What is the priority of liens if a construction company records a mechanic's lien after a homeowner sells her house?

In the context of real estate and how liens are prioritized, a mechanic's lien is typically established to secure a contractor's payment for work performed on a property. This lien is generally given priority based on when it was recorded, relative to other liens.

When the construction company records a mechanic's lien after the homeowner has sold the house, the situation becomes a bit nuanced because the sale of the property affects existing liens. Generally, any liens that were in existence prior to the property being sold would retain their priority over subsequent liens.

In this scenario, the correct answer states that the construction company takes priority first. This is due to the timely recording of the mechanic's lien and its nature, which can sometimes maintain priority over other loans, especially if it’s recorded shortly after the work was completed. Following this, CPB (the first bank involved) has priority second because it likely holds the first mortgage on the property, which typically gains first position ahead of other debts. The Bank of Hawaii follows in third position.

This hierarchy reflects common practices in lien priority, where a mechanic's lien can protect the interests of the contractor while still respecting the established order of other secured debt obligations, particularly when they relate to the property prior to its sale. Therefore