff, deducted from the judgment and the lien
shall be continued until such indebtedness is paid; but the amount
for which, as between the plaintiff and the defendant, the plaintiff
is liable under Article 5 (commencing with Section 1268.410) of
Chapter 11 may not be deducted from the judgment.
1265.225.  (a) Where there is a partial taking of property
encumbered by a lien, the lienholder may share in the award only to
the extent determined by the court to be necessary to prevent an
impairment of the security, and the lien shall continue upon the part
of the property not taken as security for the unpaid portion of the
indebtedness.
   (b) Notwithstanding subdivision (a), the lienholder and the
property owner may at any time after commencement of the proceeding
agree that some or all of the award shall be apportioned to the
lienholder on the indebtedness.
1265.230.  (a) This section applies only where there is a partial
taking of property encumbered by a lien and the part taken or some
portion of it is also encumbered by a junior lien that extends to
only a portion of the property encumbered by the senior lien.  This
section provides only for allocation of the portion of the award, if
any, that will be available for payment to the junior and senior
lienholders and does not provide for determination of the amount of
such portion.
   (b) As used in this section, "impairment of security" means the
security of the lienholder remaining after the taking, if any, is of
less value in proportion to the remaining indebtedness than the value
of the security before the taking was in proportion to the
indebtedness secured thereby.
   (c) The portion of the award that will be available for payment to
the senior and junior lienholders shall be allocated first to the
senior lien up to the full amount of the indebtedness secured thereby
and the remainder, if any, to the junior lien.
   (d) If the allocation under subdivision (c) would result in an
impairment of the junior lienholder's security, the allocation to the
junior lien shall be adjusted so as to preserve the junior
lienholder's security to the extent that the remaining amount
allocated to the senior lien, if paid to the senior lienholder, would
not result in an impairment of the senior lienholder's security.
   (e) The amounts allocated to the senior and junior liens by this
section are the amounts of indebtedness owing to such senior and
junior lienholders that are secured by their respective liens on the
property taken, and any other indebtedness owing to the senior or
junior lienholders shall not be considered as secured by the property
taken.  If the plaintiff makes the election provided in Section
1265.220, the indebtedness that is deducted from the judgment is the
indebtedness so determined, and the lien shall continue until that
amount of indebtedness is paid.
1265.240.  Where the property acquired for public use is encumbered
by a lien, the amount payable to the lienholder shall not include any
penalty for prepayment.
1265.250.  (a) As used in this section:
   (1) "Fixed lien special assessment" means a nonrecurring
assessment levied on property in a fixed amount by a local public
entity for the capital expenditure for a specific improvement,
whether collectible in a lump sum or in installments.
   (2) "Special annual assessment" means a recurring assessment
levied on property annually in an indeterminate amount by a local
public entity, whether for the capital expenditure for a specific
improvement or for other purposes.
   (b) If property acquired by eminent domain is encumbered by the
lien of a fixed lien special assessment or of a bond representing the
fixed lien special assessment:
   (1) The amount of the lien shall be paid to the lienholder from
the award or withheld from the award for payment pursuant to Section
1265.220.
   (2) Where there is a partial taking of the property, the amount of
the lien prescribed in Section 1265.225 shall be paid to the
lienholder from the award, or at the option of the lienholder the
applicable statutory procedure, if any, for segregation and
apportionment of the lien may be invoked and the amount apportioned
to the part taken shall be paid to the lienholder from the award.
   (c) If property acquired by eminent domain is encumbered by the
lien of a special annual assessment:
   (1) The amount of the lien prorated to, but not including, the
date of apportionment determined pursuant to Section 5082 of the
Revenue and Taxation Code, shall be paid to the lienholder from the
award.  As between the plaintiff and defendant, the plaintiff is
liable for the amount of the lien prorated from and including the
date of apportionment determined pursuant to Section 5082 of the
Revenue and Taxation Code.
   (2) Where there is a partial taking of the property, the amount of
the lien, reduced by the amount for which the plaintiff is liable
pursuant to this paragraph, shall be paid to the lienholder from the
award.  As between the plaintiff and defendant, the plaintiff is
liable for the amount of the lien allocable to the part taken for the
current assessment year, determined to the extent practicable in the
same manner and by the same method as the amount of the assessment
on the property for the current assessment year was determined,
prorated from and including the date of apportionment determined
pursuant to Section 5082 of the Revenue and Taxation Code.