Property OwnershipIntermediateArizona Exam

A 'possessory lien' in Arizona differs from other liens in that:

AMust be recorded with the county recorder's office in the county where the personal property is located to be enforceable against third-party creditors

BThe lienholder must maintain physical possession of the personal property to hold the lienCorrect

CCan only attach to real property and is not available as a security device for any category of personal property under Arizona statutes

DRequires a court order obtained through a summary proceeding before any lienholder can perfect the lien and take possession of the subject personal property

Why The lienholder must maintain physical possession of the personal property to hold the lien Is Correct

Answer B: The lienholder must maintain physical possession of the personal property to hold the lien

A possessory lien (like an artisan's lien or mechanic's lien on personal property) requires the lienholder to maintain physical possession of the property as security for payment. Releasing possession generally extinguishes the lien.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.