11-9-334. Priority of security interests in fixtures and crops.

Security interest in fixtures under this article. A security interest under this article may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this article in ordinary building materials incorporated into an improvement on land.#

Security interest in fixtures under real property law. This article does not prevent creation of an encumbrance upon fixtures under real property law.#

General rule; subordination of security interest in fixtures. In cases not governed by subsections (d) through (h) of this Code section, a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor.#

Fixtures purchase money priority. Except as otherwise provided in subsection (h) of this Code section, a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property and:#

1. (1)

   The security interest is a purchase money security interest;#

2. (2)

   The interest of the encumbrancer or owner arises before the goods become fixtures; and#

3. (3)

   The security interest is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter.#

Priority of security interest in fixtures over interests in real property. A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if:#

1. (1)

   The debtor has an interest of record in the real property or is in possession of the real property and the security interest:#

   1. (A)

      Is perfected by a fixture filing before the interest of the encumbrancer or owner is of record; and#

   2. (B)

      Has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;#

2. (2)

   Before the goods become fixtures, the security interest is perfected by any method permitted by this article and the fixtures are readily removable:#

   1. (A)

      Factory or office machines;#

   2. (B)

      Equipment that is not primarily used or leased for use in the operation of the real property; or#

   3. (C)

      Replacements of domestic appliances that are consumer goods; or#

3. (3)

   The conflicting interest is a lien on the real property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this article.#

Priority based on consent, disclaimer, or right to remove. A security interest in fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer or owner of the real property if:#

1. (1)

   The encumbrancer or owner has, in a signed record, consented to the security interest or disclaimed an interest in the goods as fixtures; or#

2. (2)

   The debtor has a right to remove the goods as against the encumbrancer or owner.#

Continuation of subsection (f) of this Code section priority. The priority of the security interest under paragraph (2) of subsection (f) of this Code section continues for a reasonable time if the debtor’s right to remove the goods as against the encumbrancer or owner terminates.#

Priority of construction mortgage. A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the land, if a recorded record of the mortgage so indicates. Except as otherwise provided in subsections (e) and (f) of this Code section, a security interest in fixtures is subordinate to a construction mortgage if a record of the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction. A mortgage has this priority to the same extent as a construction mortgage to the extent that it is given to refinance a construction mortgage.#

Priority of security interest in crops. A perfected security interest in or agricultural lien upon crops growing on real property has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property.#