Escrow & Title
In South Dakota, when both a mortgage and a judgment lien exist on a property, which has priority if the mortgage was recorded first?
AThe judgment lien always has priority
BThe mortgage has priority because it was recorded first (first in time, first in right)✓ Correct
CThey share equal priority
DThe SDREC determines priority in contested cases
Explanation
Under South Dakota's recording laws, priority among liens is generally determined by recording date — the first to record has superior priority (first in time, first in right), with exceptions for property taxes.
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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.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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
DRE Regulation
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