NCEES Principles and Practice of Surveying Practice Exam

What does a Lien represent in property law?

1. A transfer of ownership of the property.

2. A security against debt.

3. A rental agreement between parties.

4. A method to divide property among heirs.

The correct answer is: A security against debt.

A lien represents a legal right or interest that a lender has in the borrower's property, granted until the debt obligation is satisfied. Essentially, it serves as a security interest against the property, ensuring that the lender has a claim on the asset if the borrower fails to fulfill their financial obligations. In the context of property law, this means that if the debt is unpaid, the lender may have the right to take possession of the property or force its sale to recover the owed amount. This security feature is critical in facilitating lending transactions, as it provides the lender with a means to mitigate risk by having collateral tied to the loan. The other options reflect different concepts in property law. A transfer of ownership refers to the conveyance of property rights from one party to another, which does not align with the concept of a lien. A rental agreement pertains to rental or lease arrangements between parties rather than a security interest. A method to divide property among heirs deals with inheritance and succession, which is separate from the obligations a lien represents.