In the District of Columbia, a Subordination of Lien is a legal arrangement that allows one creditor to agree to have their lien or security interest on a property placed in a lower priority position compared to another creditor. Typically, this arrangement occurs in the context of a Deed of Trust or Mortgage. A Subordination of Lien is useful in situations where multiple parties hold liens on a property and need to establish a hierarchy of priority. By subordinating their lien, a creditor agrees to give the higher-ranking creditor a preferential claim to the property's proceeds in the event of foreclosure or sale. This hierarchy determines the order in which the creditors are repaid. However, it is important to note that there are different types of Subordination of Liens in the District of Columbia: 1. First Lien Subordination: This occurs when the holder of a first lien (the primary creditor) agrees to subordinate their lien to another creditor who is seeking a higher priority position. The first lien holder is effectively accepting a secondary position, allowing the second lien holder to have a superior claim to the property's value. 2. Second Lien Subordination: This happens when the owner of a second lien agrees to subordinate their lien to another creditor who holds a lien in a superior position. By doing so, the second lien holder acknowledges that their claim is of lower priority and will be paid only after the higher-ranking lien holders are satisfied. 3. Partial Subordination: This type of subordination occurs when a creditor agrees to subordinate their lien partially, granting a higher priority position only to a specific portion of the loan. This arrangement can be useful in situations where refinancing or obtaining additional financing is necessary while maintaining the existing lien's priority on a part of the property's value. Subordination of Liens in the District of Columbia requires a written agreement between the parties involved, typically drafted by an attorney. The agreement must be properly executed and recorded with the District of Columbia Recorder of Deeds to be legally enforceable. Additionally, it is crucial to consult with legal professionals to ensure all relevant laws and regulations specific to the District of Columbia are followed when entering into a Subordination of Lien agreement. By understanding and utilizing Subordination of Liens, creditors and property owners in the District of Columbia can navigate complex financial arrangements while defining a clear hierarchy of lien priorities.
District of Columbia Subordination of Lien (Deed of Trust/Mortgage)
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FAQ
A subordination clause is a clause in an agreement that states that the current claim on any debts will take priority over any other claims formed in other agreements made in the future.
Deeds of trust are the most common instrument used in the financing of real estate purchases in Alaska, Arizona, California, Colorado, the District of Columbia, Idaho, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, North Carolina, Oregon, Tennessee, Texas, Utah, Virginia, Washington, and West Virginia, ...
There's only one office where mechanics liens can be recorded. This is the Office of the Recorder of Deeds- Land Records Division. Before you go down to the office, or otherwise send out your claim, you should contact the office ahead of time to ensure that you have all the required documents and filing fees.
A Security Affidavit is required on all Residential Deeds of Trust and Modifications. All Judgments, Orders, etc. must be certified by the DC Superior Court. All notarized documents must include the notary seal (if applicable), signature, name and expiration date.
Yes, a lien may be placed on property that is jointly owned. However, the effects of that lien depend on the type of ownership that the property is under.
Notice. (a)(1) A contractor desiring to enforce the lien shall record in the land records a notice of intent that identifies the property subject to the lien and states the amount due or to become due to the contractor.
You must file the lien foreclosure action in a court that has jurisdiction over the property where you supplied materials or work. You will likely need to consult an attorney to file a foreclosure action. Such actions are expensive and time-intensive so make every effort to settle the matter first!
If you are filing on your own, it may cost you between $3 to $345. You can also use a lien filing service such as Northwest Lien which only requires you to pay a flat fee.
