When will a Mechanics’ Lien Claimant be Paid in Full Before the Mortgage or Deed of Trust Holder? (The “Relation Back” Doctrine)
The usual rule in California is that the first to file documents of record with the County Recorder impacting on title to property have priority over later filed documents. This general rule allows, among other things, lenders to view the title to property before granting a loan on the property. The lender can then see if there are existing encumbrances on the property in question. Unfortunately for lenders, this practice does not always work in the case of mechanics’ liens.