A county records a tax lien against a commercial property for unpaid real estate taxes accrued in 2023. In 2024, the owner mortgages the property to a bank, and in 2025, a judgment creditor records a lien after winning a lawsuit. All three interests are properly recorded. In a forced sale to satisfy debts, what is the correct priority order for lien satisfaction?
Correct Answer
C) Tax lien, mortgage lien, judgment lien
Under general U.S. real property law (reflected in USPAP Advisory Opinion 21 and tested on the AQB exam), ad valorem real property tax liens are superior to all other liens—including mortgages and judgment liens—regardless of recording date. They attach as of the tax assessment date (often January 1 of the tax year) and take priority over subsequently recorded interests. Thus, the 2023 tax lien (attaching as of Jan 1, 2023) has first priority, followed by the 2024 mortgage (recorded second), then the 2025 judgment lien (recorded last). This hierarchy is jurisdictionally uniform for property tax liens on the AQB exam.
Why This Is the Correct Answer
Under general U.S. real property law (reflected in USPAP Advisory Opinion 21 and tested on the AQB exam), ad valorem real property tax liens are superior to all other liens—including mortgages and judgment liens—regardless of recording date. They attach as of the tax assessment date (often January 1 of the tax year) and take priority over subsequently recorded interests. Thus, the 2023 tax lien (attaching as of Jan 1, 2023) has first priority, followed by the 2024 mortgage (recorded second), then the 2025 judgment lien (recorded last). This hierarchy is jurisdictionally uniform for property tax liens on the AQB exam.
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