<--Back to Wiki Home

Define Encumbrance in Real Estate

Encumbrance: 

Encumbrance is a term in real estate that refers to any claim or restriction on a property that can affect its value or limit its use. It can be a mortgage, a lien, or an easement, and it may make it harder to sell or transfer the property to someone else.

Example: 

For example, let's say Lisa owns a house, but she has a mortgage on it, which means the bank has a claim on the property until the loan is paid off. The mortgage is an encumbrance because it affects Lisa's ability to sell the house and limits what she can do with it.

"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"

In the world of real estate, where houses abound,
Encumbrances appear, and sometimes confound.
A claim or restriction, that's tied to your land,
Can make it quite tricky, for a sale to be planned.

Lisa had a house, so cozy and bright,
But a mortgage she held, which gave the bank right.
An encumbrance it was, on her property dear,
To sell or transfer, the path wasn't clear.

So remember, my friend, when you're dealing with homes,
Encumbrances can lurk, like sly little gnomes.
Mortgages, liens, or easements at play,
Can limit your options, but don't ruin your day.