Escrow & TitleIntermediateArizona Exam

In Arizona, a property tax lien has 'super-priority' over other liens because:

AIt was created by state statute and is given priority over all other lien types, including first mortgagesCorrect

BIt has priority only over junior judgment liens and mechanic's liens recorded after the assessment was due, but is expressly subordinate to any recorded first or second mortgage

CIts lien priority is determined by the recording date of the HOA's CC&Rs relative to other recorded encumbrances, with no special priority over mortgages recorded before the CC&Rs

DSuper-priority status applies exclusively to federal tax liens, which by federal statute take priority over all state-created liens including HOA assessment liens and first mortgages

Why It was created by state statute and is given priority over all other lien types, including first mortgages Is Correct

Answer A: It was created by state statute and is given priority over all other lien types, including first mortgages

Arizona property tax liens have super-priority by statute—they are superior to all other liens on the property, including first mortgages recorded earlier. This is why lenders require property tax impound accounts to ensure taxes are paid.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Encumbrance

Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.

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.

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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.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Easement

A non-possessory right to use another person's land for a specific purpose.

Encumbrance

Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.

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