Seller’s Agreement To Subordinate Its Security Interest To That Of The Bank’s Unenforceable.

The court’s first paragraph says it all: “This case involves competing claims of lien priority between the seller of real property, which took back a security interest on property sold to a developer, and the bank which financed development of the project through a construction loan. The issue is whether the seller’s agreement to subordinate its security interest to that of the bank is enforceable where the developer and the bank entered into a side agreement between themselves, to which the seller did not consent, about which it knew nothing, and which substantially impaired its security. We conclude that it is not. Gluskin v. Atlantic Savings and Loan Assn. (1973) 32 Cal.App.3d 307, 314, [108 Cal.Rptr. 318, 323-324].) The trial court so held. We shall affirm.” Citizens Business Bank v. Gevorgian, as Trustee  (Cal. App. Second Dist., Div. 4; August 1, 2013) 218 Cal.App.4th 602, [160 Cal.Rptr.3d 49].