What Are the Rules that Control Lien Priority in Pennsylvania?

A lien attached to real property can create an issue when the owner of the property wishes to sell the property because liens must be satisfied before, or during, the sale of the property. All liens, however, are not created equally. Liens are paid according to their priority. If you are a creditor who currently has a lien against a property, or who is planning to attach a lien to a property in the Commonwealth of Pennsylvania you may need to know the rules that control lien priority in Pennsylvania.
Whether you are a creditor holding a lien, the owner of property to which liens have been attached, or even a buyer hoping to purchase an encumbered property, you need to know what liens are attached to the property and in what order they must be paid out of the proceeds of any sale. State law decides the priority of liens attached to property within the state. Pennsylvania Consolidated Statutes Section 8141 governs lien priority in Pennsylvania. According to that section, liens against real property shall have priority over each other on the following basis:
1. Purchase money mortgages, from the time they are delivered to the mortgagee, if they are recorded within ten days after their date; otherwise, from the time they are left for record.
2. Other mortgages and defeasible deeds in the nature of mortgages, from the time they are left for record.
3. Verdicts for a specific sum of money, from the time they are recorded by the court.
4. Adverse judgments and other orders, from the time they are rendered.
5. Amicable judgments, from the time the instruments on which they are entered are left for entry.
6. Writs which when issued and indexed by the office of the clerk of the court of common pleas create liens against real property, from the time they are issued.
7. Other instruments which when entered or filed and indexed in the office of the clerk of the court of common pleas create liens against real property, from the time they are left for entry or filing.
Contrary to what many people believe, tax liens – even federal in nature – do not trump a superior lien held by a mortgagor. Though the I.R.S. has the legal authority to foreclose on a home if a federal tax lien remains unpaid, a mortgagor must typically be paid first out of the proceeds of the sale at the end of the foreclosure process.