ICC Permit Technician Practice Exam

What is a claim of encumbrance on a property to secure a debt or obligation called?

1. Lien

2. Warranty

3. Title

4. Attachment

The correct answer is: Lien

A claim of encumbrance on a property to secure a debt or obligation is called a lien. A lien serves as a legal right or interest that a lender or creditor has in a debtor's property, granted until the debt obligation is satisfied. This means that if the property owner fails to fulfill their financial obligations, the lien allows the creditor to seek satisfaction from the property, such as through foreclosure. Understanding liens is crucial, especially in real estate and financial transactions, as they provide a level of security to those extending credit. Other concepts like warranty, title, and attachment relate to property but serve different purposes. A warranty pertains to the assurance regarding the quality or condition of the property, while a title signifies the legal ownership of property. An attachment is a legal procedure to seize and hold property to satisfy a court judgment, which is distinct from a lien since it doesn't reflect a long-term obligation in relation to debt.