Florida Broker Practice Exam

What generally distinguishes a vendor's lien from other types of liens?

1. It is typically related to a mortgage

2. It arises from the sale of real estate

3. It includes unsecured loans

4. It is a type of taxation lien

The correct answer is: It arises from the sale of real estate

A vendor's lien is specifically related to the sale of real estate, making it distinct from other types of liens. This type of lien arises when a seller finances all or part of the sale price for a buyer who has not yet paid in full. Essentially, it serves as a security interest for the seller in the property sold until the buyer fulfills their payment obligation. This connection to a real estate transaction is what primarily differentiates it from liens that are associated with mortgages, unsecured loans, or taxation. In contrast, a mortgage lien typically involves a financial institution lending money to purchase property, while unsecured loans do not involve any real property as collateral. A taxation lien, on the other hand, is imposed by the government for unpaid taxes and does not stem from a sale transaction. The nature of a vendor's lien revolves around the seller's right to the property due to considerations made in the sale, emphasizing its unique role in real estate transactions.