What is a Vendor's Lien?

A Vendor's Lien arises when a seller, or vendor, retains a security interest in the property that has been sold until the buyer fulfills their obligation to pay the purchase price in full. This type of lien is particularly useful for sellers who have not taken any formal security measures, such as a mortgage or deed of trust, to secure their interest in the property. When the buyer fails to pay the agreed-upon amount, the vendor can enforce the lien, allowing them to reclaim the property as a means of securing the unpaid balance.

The concept of a Vendor's Lien underscores the seller's right to protect their financial interest in a transaction until they receive full payment. It illustrates the principle that ownership transfer does not eliminate the seller's claim on the property if they have not fully received payment.

Other options describe different types of liens that do not relate to the seller’s right in a real estate transaction. For instance, a lien for unpaid taxes is associated with government claims rather than vendor-secured interests. Similarly, regulatory liens imposed by the government address compliance issues, while liens guaranteeing bank financing pertain to lender interests in the property, which are different from a vendor's rights in the context of unpaid purchase obligations. Thus, the nature and function of