§20.9 - Priorities

• Jurisdiction: Washington

§20.9PRIORITIES

Lien priorities with respect to mortgaged property are discussed below.

(1) Between the parties

The lien of the mortgage is established between the parties on the date of execution of the mortgage. As between the parties, recording has no effect either on the validity or the priority of the lien absent a bankruptcy.

(2) Mechanics' and materialmen's liens

In regard to third parties the priority of the lien usually is determined, absent actual knowledge, at the time of recording. One exception to this is a mechanics' or materialmen's lien. Under the mechanics' and materialmen's lien statute, Chapter 60.04 RCW, if the requisite notice is given, a lien may be filed 90 days after the cessation of the performance of labor or delivery of materials, but the priority of that lien relates back to the beginning of the performance of labor or the supplying of materials. Hence it is possible for a mechanics' or materialmen's lien to relate back prior to a recorded purchase money mortgage. Purchase money mortgages take priority and prevail over community property rights or a homestead or a judgment obtained and docketed before the purchase money mortgage is executed.

(3) Leases

If the lease exists prior to the mortgage, arguably it cannot be affected by the mortgage. There is no case law in Washington resolving the issue of whether a tenancy is terminated as a result of the destruction of the privity of contract between the former landlord-owner and the tenant following a foreclosure. If the lease comes into being after the mortgage, the lessee has the right to remain on the property throughout the redemption period, but the lessee's interest may be terminated at the end of the redemption period.

Practice

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