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The First Shall Be Last: A Contextual Argument for Abandoning Temporal Rules of Lien Priority

39 Pages Posted: 25 Jul 2004  

Ronald J. Mann

Columbia University - Law School

Abstract

This paper is an empirical and analytical investigation of priority in construction lending. It rests on a substantial set of interviews with construction lenders and borrowers. Generally, it argues that construction lenders are better placed than mechanic's lien claimants to implement procedures that limit the risk of borrower defalcation. Accordingly, it recommends a reversal of the ordinary rule of priority, which permits construction lenders to have priority over mechanic's lien claimants. A reversal of the rule of priority will more effectively police borrower defalcation.

Keywords: lending, lien

JEL Classification: D23, K11

Suggested Citation

Mann, Ronald J., The First Shall Be Last: A Contextual Argument for Abandoning Temporal Rules of Lien Priority. Texas Law Review, Vol. 75, No. 1, pp. 11-49, November 1996; U of Texas Law, Law and Econ Research Paper No. #. Available at SSRN: https://ssrn.com/abstract=567424

Ronald J. Mann (Contact Author)

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States

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