Liens and lien priority

A claim against property

A lien is a claim against property that secures payment of an obligation. It is an encumbrance, not ownership or a right to occupy. An easement is also an encumbrance, but it authorizes a use rather than securing a debt.

Classify on two axes

A voluntary lien arises by agreement, such as a mortgage or deed of trust securing a loan. An involuntary lien arises through law, such as a property tax lien, a perfected mechanic's lien for qualifying unpaid construction work, or a properly established judgment lien. Specific liens burden identified property: a mortgage, a property tax lien on a parcel, and a mechanic's lien on the improved property are examples. A general lien reaches the debtor's property within its legally defined scope; a judgment lien is the usual exam example. General does not mean that exempt property becomes available to creditors.

Rank before distributing

Priority determines which competing claims are paid first from available proceeds. Start with the usual first-in-time rule, often evaluated through recording, then check statutory priority and agreements changing rank. Property tax liens commonly outrank earlier mortgages. A subordination agreement moves the consenting lienholder behind another claim; it does not release the debt. A release removes the lien rather than moving its position.

If $150,000 is available for lienholders after expenses and superior claims, a $120,000 senior mortgage receives $120,000 and a $50,000 junior mortgage receives $30,000. No funds remain for the owner. The junior claim has a $20,000 unpaid balance; personal liability is a separate question.

Recognize exceptions

Actual priority and enforcement depend on governing law, perfection, exemptions, and the instruments involved. Texas illustrates why recording order is a starting point rather than a complete answer. Texas Tax Code section 32.05 gives chapter 32 property tax liens priority over earlier mortgage and association liens, subject to stated exceptions. Section 32.04 gives these Texas tax liens equal priority among themselves and defers to federal law for competing federal tax liens.

For Texas construction liens governed by Property Code section 53.124(a) and (b), inception generally relates to visible commencement of construction or visible delivery of materials. Section 53.124(e) supplies exceptions. Section 53.122 generally places perfected mechanic's liens on equal footing, subject to its exceptions, with proportionate distribution when funds are insufficient. Do not rank all construction claims by affidavit filing date or assume every mechanic's lien defeats an earlier mortgage.