What establishes the supplier's security interest in a property?

The establishment of a supplier's security interest in property is primarily represented by a lien. A lien is a legal right or interest that a lender or supplier has in the borrower's property, granted until the debt obligation is satisfied. In this context, a lien allows the supplier to claim the property if the borrower fails to fulfill their payment obligations.

When a supplier extends credit or provides goods, they may secure their interest in the property by establishing a lien on it, ensuring that they have a legal claim to the property that can be enforced in the event of non-payment. This legal instrument provides the supplier with a certain level of protection and priority over other creditors.

While a title deed denotes ownership of property and a mortgage agreement secures a loan with real property, neither explicitly establishes a security interest held by a supplier in the same manner as a lien does. A contract may outline terms of the agreement, but it does not inherently provide the supplier with a legal claim to the property unless a lien is granted. Thus, the lien is the correct representation of the supplier's security interest in the property.