Real Estate Glossary

What is Contractual Lien?

A contractual lien is a type of legal claim on a property that is created by a contract. It is a way for one party to secure an interest in a property as collateral for a debt or obligation. For example, if someone takes out a loan to buy a house and uses the house as collateral for the loan, the lender can place a contractual lien on the property. This means that if the borrower fails to pay back the loan, the lender has the right to take possession of the house in order to recoup the money they are owed.