What is required for a lien to be effective?

Prepare for the Metro Brokers Exam with flashcards and multiple choice questions. Each question is accompanied by hints and explanations. Get ready for your certification!

For a lien to be effective, it must be recorded. Recording a lien provides public notice of the claim against the property, which is essential for establishing priority over other claims and ensuring that potential purchasers, creditors, or interested parties are aware of the existing lien. This legal action helps to protect the rights of the lien holder by documenting their interest in the property within the public records, thereby solidifying their claim. If a lien is not recorded, it may lose its enforceability against third parties who may acquire rights or interests in the property without knowledge of the lien's existence.

Other options such as oral communication, notarization, or requiring a sale of the property do not provide the legal authority or public awareness needed to establish an effective lien. Recording is specifically designed to create a legal notice, making it the essential requirement for a lien's effectiveness.

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