property
encumbrance
Any claim, right, interest, or restriction on real property that may lessen its value or limit its use, without necessarily preventing a transfer of title. Encumbrances are either financial, such as mortgages and other liens, or physical and use-related, such as easements, encroachments, and deed restrictions. Buyers usually learn of encumbrances through a title search and survey.
- Exam tip
- All liens are encumbrances, but not all encumbrances are liens. Easements and restrictions affect use, not money owed.
- Example
- A home with a recorded utility easement along the back fence and a $150,000 mortgage has two encumbrances: one physical, one financial.
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Last verified: 2026-10-23