What is a lien?

What is a lien?

• A. A legal claim against property as security for a debt or obligation
• B. A right of possession
• C. A transfer of ownership
• D. A zoning restriction

Answer: (A)

A lien is a legal claim against a property used to secure the payment of a debt or the performance of an obligation. It encumbers the property itself, not the owner personally, and gives the creditor a right to satisfy the debt from the property if payment isn’t made. For example, a mortgage creates a lien on the home to secure the loan, and unpaid property taxes can create a tax lien. The lien stays with the property and can survive if the property is sold, until the debt is paid or the lien is released. This is different from merely having a right of possession (like a lease), a transfer of ownership (title), or a zoning restriction (government rules about land use).

A lien is a legal claim against a property used to secure the payment of a debt or the performance of an obligation. It encumbers the property itself, not the owner personally, and gives the creditor a right to satisfy the debt from the property if payment isn’t made. For example, a mortgage creates a lien on the home to secure the loan, and unpaid property taxes can create a tax lien. The lien stays with the property and can survive if the property is sold, until the debt is paid or the lien is released. This is different from merely having a right of possession (like a lease), a transfer of ownership (title), or a zoning restriction (government rules about land use).