Definition
An encumbrance is any legal claim against your property—think of it as other people's rights or interests that affect your ownership. Mortgages, liens, easements, even restrictive covenants are encumbrances. They don't necessarily prevent you from using your property, but they do affect your ability to sell or refinance cleanly.
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Encumbrances include mortgages, liens, easements, and covenants. They affect marketability and financing. Must be identified in title search and resolved before sale.
Pro Tip
Get a title search before buying and thoroughly review all encumbrances. Some are minor; others can dramatically affect property value and your financing options. Don't skip this step.
Example
Property with mechanic's lien encumbrance from unpaid construction work.