Florida Broker Practice Exam

The priority of junior liens is based on what principle?

1. Property owner's income

2. Sales price of the property

3. Recording date with the clerk of the circuit court

4. Debt amount

The correct answer is: Recording date with the clerk of the circuit court

The priority of junior liens is determined by the principle of the recording date with the clerk of the circuit court. When multiple liens are placed on a property, they are ranked based on the order in which they are recorded. The first lien to be recorded typically takes priority over any subsequent liens, regardless of the amounts owed or the nature of the debts. This system of prioritization is essential for ensuring clarity and fairness in the case of foreclosure or the sale of a property. If a property is sold or foreclosed, the proceeds from that sale will be used first to satisfy the senior liens, and anything remaining will then go to the junior liens in the order they were recorded. Therefore, understanding how recording dates impact lien priority is critical for anyone involved in real estate transactions or financing.