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.
Divided InterestsEncumbrances
Section § 1265.210
This section defines the term 'lien' as any type of security interest in property, such as a mortgage or deed of trust, that can come from various sources like a contract, a law, or even general legal principles like equity.
lien definition mortgage deed of trust
Section § 1265.220
This law section says that when the government takes private property for public use (eminent domain) and the property has a lien (a legal claim by a lender), the amount owed on that lien can be subtracted from the compensation given to the property owner, as long as the debt isn't due yet. However, this deduction can't include certain costs the government might owe the property owner, which are covered under another law starting at Section 1268.410.
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.
eminent domain lien indebtedness
Section § 1265.225
If part of a property that has a lien on it—meaning it's used as collateral for a debt—is taken away (like for public use), the person or entity holding the lien can only get a part of any compensation awarded, enough to keep their security from losing value. The lien will still apply to the remaining part of the property for any debt still owed. However, the lienholder and the property owner can choose to divide the compensation differently if they both agree to it after the legal process has started.
(a)CA Civil Procedure Code § 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)CA Civil Procedure Code § 1265.225(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.
partial taking property encumbrance lienholder rights
Section § 1265.230
This law deals with situations where part of a property with liens (loans secured by property) is taken. If there are junior and senior liens (meaning loans made at different times or under different terms), the money from the sale or compensation should first cover the senior lien. Any remaining money goes to the junior lien. If this allocation weakens the security for the junior lien, they can adjust to protect it as long as the senior lien's security isn't weakened. The law clarifies how to allocate money between lienholders, ensuring each gets what's fair without affecting their right to the property.
(a)CA Civil Procedure Code § 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)CA Civil Procedure Code § 1265.230(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)CA Civil Procedure Code § 1265.230(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)CA Civil Procedure Code § 1265.230(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)CA Civil Procedure Code § 1265.230(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.
partial taking property encumbered senior lien
Section § 1265.240
If the government takes property for public use and it has a lien on it (like a mortgage), the lienholder will be paid, but they won't get any extra fees for paying off the loan early.
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.
public use property acquisition lienholder payment
Section § 1265.250
This section explains what happens to property taxes and assessments when a piece of property is taken by eminent domain. If the property has a one-time special assessment (a fixed fee for improvements) or a recurring annual tax, the amount owed is usually deducted from the compensation given to the property owner. If only part of the property is taken, special rules apply to figure out how to split the lien between the property taken and what remains. When an annual tax is involved, the new owner takes on future tax responsibilities starting from a specific date.
(a)CA Civil Procedure Code § 1265.250(a) As used in this section:
(1)CA Civil Procedure Code § 1265.250(a)(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)CA Civil Procedure Code § 1265.250(a)(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)CA Civil Procedure Code § 1265.250(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)CA Civil Procedure Code § 1265.250(b)(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)CA Civil Procedure Code § 1265.250(b)(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)CA Civil Procedure Code § 1265.250(c) If property acquired by eminent domain is encumbered by the lien
of a special annual assessment:
(1)CA Civil Procedure Code § 1265.250(c)(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)CA Civil Procedure Code § 1265.250(c)(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.
eminent domain fixed lien special assessment special annual assessment
