Where this fits on the exam
| Official syllabus topic | Real Estate Liens and Their Effect on Title |
|---|---|
| Official PSI area | Property Ownership |
| Published area weight | 10% of the national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.
The lesson
Voluntary and involuntary
A consensual mortgage or security instrument is voluntary. Property-tax, judgment, and construction liens can arise without the owner's voluntary grant.
General and specific
A judgment lien is commonly classified as general because it may reach multiple assets. A real estate loan lien, property-tax lien, or mechanic's lien is specific to identified property.
Priority
Priority often begins with recording or attachment, but statutes can give tax or special liens a superior position. Use the rule supplied rather than assuming first recorded always wins.
Effect and release
A lien can impair marketable title and affect sale proceeds. Payment does not clean the public record until the proper satisfaction, cancellation, or release is recorded when required.
Decision rule
Georgia-specific distinction
Worked example
Scenario. A seller has a recorded loan security interest and an unpaid property-tax lien. Sale proceeds are sufficient to pay both.
Reason it through. Both encumber title, and the closing must use the applicable priority and payoff rules. Tax liens can receive statutory priority rather than ordinary recording priority.
Answer. Obtain authoritative payoff figures and record the required releases through closing.
Common exam traps
- Calling a lien an easement
- Assuming lienholder possession
- Treating every lien as general
- Assuming payment alone clears public records
Original practice questions with detailed explanations
These questions were written for instruction and mapped to the current outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1A homeowner signs a security deed to secure a home loan. Later, an unpaid contractor who remodeled the kitchen files a lien on the same house. How are the two security interests classified by how they arise?
- A. Security deed voluntary, contractor's lien involuntary
- B. Both voluntary, since the owner hired both parties
- C. Security deed involuntary, contractor's lien voluntary
- D. Both involuntary, since each one secures a debt
Show answer and explanation →
Answer: A. Security deed voluntary, contractor's lien involuntary
The owner voluntarily gave the lender a security deed, while the contractor claims an involuntary statutory lien. In Georgia, a security deed transfers legal title as security rather than creating a mortgage lien. Hiring the contractor does not make the later lien voluntary.
- A. Correct. The owner voluntarily granted the lender a security interest; the contractor's lien arises by law when its requirements are met.
- B. Incorrect. Hiring a contractor does not mean the owner voluntarily granted a lien.
- C. Incorrect. The lender's agreed security is voluntary, so reversing the labels misclassifies both interests.
- D. Incorrect. Borrowing money does not make the agreed security interest involuntary.
Question 2A title examiner finds these claims while checking an owner's records. Which is usually classified as a general lien?
- A. A property-tax lien on a house
- B. A mechanic's lien on an improved lot
- C. A judgment lien against the debtor
- D. A security deed on a home
Show answer and explanation →
Answer: C. A judgment lien against the debtor
A judgment lien is general because it can reach more than one asset of the debtor. Property-tax liens, mechanic's liens, and loan liens are specific: each attaches to identified property. Assuming a tax lien is general because the government holds it is the usual slip.
- A. Incorrect. A property-tax lien attaches to the taxed parcel rather than generally to all the debtor's property.
- B. Incorrect. A mechanic's lien attaches to the property improved by the labor or materials.
- C. Correct. A judgment lien is generally classified as a general lien against the debtor's property, subject to applicable law.
- D. Incorrect. A security deed encumbers the particular property pledged to the lender.
Question 3A seller paid off a home loan in full five years ago, but the title search still shows the security deed as open. What is needed to clear the record?
- A. Nothing, because payment ended it
- B. A recorded release of the security deed
- C. A new survey of the boundaries
- D. A quitclaim deed from the buyer
Show answer and explanation →
Answer: B. A recorded release of the security deed
Payment ends the debt, but the public record stays clouded until the proper cancellation, satisfaction, or release is recorded. Assuming payment alone cleans the record is the common mistake, and in Georgia the closing attorney handles payoff and recording steps.
- A. Incorrect. Payment settles the debt, but the unreleased instrument can still cloud the public record.
- B. Correct. Obtain and record the appropriate cancellation or satisfaction so the record reflects the payoff.
- C. Incorrect. A survey locates boundaries; it does not release the lender's security interest.
- D. Incorrect. A deed to the buyer does not cancel the prior lender's recorded interest.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Real Estate Liens and Their Effect on Title in one clear answer without notes.
- Separate Voluntary and involuntary from General and specific using a fresh example.
- Apply the decision rule to a new fact pattern and name the fact that controls the result.
- State the Georgia-specific point or explain why the national rule applies unchanged.
- Answer every practice question and explain the rule each rejected option misapplies.
- Revisit this topic later in mixed practice without category labels.
Recommended next lesson
Continue with Easements, Rights of Way, Licenses, Encroachments, and Adverse Possession. Next, encumbrances covers claims on title that limit use rather than secure a debt, such as easements, licenses, encroachments, and adverse possession.
Return to the Property Ownership hub to see every official branch and the complete lesson sequence for this content area.