2009 California Civil Code - Section 3134-3140 :: Article 6. Priorities

CIVIL CODE
SECTION 3134-3140

3134.  The liens provided for in this chapter (other than with
respect to site improvements) are, subject to the exception in
Section 3138, preferred to any lien, mortgage, deed of trust, or
other encumbrance upon the work of improvement and the site, which
attaches subsequent to the commencement of the work of improvement,
and also to any lien, mortgage, deed of trust, or other encumbrance
of which the claimant had no notice and which was unrecorded at the
time of commencement of the work of improvement.

3135.  If any site improvement is provided for in a separate
contract from any contract with respect to the erection of
residential units or other structures, then the site improvement
shall be considered a separate work of improvement and the
commencement thereof shall not constitute a commencement of the work
of improvement consisting of the erection of any residential unit or
other structure.

3136.  A mortgage or deed of trust which would be prior to the liens
provided for in this chapter to the extent of obligatory advances
made thereunder in accordance with the commitment of the lender shall
also be prior to the liens provided for in this chapter as to any
other advances, secured by such mortgage or deed of trust, which are
used in payment of any claim of lien which is recorded at the date or
dates of such other advances and thereafter in payment of costs of
the work of improvement. Such priority shall not, however, exceed the
original obligatory commitment of the lender as shown in such
mortgage or deed of trust.

3137.  The liens provided for in Section 3112 with respect to site
improvements are, subject to the exception in Section 3139, preferred
to (a) any mortgage, deed of trust, or other encumbrance which
attaches subsequent to the commencement of the site improvement work;
and (b) any mortgage, deed of trust, or other encumbrance of which
the claimant had no notice and which was unrecorded at the time of
the commencement of such site improvement; and (c) any mortgage, deed
of trust, or other encumbrance recorded before the commencement of
the site improvement work which was given for the sole or primary
purpose of financing such site improvements, unless the loan proceeds
are, in good faith, placed in the control of the lender under a
binding agreement with the borrower to the effect that such proceeds
are to be applied to the payment of claims of claimants and that no
portion of such proceeds will be paid to the borrower in the absence
of satisfactory evidence that all such claims have been paid or that
the time for recording claims of liens has expired and no such claims
have been recorded.

3138.  If the holder of any mortgage or deed of trust which is
subordinate pursuant to Section 3134 to any lien, shall procure a
payment bond as defined in Section 3096 in an amount not less than 75
percent of the principal amount of such mortgage or deed of trust,
which bond refers to such mortgage or deed of trust, and shall record
such payment bond in the office of the county recorder in the county
where the site is located, then such mortgage or deed of trust shall
be preferred to all liens for labor, services, equipment, or
materials furnished after such recording.

3139.  If the owner of the land or holder of any mortgage or deed of
trust, which is subordinate pursuant to Section 3137 to any lien,
shall procure a payment bond in an amount not less than 50 percent of
the principal amount of such mortgage or deed of trust and shall
record such payment bond in the office of the county recorder in the
county where the site is located before completion of the work of
improvement, then such mortgage or deed of trust shall be preferred
to all such liens provided in Section 3112.

3140.  Any original contractor or subcontractor shall be entitled to
recover, upon a claim of lien recorded by him, only such amount as
may be due him according to the terms of his contract after deducting
all claims of other claimants for labor, services, equipment, or
materials furnished and embraced within his contract.


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