How is a voluntary lien defined?

A voluntary lien is defined as a lien that is willingly agreed to by the property owner. This means that the debtor has consented to the lien, which is typically associated with a debt obligation. In the context of the choices given, this aligns with the idea of an equitable lien established by the debtor themselves or through a contractual agreement, which may involve a court action if necessary.

This kind of lien arises when a property owner borrows money and offers their property as collateral to secure the loan. Since the property owner voluntarily engages in the transaction and agrees to the terms, the lien reflects their consent and intention to provide the property as security for the debt. This is different from other types of liens, such as statutory liens, which are imposed by law without the owner’s consent, or liens resulting purely from public assessments or actions that do not involve the direct agreement of the property owner. Understanding the voluntary nature of this lien is crucial for those involved in real estate transactions and title insurance, as it impacts the rights and responsibilities of both parties involved in the agreement.