Nature of rights; subordination of interests

(a) Nature.--Any person, including a person that owns an interest in the real property, or an agency may be a holder. An environmental covenant may identify more than one holder. The interest of a holder is an interest in real property. (b) Rights of agency.--The rights of an agency under this chapter or under an approved environmental covenant, other than as a holder, are not interests in real property. (c) Obligations.--An agency is bound by any obligation it assumes in an environmental covenant, but an agency does not assume obligations merely by signing an environmental covenant. Any person other than an agency that signs an environmental covenant is bound by the obligations the person assumes in the covenant, but signing the covenant does not change obligations, rights or protections granted or imposed under law other than this chapter except as provided in the environmental covenant. (d) Rules.--The following rules apply to interests in real property in existence at the time an environmental covenant is created or amended: (1) An interest which has priority under law other than this chapter is not affected by an environmental covenant unless the owner of the interest subordinates its interest to the covenant. (2) As a condition to approval of an environmental covenant an agency may require that an owner of a prior interest subordinate that interest to the environmental covenant. (3) A subordination agreement may be contained in an environmental covenant covering real property or in a separate record. If the environmental covenant covers commonly owned property in a common interest community, the agreement or record may be signed by any person authorized by the governing board of the owners association. (4) An agreement by a person to subordinate a prior interest to an environmental covenant affects the priority of that person's interest but does not by itself impose an affirmative obligation on the person with respect to the environmental covenant nor affect that person's existing environmental liability.