What does unsubordinated mean in real estate?

Unsubordinated Definition

In real estate, "unsubordinated" refers to a debt or lien that has priority over other debts or liens on the same property. This means that in the event of a sale or foreclosure, unsubordinated debts are paid out first before any other claims. Unsubordinated debts typically include senior mortgages, which hold the highest claim on a property's assets and income in the hierarchy of financial obligations.

Example: If a commercial property is financed with a primary mortgage and later takes on a second mortgage, the primary mortgage is unsubordinated. This means if the property goes into foreclosure, the primary mortgage must be fully paid off before any funds can be allocated to the second mortgage or other junior liens.

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