Property OwnershipIntermediateDelaware Exam

What is 'property tax lien' and why does it have super-priority in Delaware?

AProperty tax liens only apply to commercial properties

BProperty tax liens take priority over virtually all other liens, including first mortgages, because state and local governments grant this priority to ensure tax collectionCorrect

CProperty tax liens are junior to all mortgage liens

DProperty tax liens are only ever collected through a formal civil lawsuit process, and never through any other means, which is broadly consistent with standard practice statewide

Why Property tax liens take priority over virtually all other liens, including first mortgages, because state and local governments grant this priority to ensure tax collection Is Correct

Answer B: Property tax liens take priority over virtually all other liens, including first mortgages, because state and local governments grant this priority to ensure tax collection

Property tax liens in Delaware have super-priority, meaning they are paid before all other liens (including first mortgages) in a foreclosure sale. This ensures government tax revenue is protected and is one reason lenders maintain tax escrow accounts.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

Key Property Ownership Terms in This Question

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.

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

People Also Study

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.

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

Transfer Tax

A tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.

Short Sale

A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.

Study This Topic

Property Ownership Guide

Practice More Delaware Real Estate Questions

1,500+ questions covering all exam topics. Start free — no signup required.

Take the Free Delaware Quiz →