Term of the Month: Encumbrance

Term of the Month: Encumbrance Ever stumbled upon this word while diving into real estate lingo? Let’s break it down!

Encumbrance refers to any claim or lien on a property, which can restrict its use or transfer. It’s like a ‘mark’ on the property’s title, indicating debts, restrictions, or other factors that might affect ownership. Examples include:

Mortgages: The most common encumbrance, where the property is collateral for a loan.

Easements: A right for someone else to use a part of the property, like a shared driveway.

Liens: Claims made on the property due to unpaid debts, like taxes or contractor fees.

Understanding encumbrances helps in making informed property decisions. Always good to know what’s on the title before making a move!

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