Which instrument creates a lien?

• A. Mortgage or Trust Deed
• B. Deed
• C. Lease
• D. Option to Purchase

Answer: (A)

A lien is created when the property is pledged as security for a loan, and the instrument that does this in real estate is a mortgage or a deed of trust. These documents attach a security interest to the real estate, giving the lender a legal claim on the property if the loan isn’t repaid, and they’re typically recorded to be enforceable against others. A deed, by contrast, transfers ownership and does not secure a debt by itself. A lease merely grants possession for a term and does not create a security interest in the property. An option to purchase provides a future right to buy but does not establish a lien on the property unless paired with another instrument that creates a security interest.