What determines the impact of the registration judgement on the market value of a property?

• A. It has no effect on market value.
• B. It is determined by local tax assessment.
• C. It always reduces market value by a fixed percentage.
• D. It depends on the owner’s ability to satisfy the judgement from sale proceeds or negotiate discharge.

Answer: (D)

A registration judgement creates a lien on the property, so it always has the potential to affect market value because buyers may be wary of a title that isn’t free of encumbrances. The key factor is whether the owner can clear that lien before or at closing. If the owner can satisfy the judgment from the sale proceeds or negotiate a discharge with the creditor, the title can be cleared and the market value stays aligned with similar, unencumbered properties. If discharge isn’t readily achievable, the sale price may need to reflect the cost or risk of clearing the lien, or the seller may have to negotiate a settlement. That’s why the impact depends on the ability to satisfy the judgment or obtain discharge from sale proceeds.

The other ideas aren’t correct because an encumbrance does affect market value, so it isn’t true that there’s no effect. Local tax assessment doesn’t determine how a judgement impacts value, and the effect isn’t a fixed percentage—it's contingent on how easily the lien can be discharged.