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Encumbrance

A legal right or interest that affects or limits complete ownership and control over a property. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, pending legal action, unpaid taxes or restrictive covenants. An encumbrance does not necessarily prevent transfer of the property to another, but may diminish its value. A title search will usually reveal the existence of encumbrances, and it is up to the buyer to determine whether he or she wants to purchase the property with the encumbrance.

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  • Last edited November 30 2006
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