What is a Lien

							**RG**

A lien is a limited right of the mortgagee which is usually appointed to secure a claim. The
debtor of the receivable and the pledgor must not be the same person. The lien allows others to
instigate a pledge.

Classification

It may be:

     a). by type
          - contractually bound lien (also known as a pawn right)
          - liens arising by law
          - Attachment lien
   b). manner of its announcement in legal relations
          - pledge law (announcement by possession)
          - register lien (announcement in a public register)
   c). nature of the pledged goods
          - Mortgage
   d). after attachment
          - accessory liens

Accessory liens depends on the formation, transfer and the existence of the claim on the lien.
The contractually based right of pledge on movable property economically plays only a minor
role. The pledger must therefore make the possession of the pledged item to the creditor.

Therefore, the lien in practice is largely replaced by the collateral assignment. Another form of
collateral provided is the retention of title. The weakness of the lien is that the pledger can not
continue to use the object, such as machines. However, must not be misunderstood as the
granting of automatic possession.

It is sufficient that the creditor obtains the indirect ownership. The scheme incorporates the
substance of property law because of the publicity principle, however, it also entails a pledge to
the owner.

A lien is only secured as long as a claim exists, and when the demand has been met, the lien
automatically expires, it requires no special mode.

The lien expires by

    * Annulment of the claim
    * Waiver by the creditor,
    * Voluntary return of the item or
    * Legitimate sale.