What is a lien in real estate?

A lien in real estate is defined as a financial claim against a property for unpaid debts. This means that if a property owner fails to pay certain debts, such as a mortgage, property taxes, or contractor fees, the lien serves as a legal right for the lender or creditor to take action against the property. This claim not only secures the interest of the creditor but also affects the owner's ability to sell or refinance the property, as the lien must typically be cleared before any transfer of ownership can occur.

This understanding is essential for anyone studying real estate fundamentals, as liens can have significant implications for property transactions and financing. Hence, recognizing a lien as a financial claim is crucial for managing responsibilities related to property ownership and understanding the legal implications of debts associated with real estate.