In real estate and legal practice, subrogation is the substitution of one person or entity for another with respect to a legal right or obligation. The party stepping into the position of another acquires the same rights and remedies that the original party possessed.
Subrogation commonly occurs in insurance and lending contexts. For example, when an insurer pays a loss, it may be subrogated to the insured’s rights against responsible parties in order to recover the amount paid.
