(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.
§ 1265.230.Partial Taking of Property Encumbered By Lien and Portion of Property Taken Encumbered By Junior Lien
Title 7. Eminent Domain Law · Chapter 10. Divided Interests · Article 3. Encumbrances · Enacted 1975 · no amendments on record · Last verified July 29, 2026
In one sentenceSection 1265.230 sets the allocation order between senior and junior lienholders when a partial taking's award has to be divided between them, paying the senior lien in full first and the remainder to the junior lien, unless that order would impair the junior lienholder's security.
Full Text of § 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) 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) 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) 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.
Plain-English Summary
This section applies to a specific layered situation: a partial taking of property carrying both a senior lien and a junior lien, where the junior lien covers only a portion of the property the senior lien also covers. It does not decide how much award money is available for the lienholders in total -- that is worked out separately -- it only allocates whatever portion is available between them.
Subdivision (b) defines "impairment of security" as a comparison of ratios: whether the lienholder's remaining security, relative to the remaining debt, is worth proportionally less after the taking than it was before, relative to the debt it secured. The default order in subdivision (c) pays the senior lien first, up to the full amount owed, with anything left over going to the junior lien. But subdivision (d) adjusts that default if paying the senior lien in full would impair the junior lienholder's security -- in that case, the allocation to the junior lien is adjusted so the senior lienholder gets only what it can receive without impairing the junior lien.
Subdivision (e) also narrows what "secured" means for this purpose: the amounts allocated to each lien are limited to debt secured by the property taken, and if the plaintiff elects under § 1265.220 to deduct a not-yet-due debt from the judgment, it is that specifically determined amount -- not whatever the loan balance happens to be -- that continues as the lien.
Frequently Asked Questions
What situation does this section specifically address?
A partial taking where a junior lien covers only part of the property also covered by a senior lien.
In what order do senior and junior liens get paid from the available award?
The senior lien first, up to the full debt it secures, then the remainder to the junior lien -- unless that would impair the junior lienholder's security.
What does 'impairment of security' mean here?
That the lienholder's remaining security is worth proportionally less relative to the remaining debt than it was, relative to the debt, before the taking.
Amendment History
Added by Stats. 1975, Ch. 1275.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 29, 2026.
· Official source
Also known as: senior junior lien allocation eminent domain californiaimpairment of security definition condemnation california