In Nevada, special lien priority refers to the order in which various types of liens against a property are paid off in the event of a foreclosure or sale. Understanding lien priority is crucial for determining which creditors will be satisfied first from the proceeds of a sale. Here's an overview of special lien priorities in Nevada:

1. Property Taxes and Special Assessments

• Priority: Property tax liens and special assessments generally have the highest priority. These liens are paid before most other types of liens.
• Reason: Property taxes are considered a first lien on the property, meaning they must be settled before any other claims.

2. Mechanic's Liens

• Priority: Mechanic's liens, which are claims for unpaid work or materials provided to improve the property, have priority over liens that were recorded after the work began.
• Reason: These liens are often given priority to ensure that contractors and suppliers are paid for their contributions to improving the property.

3. Mortgage Liens

• Priority: Mortgage liens are typically recorded in the order they are established. The lien recorded first has priority over those recorded later.
• Reason: Mortgage lenders hold liens based on the chronological order of their recording. A first mortgage lien will be paid before a second mortgage lien.

4. Judgment Liens

• Priority: Judgment liens, which result from court judgments, have lower priority compared to property taxes and mechanic's liens. They are usually paid after these higher-priority claims.
• Reason: Judgment liens are considered general liens and are often lower in priority than specific liens like those for property taxes and mechanics.

5. Homeowners' Association (HOA) Liens

• Priority: In Nevada, HOA liens for unpaid assessments may have a specific priority over mortgage liens under certain conditions, but typically, they are paid after property taxes and mechanic's liens.
• Reason: HOA liens are enforced to ensure compliance with community rules and maintenance fees.

6. Other Liens

• Priority: Other liens, such as those from utility companies or private creditors, are generally considered lower in priority compared to property taxes, mechanic's liens, and mortgages.
• Reason: These liens are secondary to the more critical claims related to taxes and improvements.

Important Considerations

• Recording Date: The priority of most liens is determined by the date they are recorded in the county recorder’s office. Liens recorded earlier generally have priority over those recorded later.
• Foreclosure and Sale: During a foreclosure or sale, the proceeds are distributed based on the priority of liens. Higher-priority liens are paid off first, and any remaining funds are used to satisfy lower-priority liens.

Understanding the priority of liens is essential for buyers, sellers, and investors in Nevada real estate transactions to manage and address potential claims effectively.