Which term describes the priority order in which liens against a property will be settled?

The term that describes the priority order in which liens against a property will be settled is "lien priority." This concept is crucial in real estate and finance, as it determines the sequence in which creditors can claim against the property in the event of foreclosure or liquidation.

When multiple liens exist on a property, they do not have equal standing; rather, they are ranked based on a variety of factors such as the timing of the lien's attachment and the type of lien (e.g., mortgage, tax lien, judgment lien). The first lien recorded typically has the highest priority, followed by subsequent liens, which must wait until the higher-priority liens are satisfied before they can be paid from the proceeds of a sale or foreclosure.

Understanding lien priority is essential for anyone involved in property transactions or financing, as it directly affects the financial risks associated with the investment and the potential recovery of funds in the case of default.