Encumbrance

With regards to property an Encumbrance is a burden, obstruction, or impediment on the property that lessens its value or makes it less marketable.

Types of encumbrances include mortgages, leases, easements, encroachments, liens and covenants.

An easement is a party’s right to use or improve a portion of a property they do not own. For example, a utility company may need access to gas pipes that run through your property or pedestrians may have the right to use a footpath that goes through your property.

A lien is an encumbrance that affects the title to a property in the form of a security interest. It gives the creditor the ability to seize the property if payments and obligations are not met. A mortgage is one of the most common examples of this.

A restrictive covenant is an agreement that is written into the buyer’s deed of a property that could restrict the future owner. For example, it may include a provision that the façade of a home must be kept intact.