Hawaii Pre-Licensing National Practice Exam 2025 – Your Complete Prep Guide

The term used for a property that is encumbered by a debt is "lien." A lien represents a legal claim or right against a property, typically used as security for a debt. When a property is encumbered, it means that there is a legal obligation associated with it—often financial—where a creditor has a claim against the property until the debt is satisfied. This can occur through various forms, such as mortgages or other secured loans, where the lender has a lien on the property.

In this context, while a mortgage is a common type of lien specifically related to property financing, and liability refers to the overall obligation or debt owed, the broader term that encompasses any claim against the property regardless of the type of debt is "lien." Leverage, on the other hand, refers to the use of borrowed capital to increase the potential return of an investment and doesn't accurately describe the nature of the encumbrance on the property itself. Thus, "lien" is the precise term that captures the essence of a property burdened by debt.