Escrow & Title
In Minnesota, the order of priority for liens is generally 'first recorded, first in right,' EXCEPT for:
AFirst mortgages
BSpecial assessments and real estate taxes, which have super-priority regardless of recording date✓ Correct
CSecond mortgages
DMechanic's liens
Explanation
Under Minnesota law, special assessments and real estate property taxes have super-priority—they rank ahead of all other liens, including first mortgages, regardless of when they were recorded. This is why mortgage lenders require property taxes to be current at closing and typically require escrow for ongoing tax payments.
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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.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
State-Specific Concepts
Mechanic's Lien
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