Under which circumstance would an equitable lien arise?

An equitable lien arises when there are fairness principles at play that are recognized and enforced by a court. This type of lien is often established to ensure that justice is served, particularly in situations where one party has a valid claim that would not be adequately addressed through legal title or traditional liens. For example, if a party has performed work or provided goods for which they haven't been compensated, a court may impose an equitable lien to prevent the unjust enrichment of the other party who benefits from that work without making payment.

In such cases, the focus is on fairness and equity rather than strict adherence to formal contracts or legal requirements. This is what distinguishes an equitable lien from other types of liens; it emphasizes the court's role in recognizing rights based on fairness, regardless of whether formal agreements exist.

The other options do not sufficiently meet the criteria for establishing an equitable lien. Selling a property with no contracts or relying solely on informal agreements and verbal commitments typically do not provide the necessary legal foundation for creating a lien that a court would enforce.