Encumbrance
Any claim, right, or restriction on the property held by someone other than the owner. Liens are encumbrances, but so are easements and deed restrictions.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
Every lien, easement and restriction on your home is an encumbrance, and the title commitment lists them all. Some are paid off at closing; some stay with the home forever, and the buyer takes title subject to them.
Part 2 of 4
A simple example
Your commitment lists a mortgage, a utility easement along the side yard, and a subdivision covenant. One is paid, two stay.
| The encumbrance | At closing |
|---|---|
| The mortgage | Paid off and released |
| The utility easement | Stays; the buyer takes title subject to it |
| The subdivision covenant | Stays; it runs with the land |
Encumbrances come in two kinds: the ones money removes and the ones that are part of the property.
Part 3 of 4
What people get wrong
That an encumbrance is always a problem. Most homes carry several, and only the ones that can be paid off need to be.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
One piece of your sale. Here is where all the pieces live.
In your room, this word explains itself where it appears.
Keighbor keeps your whole home sale in one place and defines every term like this one right where you meet it, in the step you're on. Free to set up, with or without an agent.