What is a lien?

A lien is fundamentally a financial claim against a property, establishing a legal right that gives creditors the ability to repossess or eventually force the sale of the property if the debt it secures is not paid. This means that the lien represents a type of security interest that can arise from various obligations, such as loans or unpaid bills, which can impact the owner's ability to transfer or sell the property until the debt is settled. Essentially, a lien acts as a legal tool that protects the interests of creditors and ensures they can enforce their rights to recover any debts owed to them.

In contrast, the other answer choices describe different concepts: insurance pertains to risk management against property damages or losses; a right granted to another party to use the property typically refers to easements or licenses, which do not involve a financial claim; and a formal agreement between two property owners describes contracts or deeds rather than claims on property.