Which statement best defines a lien and identifies two common types?

• A. A lien is a creditor’s claim against property as security for a debt; common types: mortgage lien and tax lien.
• B. A lien is a transfer of title to the property; common types: mortgage lien and tax lien.
• C. A lien is a court order to seize property; common types: mechanics’ lien and easement.
• D. A lien is a leasehold interest in property; common types: mortgage lien and tax lien.

Answer: (A)

A lien is a creditor’s claim against property that serves as security for a debt. This means the property has a encumbrance attached to it, and that claim must be satisfied before the property can be freely transferred or sold. Two common kinds are mortgage liens and tax liens. A mortgage lien attaches to the property because the home or property was used as collateral for a loan; if the borrower defaults, the lender can foreclose to recover what’s owed. A tax lien attaches when property taxes aren’t paid, and it can take priority over other claims, potentially hindering sale or refinancing until the taxes are paid. Other statements describe actions or rights that aren’t liens: transferring title is a deed, not a lien; a court order to seize property is a writ or levy, not a lien; and a leasehold is a tenant’s interest, not a lien.