Which liens are specifically identified as exceptions to municipal lien being the first lien on land?

• A. State liens
• B. Federal liens
• C. State and Federal liens
• D. Local liens

Answer: (C)

When thinking about lien priority, the basic idea is which debts get paid first from the sale proceeds of a property. A municipal lien is typically the first in line because it represents local taxes or assessments owed to the city or town. However, certain government claims outrank municipal liens due to the government’s enforcement powers. State and federal tax liens are identified as exceptions because both the state and the federal government have statutory priority to collect taxes, and their liens attach to the property ahead of most private claims.

Practically, if a property has a federal tax lien or a state tax lien, those government liens are paid first from any proceeds, before the municipal tax lien. Local or private liens don’t generally have that same superpriority, so they come after the government tax liens.