Escrow & Title
A subordination agreement in a Kentucky real estate transaction causes a senior lien to:
AMove ahead of a junior lien
BMove behind a junior lien that becomes senior✓ Correct
CBe eliminated upon refinancing
DTransfer from the seller to the buyer
Explanation
A subordination agreement allows a lien to be voluntarily moved to a lower priority position, enabling a junior lien to take priority over the subordinated lien.
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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.
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.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
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