Many states apply relation-back doctrines giving liens priority as of commencement of work or first delivery of materials, regardless of when the lien was recorded. Others apply ordinary recording priority.
Construction lenders obtain title insurance addressing the risk.
Alternative Names:
Construction Lien Priority|Lien Relation Back
Why it Matters?
Relation back to commencement of work means a construction lender recording after visible work began may be subordinate to liens filed months later, which is why lenders inspect for evidence of work before closing and obtain mechanic's lien coverage. Photographic documentation of an undisturbed site at closing is the standard protection. Owners face the same exposure when refinancing during construction.
Frequently Confused with
Related terms
Frequently asked questions
What does relation back mean for lenders?
What is the standard protection?
