Property Ownership
What is the primary difference between a lien and an encumbrance?
AThey are identical terms
BAll liens are encumbrances, but not all encumbrances are liens✓ Correct
CAll encumbrances are liens, but not all liens are encumbrances
DEncumbrances apply only to commercial property
Explanation
An encumbrance is any interest in or claim on real property that may diminish its value. A lien is a type of financial encumbrance — all liens are encumbrances, but encumbrances include non-financial restrictions like easements and deed restrictions.
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