Escrow & Title
In Alaska, when multiple liens exist on a property and it is sold at foreclosure, which general priority rule applies?
AThe largest lien is paid first
BPriority is typically determined by the order of recording (first to record has first priority), with certain exceptions✓ Correct
CGovernment tax liens are always last in priority
DVoluntary liens (mortgages) always have priority over involuntary liens
Explanation
Generally, priority among liens is determined by the order of recording — earlier recorded liens have priority over later recorded ones. However, important exceptions exist: property tax liens have super-priority regardless of recording date, and some statutory liens (like mechanics' liens) have special priority rules.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
EasementA non-possessory right to use another person's land for a specific purpose.
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