What defines a superior lien?

A superior lien is defined as a lien that has a higher priority over other liens. This means that in the event of a foreclosure or liquidation of a property, a superior lien must be satisfied before junior liens receive any payment.

For instance, if a property has multiple liens placed on it, such as a mortgage and a home equity line of credit, the mortgage is typically a superior lien because it was established first and generally has first claim on the property. This priority ensures that in the event of a sale due to default, the superior lien holder is compensated before any other creditors. Understanding the hierarchy of liens is crucial in real estate transactions, particularly when assessing risks associated with property investments and potential recovery of owed debts.

The other options do not correctly define a superior lien, but rather describe characteristics or situations that do not relate to priority status.