What does the term "encumbrance" commonly refer to?

The term "encumbrance" commonly refers to any lien or claim against a property. In real estate, an encumbrance identifies a burden on the property that can affect its marketability or the owner's rights. This includes mortgages, easements, and other types of financial obligations that may be attached to the property. When a property has an encumbrance, it indicates that there will be restrictions or obligations that the property owner must satisfy, which could impact their ability to transfer the title or the value of the property in the eyes of buyers or lenders.

Understanding encumbrances is crucial for anyone involved in real estate transactions, as they can significantly influence the decisions buyers and sellers make regarding a property. This foundational knowledge helps in navigating the complexities of property rights and obligations.

The other concepts associated with encumbrance, such as physical structures, defects in the title, or restrictions on property use, relate to different facets of real estate but do not capture the broader and more inclusive definition of encumbrance as it pertains to liens or claims against property.