N.D. Cent. Code § 41-09-54
(9-334) Priority of security interests in fixtures and crops
Redline — December 1, 2021 → current.View current text →
Current — January 1, 2022
As of December 1, 2021
(1) A security interest under this chapter may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this chapter in ordinary building materials incorporated into an improvement on land.
(1) A security interest under this chapter may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this chapter in ordinary building materials incorporated into an improvement on land.
(2) This chapter does not prevent creation of an encumbrance upon fixtures under real-property law.
(2) This chapter does not prevent creation of an encumbrance upon fixtures under real-property law.
(3) In cases not governed by subsections 4 through 8, 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.
(3) In cases not governed by subsections 4 through 8, 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.
(4) Except as otherwise provided in subsection 8, 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: The security interest is a purchase-money security interest;
(4) Except as otherwise provided in subsection 8, 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: The security interest is a purchase-money security interest;
(5) The interest of the encumbrancer or owner arises before the goods become fixtures; and
(5) The interest of the encumbrancer or owner arises before the goods become fixtures; and
(6) The security interest is perfected by a fixture filing before the goods become fixtures or within twenty days thereafter.
(6) The security interest is perfected by a fixture filing before the goods become fixtures or within twenty days thereafter.
(7) 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 the real property or is in possession of the real property and the security interest: Is perfected by a fixture filing before the interest of the encumbrancer or owner is of record; and
(7) 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 the real property or is in possession of the real property and the security interest: Is perfected by a fixture filing before the interest of the encumbrancer or owner is of record; and
(8) Has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;
(8) Has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;
(9) Before the goods become fixtures, the security interest is perfected by any method permitted by this chapter and the fixtures are readily removable: Factory or office machines;
(9) Before the goods become fixtures, the security interest is perfected by any method permitted by this chapter and the fixtures are readily removable: Factory or office machines;
(10) Equipment that is not primarily used or leased for use in the operation of the real property; or
(10) Equipment that is not primarily used or leased for use in the operation of the real property; or
(11) Replacements of domestic appliances that are consumer goods;
(11) Replacements of domestic appliances that are consumer goods;
(12) 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 chapter; or
(12) 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 chapter; or
(13) The security interest is: Created in a manufactured home in a manufactured-home transaction; and
(13) The security interest is: Created in a manufactured home in a manufactured-home transaction; and
(14) Perfected pursuant to a statute described in subdivision b of subsection 1 of section 41-09-31.
(14) Perfected pursuant to a statute described in subdivision b of subsection 1 of section 41-09-31.
(15) 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: The encumbrancer or owner has, in an authenticated record, consented to the security interest or disclaimed an interest in the goods as fixtures; or
(15) 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: The encumbrancer or owner has, in an authenticated record, consented to the security interest or disclaimed an interest in the goods as fixtures; or
(16) The debtor has a right to remove the goods as against the encumbrancer or owner.
(16) The debtor has a right to remove the goods as against the encumbrancer or owner.
(17) The priority of the security interest under subdivision b of subsection 6 continues for a reasonable time if the debtor’s right to remove the goods as against the encumbrancer or owner terminates.
(17) The priority of the security interest under subdivision b of subsection 6 continues for a reasonable time if the debtor’s right to remove the goods as against the encumbrancer or owner terminates.
(18) 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 5 and 6, 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.
(18) 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 5 and 6, 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.
(19) A perfected security interest in 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.
(19) A perfected security interest in 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.
(20) Subsection 9 prevails over any inconsistent provisions of section 47-16-03.
(20) Subsection 9 prevails over any inconsistent provisions of section 47-16-03.
(21) Priority in Fixtures: Construction Mortgages. The purchase-money priority presents a difficult problem in relation to construction mortgages. The latter ordinarily will have been recorded even before the commencement of delivery of materials to the job, and therefore would take priority over fixture security interests were it not for the purchase-money priority. However, having recorded first, the holder of a construction mortgage reasonably expects to have first priority in the improvement built using the mortgagee’s advances. Subsection (g) expressly gives priority to the construction mortgage recorded before the filing of the purchase-money security interest in fixtures. A refinancing of a construction mortgage has the same priority as the construction mortgage itself. The phrase “an obligation incurred for the construction of an improvement” covers both optional advances and advances pursuant to commitment. Both types of advances have the same priority under subsection (g).
(22) Crops. Growing crops are “goods” in which a security interest may be created and perfected under this Article. In some jurisdictions, a mortgage of real property may cover crops, as well. In the event that crops are encumbered by both a mortgage and an Article 9 security interest, subsection (i) provides that the security interest has priority. States whose real-property law provides otherwise should either amend that law directly or override it by enacting subsection (j).
Official source: North Dakota Legislative Branch. Reproduced from public-domain North Dakota statutes; confirm against the official source for the current text. Not legal advice.