A Subordination Agreement in Washington State: A Guide for Property Owners

For property owners in Washington State, subordination agreements are an important legal tool that can help facilitate complex real estate transactions. If you are currently undergoing the process of buying or selling property in Washington State, it is essential to understand what subordination agreements are, how they work, and when they are necessary.

What is a Subordination Agreement?

In the context of real estate, a subordination agreement refers to a legal document that establishes the priority of liens on a specific property. A lien is a legal claim against property that can be used to secure a debt or obligation. For example, if you have a mortgage on your home, your lender has a lien on your property that gives them the right to foreclose if you fail to make your mortgage payments.

A subordination agreement allows a property owner to change the priority of existing liens on their property. In other words, it allows a secondary lienholder to move ahead of a primary lienholder in the event of foreclosure. This can be useful in a variety of situations, such as when a property owner wants to refinance their home but has an existing first mortgage that must be paid off before a new mortgage can be obtained.

When is a Subordination Agreement Necessary?

Subordination agreements are typically necessary when a property owner wants to refinance their property or take out a new mortgage. In order to do so, any existing liens on the property must be paid off or subordinated to the new loan. This is because lenders want to ensure that they have the first claim on the property in the event of foreclosure.

In addition to refinancing, subordination agreements can also be necessary in the context of real estate sales. For example, if a property owner wants to sell their property but has an existing lien, the lien must be paid off or subordinated in order for the sale to go through.

What are the Requirements for a Valid Subordination Agreement?

In order for a subordination agreement to be valid in Washington State, it must meet certain legal requirements. First, it must be in writing and signed by all parties involved. Second, it must be recorded in the county where the property is located.

In addition, the subordination agreement must clearly identify the lienholders involved, the specific liens being subordinated, and the terms and conditions of the subordination. It is important to have an experienced real estate attorney review any subordination agreement to ensure that it meets all legal requirements and adequately protects the interests of all parties involved.


A subordination agreement can be an important tool for property owners in Washington State who are looking to refinance their property or sell it with an existing lien. By understanding the basics of subordination agreements and working with an experienced real estate attorney, property owners can ensure that their transactions are smooth and legally sound.