Florida Broker Practice Exam

When is a judgment lien typically created?

1. When a mortgage payment is missed

2. Upon winning a lawsuit and obtaining a court order

3. Through the execution of a subordination agreement

4. When property taxes are unpaid

The correct answer is: Upon winning a lawsuit and obtaining a court order

A judgment lien is typically created when an individual wins a lawsuit and obtains a court order that allows them to secure their claim against the debtor's property. This type of lien gives the victorious party a legal right to claim against the property of the losing party, ensuring the judgment can be satisfied through the debtor's real property if necessary. In practical terms, once the court issues a judgment in favor of the plaintiff, they may file that judgment in the appropriate jurisdiction, effectively placing a lien on the debtor's property. This process helps protect the creditor's interest and provides a means of collecting the owed amounts should the debtor fail to pay voluntarily. The other scenarios described do not result in a judgment lien. Missing a mortgage payment may lead to foreclosure but does not create a judgment lien against the property. Similarly, executing a subordination agreement relates to the priority of different liens but does not create a lien itself. Unpaid property taxes lead to tax liens instead of judgment liens, as they are specific to enforcement by taxing authorities.