How is "encumbrance" defined in real estate?

In real estate, "encumbrance" is defined as a claim, lien, charge, or liability that is attached to a property and can affect its transferability. This means that when a property has an encumbrance, it signifies that there are additional legal or financial obligations associated with that property. These obligations could include mortgages, easements, or tax liens, which may hinder the owner's ability to sell or transfer the property without resolving those issues first.

The concept of encumbrance is crucial in real estate transactions, as it impacts the value and desirability of a property. For example, if a property has a mortgage, the lender has a right to claim the property if the borrower defaults on the loan. Similarly, easements allow others to use a portion of the property, which can limit the owner's full enjoyment and control over their property.

Understanding encumbrances helps potential buyers and sellers navigate legal complexities and ensures they are fully aware of any claims or liabilities that might affect the property’s marketability and overall value.