In a mortgage or deed of trust, a provision that a later lien shall have a priority interest over the existing lien. It makes the existing lien inferior to a later lien, in effect exchanging priorities with that later lien. Back to the Top
An agreement by which an encumbrance is made subject to a junior encumbrance; a lender with a loan in second position agrees to stay in second position on the property, even when the loan in first position has been rewritten or refinanced.
An agreement by which a lien holder agrees to accept a lien position junior to that of a later-recorded lien. Subordinations may apply not only to mortgages, but also to leases, real estate rights and any other types of debt interests.
As used in a lease, the tenant generally accepts the leased premises subject to any recorded mortgage or deed of trust lien and all existing recorded restrictions, and the landlord is often given the power to subordinate the tenant's interest to any first mortgage or deed of trust lien subsequently placed upon the leased premises.
To place in lower order, class, or rank. An agreement for a document to be placed in order behind or lower than a subsequently recorded document. Example: Agreement for a first lien Deed Of Trust to be put behind or follow the second lien Deed Of Trust.
An agreement in which a party holding a security interest in property grants another interested party a priority claim or preference to the property of the borrower ahead of any claim that the first interested party may have.
An agreement by the holder of an encumbrance against real property to permit that claim to take an inferior position to other encumbrances against the property. The University may, as its option, refuse to sign a Subordination Agreement.
A written agreement between lienholders to change the priority of mortgage, judgment and other liens. Under a subordination agreement, the holder of a superior or prior lien agrees to permit a junior lienholder's interest to move ahead of his or her lien. (See junior mortgage, lien)
An agreement by which one encumbrance (for example, a mortgage) is made subject to another encumbrance (for example, a mortgage) is made subject to another encumbrance (perhaps a lease). To "subordinate" is to "make subject to," or to make of lower priority.
An agreement by which one holding an otherwise senior lien or other real estate interest consents to a reduction in priority vis-à-vis another person or entity holding an interest in the same real estate.
A document by which parties acknowledge, by written record, that the debt of one is inferior to the debt or interest of another in the same property. Subordination may apply not only to mortgage, but to leases, real estate rights, and any other types of debt interests.