What is an encumbrance in real estate?

An encumbrance in real estate refers to any claim, lien, charge, or liability that affects a property and can limit the owner's use or transfer of that property. This means that even though the property owner holds the title, there are certain restrictions or obligations that may come into play due to the encumbrance.

Common examples of encumbrances include mortgages, easements, and property tax liens. These encumbrances can affect how a property owner can utilize their property or can be a factor when selling the property, as potential buyers may want to be aware of any existing encumbrances prior to purchasing.

The concept of an encumbrance is important for buyers, sellers, and real estate professionals to understand, as it can directly impact the legal standing and financial responsibilities associated with real estate ownership.