National Salesperson Practice Exam 2025 – Complete Study Resource

A lien is a legal claim or right against a property that typically arises when a debt or obligation is not met. When a lien is placed on a property, it signifies that the property cannot be sold or transferred without addressing the debt associated with the lien.

Encroachment refers to a situation where an individual's property extends into another's property, such as a fence or building that crosses property lines. This is not classified as a lien. While it can create disputes and possible legal challenges, encroachment does not impose a financial obligation or a claim against the property in the same way that a lien does.

On the other hand, a judgment signifies a court's determination regarding a debt owed and can create a judgment lien on the debtor’s property when it's not paid. A mechanic's lien is a specific type of lien that contractors or subcontractors can file against a property when they have not been paid for work performed on that property. Similarly, a mortgage is a type of lien that secures the lender’s interest in the property until the loan is paid off.

Thus, the distinction lies in the fact that encroachment does not create a financial obligation or a legal claim to secure payment, making it the correct answer to the question.