What is a lien?

A lien refers to a legal claim or right against a property that is typically used as security for a debt or obligation. When a lien is placed on a property, it signifies that the lienholder has a legal stake in the property until the outstanding debt is settled. This means that the property cannot be sold or refinanced without first addressing the lien.

Liens can arise from various situations, such as unpaid taxes, mortgage loans, or contractor fees, and they play an essential role in real estate transactions. Understanding liens is critical for real estate development and reuse because they can affect ownership rights and the ability to finance or develop the property.

In contrast, the other choices do not accurately describe what a lien is. Property insurance serves as a protection against loss or damage, property appraisal is a process of determining a property's value, and investing strategies pertain to the methods of acquiring and managing real estate for profit but do not involve legal claims tied to debts.