Encumbrance

Definition

An Encumbrance is a claim or charge against real property, such as a mortgage, lien, or easement, that can affect the transfer of ownership.

Purpose

Encumbrances provide a legal mechanism to secure obligations, protect interests, and regulate property use, ensuring that property transactions reflect all existing claims and rights.

Examples of Use

• Mortgages: A home loan that places a lien on the property until the debt is repaid.
• Liens: Claims by creditors against a property for unpaid debts.
• Easements: Rights granted to third parties to use a portion of the property for specific purposes, such as utility lines.

Related Terms

• Lien: A legal right or interest that a lender has in the borrower's property.
• Mortgage: A loan secured by the property, typically for the purchase of the property.
• Deed Restriction: A clause in a deed that limits how the property can be used.

Notes

• Encumbrances can affect property value and marketability.
• It's important to conduct a title search before purchasing property to identify any existing encumbrances.