National Real Estate Exam (PSI)Property OwnershipHard
A contractor begins construction work on a home addition on March 1. The homeowner obtains a new mortgage that is recorded on March 15. After a payment dispute, the contractor records a mechanic's lien on June 1. Which lien has priority?
- ABoth liens share equal priority and are paid on a pro-rata basis
- BThe mechanic's lien, because its priority relates back to the date work began
- CThe mortgage, because it was recorded before the mechanic's lien
- DThe mortgage automatically holds superpriority over all mechanic's liens
Show answer & explanationAnswer & explanation
Correct answer: B. The mechanic's lien, because its priority relates back to the date work began
In most jurisdictions, a mechanic's lien's priority relates back to the date labor or materials first began on the project, not the date the lien was actually recorded. Since work began March 1, before the mortgage was recorded March 15, the mechanic's lien takes priority over the later-recorded mortgage.
Why the other options are wrong
- A. Incorrect — priority is determined by relation-back date, not pro-rata sharing.
- C. Incorrect — recording date of the mortgage is irrelevant here because the lien relates back to the start of work.
- D. Incorrect — mortgages do not have automatic superpriority over mechanic's liens; only certain liens like property tax liens typically have superpriority.
Mechanic's Lien Priority
A lien filed by a contractor or supplier for unpaid work or materials, whose priority typically relates back to the date the work or delivery of materials first began, not the recording date.
- Priority date = start of work/materials, not filing date
- Can outrank mortgages recorded after work began
- Property tax liens still generally hold superpriority over mechanic's liens
Memory trick: Mechanic's lien time-travels back to the first swing of the hammer.