National Real Estate Practice Exam

Which type of lien is imposed to secure payment for services rendered on a property?

1. Judgment lien

2. Property tax lien

3. Mechanic's lien

4. Mortgage lien

The correct answer is: Mechanic's lien

The correct answer is a mechanic's lien, which is specifically designed to secure payment for services rendered related to the improvement of a property. When a contractor, subcontractor, or supplier provides labor or materials to improve a property and is not paid for those services, they can file a mechanic's lien against the property. This legal claim ensures that the lienholder has a right to be compensated from the property's value before the property can be sold or refinanced. Mechanic's liens play a crucial role in the construction industry because they provide a form of security for those who contribute to the enhancement of a property. They are enforced through the legal system and must follow specific filing and notification procedures to remain valid. In contrast, judgment liens arise from a court's decision to enforce the payment of debts and are not specifically tied to service rendered on the property. Property tax liens are government claims against a property for unpaid taxes, while mortgage liens are secured loans taken out to purchase property, where the property itself serves as collateral. Each of these liens serves different purposes and contexts, making the mechanic's lien the only choice that directly relates to securing payment for services provided specifically for property improvement.