What action must be taken if all obligations by a legal owner are satisfied?

In a scenario where all obligations by a legal owner are satisfied, the correct action to take is to release the lien in the title. This means that the legal owner's responsibility for any debts or obligations associated with the title is completed, and therefore, they hold clear ownership of the property. This action confirms that the property's title is free of claims, which is essential for the owner's peace of mind and crucial for any future transactions involving the property.

While notifying the department may be a procedural step in certain contexts, it does not directly address the immediate need to clear the title. Transferring the title to a new owner is a separate process that would occur only when a sale or transfer is intended, and canceling the registration would not be applicable if the owner retains the ownership of the property. Hence, releasing the lien is fundamentally the critical action that ensures the title reflects the free and clear ownership of the property.