What distinguishes a lien from other types of encumbrances?

A lien is distinguished from other types of encumbrances primarily by its requirement to be satisfied before the transfer of title. This means that when a property with a lien is sold, the lien must be cleared—usually through payment—before the new owner can receive a clear title to the property. It represents a monetary claim against the property for the payment of a debt, such as a mortgage or a mechanic’s lien, and ensures that creditors have the right to be paid from the proceeds when the property is sold.

In contrast, the other options do not correctly characterize how liens operate. For example, the option regarding permanent rights to use another's land pertains more to easements. Ownership transfer reflects property rights but does not specifically describe how liens function compared to other encumbrances. Lastly, the notion that liens affect only one property type is inaccurate as liens can apply across various types of properties, including residential, commercial, and other real estate. Therefore, the defining characteristic of liens is their priority in being resolved prior to any title transfer, making satisfaction of the lien a critical step in the property transaction process.