Escrow & Title
Priority of liens in Tennessee is generally determined by:
AThe dollar amount of the lien — larger liens have higher priority
BThe date and time of recording, with earlier recordings having higher priority✓ Correct
CThe type of lien — mortgage liens always have priority over tax liens
DThe lender's decision at the time of origination
Explanation
Lien priority in Tennessee generally follows the 'first in time, first in right' principle — the lien recorded earliest in the public records has highest priority. Exceptions include property tax liens, which typically have super-priority over other liens.
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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.
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