What is a lien?

A lien is fundamentally a legal claim or right against property that secures the payment of a debt or obligation. When a lien is placed on a property, it means that the property is collateral for a debt, and the creditor has the right to obtain payment from the proceeds of the property if the debtor fails to satisfy the debt. This instrument ensures that creditors can enforce their financial interests by potentially taking possession of the property or receiving the owed amount when the property is sold or refinanced.

This definition encompasses various types of liens, including mortgage liens, tax liens, and mechanic's liens, among others, which all serve the same core purpose of providing security for payment. Understanding that a lien directly impacts the property’s title and the owner's ability to transfer ownership is crucial in the context of real estate transactions and title insurance.