(a) All liens, mortgages and encumbrances noted upon a certificate of title take priority according to the order of time in which they are noted thereon by the department. All such liens, mortgages, and encumbrances shall be valid as against the creditors of the owner of a watercraft or outboard motor, whether armed with process or not, and against subsequent purchasers of any such watercraft or outboard motor, or against holders of subsequent liens, mortgages or encumbrances upon such watercraft or outboard motor.
(b) When a lien is discharged, the holder shall note that fact on the face of the certificate of title over his notarized signature. Prior to delivering the certificate to the owner, the holder shall present it to the department for the purpose of having the department note the cancellation of his lien on the face of the certificate of title and upon the titling records of the department.
(c) A security interest is perfected by the delivery to the department of the existing certificate of title, if any, an application for a certificate of title containing the name and address of the lienholder and the date of his security agreement, and the required fee. It is perfected as of the time of its creation if the delivery is completed within twenty days of its creation, otherwise, as of the time of the delivery.