Lien Priority for Commercial Real Estate Loans

Summary

This practice note discusses considerations for lenders and their counsel in establishing lien priority at the outset of a commercial real estate loan and in maintaining the lien priority throughout the term of the loan. A discussion of the role of due diligence, loan documentation, and intercreditor subordination agreements in establishing lien priority of a mortgage or deed of trust is included. This practice note also provides strategies for maintaining the priority of the lender's lien including addressing potential priming liens and the impacts of loan modifications.