36 Security Interests In Fixtures

• 36 (1) In this section, “secured party” includes a receiver.
• (2) This section applies to land for which a certificate of title has been issued under the Land Title Act and to prescribed land or classes of land.
• (3) Except as provided in this section and in section 30, a security interest in goods that attaches before or at the time the goods become fixtures has priority with respect to the goods over a claim to the goods made by a person with an interest in the land.
• (4) A security interest referred to in subsection (3) is subordinate to the interest of

• (a) a person who acquires for value an interest in the land after the goods become fixtures including an assignee for value of the interest of a person with an interest in the land at the time the goods become fixtures, and
• (b) any person with a registered mortgage on the land who
  • (i) makes an advance under the mortgage after the goods become fixtures, but only with respect to the advance, or
  • (ii) obtains an order for sale or foreclosure after the goods become fixtures

• without fraud and before the notice of the security interest is filed in accordance with section 49.
• (5) A security interest in goods that attaches after the goods become fixtures is subordinate to the interest of a person who

• (a) has an interest in the land at the time the goods become fixtures and who
  • (i) has not consented to the security interest,
  • (ii) has not disclaimed an interest in the goods or fixtures,
  • (iii) has not entered into an agreement under which a person is entitled to remove the goods, or
  • (iv) is not otherwise precluded from preventing the debtor from removing the goods, or
• (b) acquires an interest in the land after the goods become fixtures if the interest is acquired without fraud and before the notice of the security interest in the goods is filed in accordance with section 49.

• (6) A security interest referred to in subsection (3) or (5) is subordinate to the interest of a creditor of the debtor who caused to be registered under the Court Order Enforcement Act a judgment in the appropriate land title office affecting the land, after the goods become fixtures, and before the notice of the security interest is filed in accordance with section 49.
• (7) The interest of a creditor referred to in subsection (6) does not take priority over a purchase money security interest in goods a notice of which is filed in accordance with section 49 not later than 15 days after the goods are affixed to the land.
• (8) A secured party who, under this Act, has the right to remove goods from land must exercise this right of removal in a manner that causes no greater damage or injury to the land and to other property located on it or that puts the occupier of the land to no greater inconvenience than is necessarily incidental to the removal of the goods.
• (9) A person, other than the debtor, who has an interest in the land at the time the goods that are subject to the security interest become fixtures is entitled to reimbursement for any damages to that interest in the land caused during the removal of the goods, but is not entitled to reimbursement for diminution in the value of the land caused by the absence of the goods removed or by the necessity of replacement.
• (10) The person entitled to reimbursement under subsection (9) may refuse permission to remove the goods until the secured party has given adequate security for reimbursement.
• (11) The secured party may apply to a court for one or more of the following orders:

• (a) determining the person entitled to reimbursement under this section;
• (b) determining the amount and kind of security to be provided by the secured party;
• (c) designating the depository for the security;
• (d) authorizing the removal of the goods without the provision of security for reimbursement under subsection (10).

• (12) A person having an interest in the land that is subordinate to a security interest under this section may, before the goods have been removed from the land by the secured party, retain the goods on payment to the secured party of the lesser of the following:

• (a) the amount secured by the security interest having priority over the interest;
• (b) the market value of the goods if the goods were removed from the land.

• (13) The secured party who has a right to remove the goods from the land must give to each person, who appears by the records of the land title office to have an interest in the land, a notice of the intention of the secured party to remove the goods and the notice must contain

• (a) the name and address of the secured party,
• (b) a description of the goods to be removed,
• (c) the amount required to satisfy the obligation secured by the security interest,
• (d) the market value of the goods,
• (e) a description of the land to which the goods are affixed, and
• (f) a statement of intention to remove the goods unless the amount referred to in subsection (12) is paid on or before a specified date that is not less than 15 days after the notice is given in accordance with subsection (14).

• (14) A notice referred to in subsection (13) must be given at least 15 days before removal of the goods and may be given in accordance with section 72 or by registered mail addressed to the address of the person to be notified as it appears in the records of the land title office.
• (15) A person entitled to receive a notice under subsection (14) may apply to a court for an order postponing removal of the goods from the land.

1989-36-36; 1990-11-10.