Which statement about lien priority is accurate?

Which statement about lien priority is accurate?

• A. Tax liens generally have higher priority than most other liens.
• B. Priority is always determined by the recording date.
• C. A mortgage lien always has priority over tax liens.
• D. Priority cannot be predicted.

Answer: (A)

Tax liens generally have higher priority than most other liens because government claims for unpaid taxes are considered senior to private creditors. This means, from the proceeds of a sale or foreclosure, taxes are paid first before private liens like mortgages. The timing of when the tax is assessed often determines its priority, not simply the date a lien was recorded, so a tax lien can outrank a mortgage even if the mortgage was recorded earlier. There are exceptions—some other governmental or special assessment liens can also take strong priority—but the general rule is that tax liens take precedence over most other liens. The other statements aren’t accurate because priority isn’t determined solely by recording date, a mortgage does not always outrank tax liens, and priority can be anticipated in typical scenarios rather than impossibly unpredictable.

Tax liens generally have higher priority than most other liens because government claims for unpaid taxes are considered senior to private creditors. This means, from the proceeds of a sale or foreclosure, taxes are paid first before private liens like mortgages. The timing of when the tax is assessed often determines its priority, not simply the date a lien was recorded, so a tax lien can outrank a mortgage even if the mortgage was recorded earlier. There are exceptions—some other governmental or special assessment liens can also take strong priority—but the general rule is that tax liens take precedence over most other liens. The other statements aren’t accurate because priority isn’t determined solely by recording date, a mortgage does not always outrank tax liens, and priority can be anticipated in typical scenarios rather than impossibly unpredictable.