Encumbrance
An encumbrance is any claim, lien, or liability attached to real property that may diminish its value or affect the owner's ability to transfer clear title.
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Exam Tip
Encumbrances = anything that burdens property. Includes liens (financial) and easements (non-financial). Title search reveals most encumbrances.
What is an Encumbrance?
An encumbrance is anything that burdens, limits, or affects the use or transfer of property. It can be financial (liens) or non-financial (easements, restrictions).
Types of Encumbrances
| Type | Examples |
|---|---|
| Liens | Mortgage, tax lien, judgment lien, mechanic's lien |
| Easements | Utility easement, access easement |
| Restrictions | Deed restrictions, CC&Rs, zoning |
| Encroachments | Structure crossing property line |
| Leases | Existing tenant rights |
Financial vs. Non-Financial
| Financial (Liens) | Non-Financial |
|---|---|
| Secure debt | Affect use of property |
| Must be paid at closing | May transfer with property |
| Can result in foreclosure | Generally can't be removed by payment |
Finding Encumbrances
| Search Type | What It Reveals |
|---|---|
| Title Search | Liens, judgments, mortgages |
| Survey | Encroachments, easements |
| Zoning Review | Use restrictions |
| HOA Documents | CC&Rs, restrictions |
Impact on Property Transfer
Clear title requires addressing encumbrances:
- Liens must be paid or satisfied
- Easements and restrictions usually transfer with property
- Encroachments may need resolution
Study This Term In
Related Terms
Lien
A lien is a legal claim against a property that must be paid when the property is sold, serving as security for a debt or obligation.
Easement
An easement is a non-possessory right to use another person's land for a specific purpose, such as accessing a road or running utility lines.
Title
Title is the legal right to own, use, and dispose of real property, representing the bundle of rights that come with property ownership.
Deed
A deed is a legal document that transfers ownership (title) of real property from one party to another.
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