California Real Estate Practice Exam

A mechanic's lien creates?

1. a cloud on title

2. a lease agreement

3. an easement by necessity

4. a profit for the seller

The correct answer is: a cloud on title

A mechanic's lien creates a legal claim or interest in a property that allows a mechanic or contractor to recover unpaid costs for work done on the property. This lien can prevent the property from being sold or refinanced until the debt is paid. The other options are incorrect because B) A lease agreement is a contract between a landlord and tenant, and does not involve a mechanic's lien. C) An easement by necessity is a right to use someone else's property for access or utility purposes, and is not related to a mechanic's lien. D) A profit for the seller is a financial gain or benefit, and is not associated with a mechanic's lien.