Encumbrance Definition
An encumbrance is a legal claim or lien on property that affects its title or use. An encumbrance can be created by an agreement between parties, such as a mortgage, deed of trust, lease, or easement. It can also arise from a judicial order, such as a judgment lien or tax lien. Generally, an encumbrance is any right or interest that one party has in the property of another party.
An encumbrance can affect the title to property in two ways: it can either be recorded on the title itself, or it can be unrecorded. A recorded encumbrance is one that appears on the public record, such as a deed of trust or mortgage. An unrecorded encumbrance does not appear on the public record but may still affect the title to the property, such as an easement.
The term ‘encumbrance’ is also used to refer to any claims or liens against property, regardless of whether they are recorded on the title. For example, if someone owes money to a creditor, the creditor may have an unrecorded lien against the debtor’s property.
