The order in which different lien claimants get paid if a property is sold to satisfy debts.
Lien priority determines the order in which competing claims against a property are satisfied if the property is sold or foreclosed. Most state statutes give mechanic's liens priority over subsequently recorded mortgages, and some states make all construction liens relate back to the project's commencement date regardless of when they were filed. Priority disputes arise frequently between lenders and lien claimants and are governed by the 'first in time, first in right' principle as modified by applicable lien statutes.
A state's lien statute gives mechanic's liens priority over a construction lender's mortgage if work began before the mortgage was recorded, placing subcontractors ahead of the bank.
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