Florida Broker Practice Exam

Which lien is most likely to have priority over others if not subordinated?

1. Vendor's lien

2. Income tax lien

3. Judgment lien

4. Mortgage lien

The correct answer is: Mortgage lien

A mortgage lien is most likely to have priority over other types of liens when not subordinated. This is because mortgage liens are typically considered first in the hierarchy of claims against a property. They are attached to the property to secure the loan provided for its purchase. When a property is sold, the mortgage must be paid off first in most cases, allowing the lender to recover their loan before other creditors. Vendor's liens come into play when a seller finances the purchase of a property and retain a lien on it as security for the seller’s loan. This type of lien can be subordinate to a mortgage because it often arises after the mortgage is established. An income tax lien can have priority over certain other kinds of liens, but it does not always take precedence over a properly recorded mortgage. A judgment lien arises from a court ruling and typically ranks lower than mortgage liens, which are established as part of the property financing process. Therefore, a mortgage lien is typically the first claim against property in case of foreclosure or sale, making it the most likely to have priority over other liens when not subordinated.