                                 CODE OF VIRGINIA

PRIORITY OF SECURITY INTERESTS IN FIXTURES AND CROPS (§ 8.9A-334)

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

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

c. General rule; subordination of security interest in fixtures. In cases not
governed by subsections (d) through (h), 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.

d. Fixtures purchase-money priority. Except as otherwise provided in subsection
(h), 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. the security interest is a purchase-money security interest;

   2. the interest of the encumbrancer or owner arises before the goods become
   fixtures; and

   3. the security interest is perfected by a fixture filing before the goods
   become fixtures or within twenty days thereafter.

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

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

B. has priority over any conflicting interest of a predecessor in title of the
encumbrancer or owner;

   2. before the goods become fixtures, the security interest is perfected by any
   method permitted by this title and the fixtures are readily removable:

A. factory or office machines;

B. equipment that is not primarily used or leased for use in the operation of
the real property; or

C. replacements of domestic appliances that are consumer goods;

   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 title; or

   4. the security interest is:

A. created in a manufactured home in a manufactured-home transaction; and

B. perfected pursuant to a statute described in &#xA7; 8.9A-311 (a) (2).

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

g. Continuation of subdivision (f) (2) priority. The priority of the security
interest under subdivision (f) (2) continues for a reasonable time if the
debtor&#8217;s right to remove the goods as against the encumbrancer or owner
terminates.

h. 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), 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.

i. Priority of security interest in crops. 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.

j. Subsection (i) prevails. Subsection (i) prevails over any inconsistent
provisions of the following statutes.

HISTORY: 1964, c. 219, § 8.9-313; 1973, c. 509; 1983, c. 204; 2000, c. 1007;
2024, c. 652.