Legal Question in Real Estate Law in California

I'd say that the priority of liens is determined by state law, not the wording of any CC&Rs;, which might have the effect of directing or demanding that a property owner not create or allow any senior liens other than the first mortgage, but in litigation the rights of other potential lienholders will be determined by the recording laws and other statutes respecting real-property liens. I hope frequent contributor attorney Timothy McCormick will give us his opinion; he's a true expert on this kind of thing.

It would depend on the exact terms of the CC&R's. All mortgage liens are subject to covenants that run with the land, easements, etc., that are recorded ahead of the mortgage lien. If the CC&R's are properly worded to be effective to make all HOA liens senior to all but a first deed of trust, I don't see why a second or third DOT would not have been subject to that, just as they would be subject to an easement. CAVEAT: I have not researched this specific issue; as that is beyond the scope of a free question. I am relying on general principals of recording and priority, coupled with similar but not identical issues. For example, in a case where an easement was granted after a deed of trust, foreclosure of the DOT will wipe out the easement, but if a lender forecloses on a DOT recorded after an easement, the easement can be enforced after the foreclosure (both situations I have actually handled and researched). If you want a formal legal opinion you can rely on for sure, however, you will need to show the actual CC&R's to an attorney and have them do a little research on the issue.

"A lien created pursuant to subdivision (b) shall be prior to all other liens recorded subsequent to the notice of assessment, except that the declaration may provide for the subordination thereof

to any other liens and encumbrances." (Civ. Code, sect. 1367, subd. (d).)

The declaration (CC&R's) can make the HOA assessment lien subordinate to subsequently recorded encumbrances, but it cannot make prior encumbrances in favor of third party lenders subordinate to it.