Final Answer:
Given the options, the lien with the highest priority is the real estate tax lien for the current year, so option B is correct.
Step-by-step explanation:
Here's a brief overview of the types of liens mentioned and their general priority:
A) Mechanic's lien: This type of lien is placed on the property for unpaid work done on it, such as construction or repairs. While mechanic's liens can have a high priority, they generally do not supersede tax liens.
B) Real estate tax lien: Liens for unpaid property taxes almost universally have the highest priority. This means that they are paid first out of the proceeds from the sale of the property, before any other liens, regardless of when they are placed on the property.
C) Judgment lien: This lien is the result of a court judgment and can be placed on the property of the debtor. Its priority is usually lower than tax liens and sometimes even below mortgage liens depending on the jurisdiction.
D) Outstanding first mortgage lien: This is a lien placed by the lender when the mortgage is given. It typically has priority over most other liens except for tax liens, and its priority is determined by the date it was recorded.
Tax liens are given special consideration because they are debts owed to the government and, as such, they typically take precedence over other types of liens, no matter when those other liens were recorded.
Thus, the proceeds from the sale of the property would first be used to satisfy the real estate tax lien, and then any remaining funds would be allocated to the other liens in the order of their priority. (Option B)