The Art of Islamic Banking and Finance: Tools and Techniques for Community-Based Banking

The Meaning of Establishing a Lien Based on the definitions of pawn and
lien, one can establish that liens, which could not have existed without a
searchable title database in order to make sure that the property is free and
clear and that there are no unknown claims against it, are a form of owner-
ship right that is different from the classic pawning (rahn)contract.Here
are some facts to support our conclusion:

&A lien is defined in the dictionary^19 as ‘‘a conveyance of title to prop-

erty that is given to secure an obligation—as a debt or promise to per-

form a financial obligation—and that is defeated upon payment or

performance according to stipulated terms.’’

&An acid test of the above consists of the response to two events: The

first is that when the house experiences damage of some sort, the insur-

ance company issues the check in the name of the title owner and the

co-mortgage—or lien—holder. Second is the fact that the process of

releasing the lien is called ‘‘re-conveyance’’ of title.

Based on these facts, the conceptual definition of a mortgage and the
perfection of a lien in favor of the RF bank is like adiminishing partnership

DEFINITION OF A LIEN

Lien is defined as the right to take and hold or sell the property of a

debtor as security or payment for a debt or duty.

It is also defined as a claim, encumbrance, or charge on property

for payment of some debt, obligation, or duty.^18 Additionally, it is de-

fined as aqualifiedright of property which a creditor has in or over

specific property of his debtor as security for the debt or charge or for

performance of some act. It is further defined as a right or claim

against some interest in property created by law as an incident of con-

tract. It is also defined as:

&Right to enforce charge upon property of another for payment or

satisfaction of debt or claim

&Right to retain property for payment of debt or demand

&Security for debt, duty, or other obligation

&Tie that binds property to a debt or claim for its satisfaction

&A charge against or interest in property to secure payment of a

debt or performance of an obligation

262 THE ART OF ISLAMIC BANKING AND FINANCE