Building Code Administrators and Inspectors Florida Principle and Practice Licensure Practice Exam

What is the correct order of lien priority under a direct contract?

1. Liens of the contractor, liens of all persons other than the contractor, liens of all laborers

2. Liens of all persons other than the contractor, liens of all laborers, liens of the contractor

3. Liens of all laborers, liens of all persons other than the contractor, liens of the contractor

4. Liens of the contractor, liens of all laborers, liens of all persons other than the contractor

The correct answer is: Liens of all laborers, liens of all persons other than the contractor, liens of the contractor

In the context of lien priority under a direct contract, the correct order is primarily based on the principle that laborers are typically afforded higher priority for payment than material suppliers or contractors. Laborers contribute directly to the physical work on the project, and many states protect their interests by prioritizing their claims above others. When analyzing the order of lien priority, laborers’ liens are recognized first because they can be considered as having a direct impact on the project's completion and the property itself. Following the laborers are the liens of all persons other than the contractor, which may include suppliers, subcontractors, and others who have rendered services or provided materials for the project. Lastly, the liens of the contractor come after those of laborers and others, recognizing that while the contractor plays a crucial role, the direct contributions of labor and lower-tier suppliers or service providers come first in terms of claims against the property. This prioritization is particularly significant when it comes to foreclosure proceedings or when seeking payment, as it protects those who are more directly involved in the day-to-day work on the job site. Thus, the sequence starting with the laborers’ liens, followed by liens of other persons, and concluding with the contractor's liens aligns with common practices in construction