A security interest is a property interest created by agreement or by operation of law over assets to secure the performance of an obligation. The obligation in question is usually the obligation to make payment on a debt. With respect to real property (as opposed to the other main type of property – personal property), there are four main security interests. Those security interests are: (i) mortgages, (ii) deeds of trust, (iii) installment land contracts, and (iv) sale-leasebacks. In this article, we’ll discuss each one of those security interests, with real world examples.
Next, we’ll discuss the mortgage, the first type of security interest in real property.