Which of the following options describes a subordination agreement?

A subordination agreement refers specifically to a legal arrangement between two lien holders where one party agrees to lower its priority in favor of another. This is particularly significant in real estate transactions where multiple liens may exist against a property. The priority of liens is crucial, as it dictates the order in which creditors get paid in the event of a foreclosure or property sale.

When a lien holder subordinates their lien, it allows another lien holder to take precedence, which can facilitate additional financing for the property or make it more attractive to potential buyers or lenders. This is a common practice in situations such as refinancing a mortgage, where the new lender may require a superior lien position over existing debts.

The options that describe various forms of agreements, such as those between contractors or landowners, do not pertain to the core concept of lien priority and modification, which is the essence of a subordination agreement. Thus, the definition confirmed by the correct choice accurately reflects the purpose and function of subordination agreements in real estate.