Video Transcript:
So what is the order of priority for liens or other claims on real estate? This is Dave at AFX Title; Certified Title Abstractors. The order of priority or claims against a property is typically done by a number of factors that's set out by statutes in that state or county. The most prevalent in almost every county is what's called a Race Notice factor -meaning that the priority is determined by chronologically who gets their recording done first. If you have a lien against a property and it's recorded on a certain date, leans that come after that or mortgages that come after that have secondary priority. There are exceptions to that rule in that certain types of liens have automatic priority by statute. For example, most government liens have some type of priority. So if a tax bill is not paid on a piece of real estate, that tax bill has first priority on claims against a property. In addition to that, some other types of liens such as mechanics liens, child support liens, may have other priority in that they can't get wiped out by a foreclosure or maybe wiped out by a change of property ownership. So in general, you'll find that race notice factor kicks in so that an earlier recording has a priority over later recording. That's why it's called a race notice. Literally, it's a race to the courthouse. Whoever gets there first gets their lien recorded first. In many cases, we've seen where two mortgages are done at the same time; a first mortgage and a second mortgage on a purchase of real estate. And if by accident, who is recording those two documents, records the second mortgage first -and even though the other one came two seconds later -that second mortgage accidentally became the first mortgage on the property. So you got to be careful how you do your recordings. If you do have questions about running research on real estate records, you can reach us at our website at title search dot com.