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.
Your Room opens on this part of the sale, with the offer and everything before it already ticked.
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See how it worksWhere this comes up in a sale, and what follows
- Buyer's inspection (comes before)
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
In your Room, this word explains itself where it appears.
Your Room defines encumbrance in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.