Encumbrance

Encumbrance is an outstanding charge or liability on a property, which limits its use or prevents full transfer of ownership. Mortgages, easements, unpaid taxes, and pending legal actions are all forms of encumbrance. It also includes circumstances that may defeat the title, such as structure alterations and charging orders. Any legal right or interest over the property by a third party is considered an encumbrance. They do not affect the conveyancing process, but must be clearly specified in the property's Certificate of Title. A property that is free of encumbrance is said to have a clear or free title.