78 (1) Except as provided in this section, the liens arising from an improvement have priority over all conveyances, mortgages or other agreements affecting the owner’s interest in the premises.  R.S.O. 1990, c. C.30, s. 78 (1); 2017, c. 24, s. 70. Building mortgage (2) Where a mortgagee takes a mortgage with the intention to secure the financing of an improvement, the liens arising from the improvement have priority over that mortgage, and any mortgage taken out to repay that mortgage, to the extent of any deficiency in the holdbacks required to be retained by the owner under Part IV, irrespective of when that mortgage, or the mortgage taken out to repay it, is registered.  R.S.O. 1990, c. C.30, s. 78 (2). Prior mortgages, prior advances (3) Subject to subsection (2), and without limiting the effect of subsection (4), all conveyances, mortgages or other agreements affecting the owner’s interest in the premises that were registered prior to the time when the first lien arose in respect of an improvement have priority over the liens arising from the improvement to the extent of the lesser of, (a)  the actual value of the premises at the time when the first lien arose; and (b)  the total of all amounts that prior to that time were, (i)  advanced in the case of a mortgage, and (ii)  advanced or secured in the case of a conveyance or other agreement.  R.S.O. 1990, c. C.30, s. 78 (3); 2017, c. 24, s. 70, 71. Prior mortgages, subsequent advances (4) Subject to subsection (2), a conveyance, mortgage or other agreement affecting the owner’s interest in the premises that was registered prior to the time when the first lien arose in respect of an improvement, has priority, in addition to the priority to which it is entitled under subsection (3), over the liens arising from the improvement, to the extent of any advance made in respect of that conveyance, mortgage or other agreement after the time when the first lien arose, unless, (a)  at the time when the advance was made, there was a preserved or perfected lien against the premises; or (b)  prior to the time when the advance was made, the person making the advance had received written notice of a lien.  R.S.O. 1990, c. C.30, s. 78 (4); 2017, c. 24, s. 53 (1), 70. Special priority against subsequent mortgages (5) Where a mortgage affecting the owner’s interest in the premises is registered after the time when the first lien arose in respect of an improvement, the liens arising from the improvement have priority over the mortgage to the extent of any deficiency in the holdbacks required to be retained by the owner under Part IV.  R.S.O. 1990, c. C.30, s. 78 (5); 2017, c. 24, s. 70. General priority against subsequent mortgages (6) Subject to subsections (2) and (5), a conveyance, mortgage or other agreement affecting the owner’s interest in the premises that is registered after the time when the first lien arose in respect to the improvement, has priority over the liens arising from the improvement to the extent of any advance made in respect of that conveyance, mortgage or other agreement, unless, (a)  at the time when the advance was made, there was a preserved or perfected lien against the premises; or (b)  prior to the time when the advance was made, the person making the advance had received written notice of a lien.  R.S.O. 1990, c. C.30, s. 78 (6); 2017, c. 24, s. 53 (1), 70. Advances to trustee under Part IX (7) Despite anything in this Act, where an amount is advanced to a trustee appointed under Part IX as a result of the exercise of any powers conferred upon the trustee under that Part, (a)  the interest in the premises acquired by the person making the advance takes priority, to the extent of the advance, over every lien existing at the date of the trustee’s appointment; and (b)  the amount received is not subject to any lien existing at the date of the trustee’s appointment.  R.S.O. 1990, c. C.30, s. 78 (7); 2017, c. 24, s. 70. Where postponement (8) Despite subsections (4) and (6), where a preserved or perfected lien is postponed in favour of the interest of some other person in the premises, that person shall enjoy priority in accordance with the postponement over, (a)  the postponed lien; and (b)  where an advance is made, any unpreserved lien in respect of which no written notice has been received by the person in whose favour the postponement is made at the time of the advance, but nothing in this subsection affects the priority of the liens under subsections (2) and (5).  R.S.O. 1990, c. C.30, s. 78 (8); 2017, c. 24, s. 70. Saving (9) Subsections (2) and (5) do not apply in respect of a mortgage that was registered prior to the 2nd day of April, 1983.  R.S.O. 1990, c. C.30, s. 78 (9). Financial guarantee bond (10) A purchaser who takes title from a mortgagee takes title to the premises free of the priority of the liens created by subsections (2) and (5) where, (a)  a bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance; or (b)  a letter of credit or a guarantee from a bank listed in Schedule I or II to the Bank Act (Canada), in the prescribed form is registered on the title to the premises, and, upon registration, the security of the bond, letter of credit or the guarantee takes the place of the priority created by those subsections, and persons who have proved liens have a right of action against the surety on the bond or guarantee or the issuer of the letter of credit.  R.S.O. 1990, c. C.30, s. 78 (10); 1997, c. 19, s. 30; 2017, c. 24, s. 53 (2), 70. Home buyer’s mortgage (11) Subsections (2) and (5) do not apply to a mortgage given or assumed by a home buyer.  R.S.O. 1990, c. C.30, s. 78 (11). Section Amendments with date in force (d/m/y) 1997, c. 19, s. 30 - 10/10/1997 2017, c. 24, s. 53 (1, 2), 70, 71 - 12/12/2017