Real Estate Word of the Day: Encumbrance
An encumbrance is a claim, lien, charge, or liability attached to and binding real property. It is any right or interest in land that may exist in someone other than the owner, but which will not prevent the transfer of title. Encumbrances can affect the property's value and limit its use.
Types of Encumbrances
Liens
Liens are legal claims against a property, typically used as security for a debt. Common types of liens include:
- Mortgage Liens: These are claims by a lender against a property until the mortgage is paid in full.
- Mechanic’s Liens: Filed by contractors or subcontractors who have performed work on the property but have not been paid.
- Tax Liens: Imposed by the government for unpaid property taxes.
Easements
An easement grants the right to use a portion of the property for a specific purpose without owning it. Examples include:
- Utility Easements: Allow utility companies to run power lines, water pipes, or gas lines across a property.
- Access Easements: Provide a right of way for someone to pass through your property to access their own.
Encroachments
Encroachments occur when a structure or improvement overlaps onto another's property. This can include fences, buildings, or driveways that intrude into neighboring land. Encroachments can lead to disputes and may require legal resolution.
Deed Restrictions
These are private agreements that restrict the use of the real estate in some way. Common in subdivisions, deed restrictions can dictate the types of buildings, architectural styles, and even activities that are permitted on the property.
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