In real estate, an encumbrance is any legal claim, lien, or restriction on a property that is held by someone other than the owner. It can reduce the property’s value, limit what you’re allowed to do with the land, or create a financial obligation that stays attached to the title when the property changes hands. Most encumbrances fall into one of five categories: liens, easements, restrictive covenants, encroachments, and lis pendens notices. Most residential buyers run into at least one of them before closing.
An encumbrance is not the same thing as a defect that stops a sale. Many properties sell every day with a mortgage, a utility easement, and a set of neighborhood covenants already on the title. The point of understanding encumbrances is to know what you’re taking on, what will come off at closing, and what will follow you into ownership.
Liens: Financial Claims Against the Property
A lien is a financial claim that gives a creditor the right to force a sale of the property if a debt goes unpaid. Liens are recorded in local land records so the public is on notice, and they stay attached to the title until the debt is satisfied or the lien expires.
Liens split into two groups. A voluntary lien is one you agree to. The clearest example is a mortgage: when you borrow to buy a home, the lender records a lien giving it a claim against the property until the loan is paid off, and if you stop paying, it can foreclose and force a sale to recover what you owe.
An involuntary lien is one imposed on you. Several kinds come up often:
- Property tax liens, placed by local governments when owners fall behind on taxes. These almost always take priority over other claims and get paid first out of any sale.
- Federal tax liens, which arise automatically once the IRS assesses a tax and you fail to pay after receiving a demand notice. The IRS generally has ten years from the assessment date to collect, after which the lien expires.1Office of the Law Revision Counsel. 26 USC 6321 – Lien for Taxes2Office of the Law Revision Counsel. 26 US Code 6502 – Collection After Assessment
- Mechanic’s liens, filed by contractors, subcontractors, or material suppliers who performed work on the property and weren’t paid. Filing deadlines vary by state, but the window is typically a few months to a year after the work is completed.
- Judgment liens, created when someone wins a money judgment against you and records it against real estate you own in that jurisdiction. A federal judgment lien lasts 20 years and can be renewed for another 20 if the creditor files before it expires. State-court judgment liens follow state rules and vary.3Office of the Law Revision Counsel. 28 USC 3201 – Judgment Liens
When more than one lien exists on the same property, the general rule is “first in time, first in right.” Property tax liens are the big exception; they jump ahead of most other claims regardless of when they were recorded.
Easements: Someone Else’s Right to Use Your Land
An easement gives a person or entity other than the owner a limited right to use a specific part of the property. It doesn’t transfer ownership. It only permits the use described in the written grant.
There are two main kinds, and the difference matters when a property is sold.
An easement appurtenant benefits a neighboring parcel. If your lot is the only route to a public road, for instance, the neighbor behind you may hold an easement to cross your driveway. This type runs with the land, so it stays attached to both properties no matter who owns them. A new owner inherits the same obligation.
An easement in gross benefits a specific person or entity rather than a neighboring lot. Utility companies hold these to run power lines, gas pipes, or water mains across private property. Because the easement is tied to the holder rather than an adjacent parcel, it doesn’t automatically transfer the way an appurtenant easement does, though commercial easements in gross are often assignable.
A right of way is a specific kind of easement that allows someone to pass through the property. Shared driveways, paths to a public beach, and access roads serving landlocked parcels are common examples, and they typically survive a sale and bind every future owner.
Restrictive Covenants: Private Rules on Use
Restrictive covenants are private agreements written into a property’s deed that control how the land can be used or developed. They’re often grouped under the broader label of Covenants, Conditions, and Restrictions, or CC&Rs, and they’re especially common in planned communities and neighborhoods with a homeowners’ association.
Typical covenants cover paint colors, fence styles, building heights, and whether you can run a business from the home. Because they run with the land, they bind every future owner, not just the person who first agreed to them. The HOA or neighboring owners can enforce them, and a violation can lead to fines or a court order requiring you to bring the property into compliance.
One important boundary: older deeds sometimes contain covenants that restrict ownership or occupancy by race, religion, or national origin. These are unenforceable. The Supreme Court held in 1948 that courts cannot enforce racially restrictive covenants,4Justia. Shelley v Kraemer, 334 US 1 (1948) and the Fair Housing Act makes it unlawful to discriminate in the sale, rental, or financing of housing based on protected characteristics.5Office of the Law Revision Counsel. 42 US Code 3604 – Discrimination in the Sale or Rental of Housing The language may still appear in the recorded document, but it has no legal effect.
Encroachments: Physical Crossings of the Boundary
An encroachment happens when a structure or feature from one property physically crosses onto a neighboring one. A fence built a few inches over the line, a shed that partly sits on the adjacent lot, an overhanging roof, and tree branches extending across the boundary are all common examples. Unlike liens and easements, encroachments usually aren’t recorded. They’re found through a physical inspection or a professional survey.
Small encroachments get ignored for years, but letting one sit creates risk. If the encroaching party uses the land openly and continuously for long enough, they could eventually claim ownership through adverse possession. The required period varies by jurisdiction, generally somewhere between 5 and 20 years depending on whether the possessor has a claim of title. Resolving an encroachment usually means removing the structure or negotiating a written easement that formally allows it to stay.
Lis Pendens: Notice of a Pending Lawsuit
A lis pendens is a recorded notice telling the public that a lawsuit affecting the property’s title is pending. It doesn’t create a lien or move any ownership, but it effectively freezes the property’s marketability. Anyone who buys or lends against the property after the notice is recorded takes title subject to the outcome of the suit, which means a ruling against the seller can wipe out the buyer’s interest.
Ownership disputes, divorce proceedings involving the marital home, and foreclosure actions all commonly trigger a lis pendens. The notice sits in the public records until the case is resolved or a court orders it removed, and most buyers and lenders won’t move forward on the property until it’s cleared.
How to Find Encumbrances Before You Buy
Catching encumbrances before closing takes two steps: a review of the public records and a look at the physical property. Skipping either one can leave you with a surprise lien, a neighbor’s easement, or a boundary problem you didn’t know existed.
Title Search
A title search is an examination of recorded documents — deeds, mortgages, court judgments, tax records, and other filings — kept by the local government. A title professional traces the chain of ownership and flags any liens, easements, or other recorded encumbrances still affecting the property. The fee is part of a buyer’s closing costs and varies with the property’s history and the jurisdiction.6CFPB. What Are Title Service Fees
Land Survey
A professional land survey produces a detailed map of the property’s physical boundaries and the structures on it. A licensed surveyor verifies that fences, buildings, driveways, and other improvements fall within the legal lines, and identifies encroachments from neighboring parcels. A survey can also show the physical location of utility easements or rights of way that aren’t otherwise obvious.
Title Insurance
Even a careful title search can miss hidden problems like a forged deed, an undisclosed heir, or an unrecorded lien. Title insurance covers these risks, and there are two kinds that protect different people.
- A lender’s policy, which most mortgage lenders require. It protects the lender’s investment if a title defect surfaces after closing. The coverage amount equals your loan balance and shrinks as you pay down the mortgage.7CFPB. What Is Owners Title Insurance
- An owner’s policy, which protects you if someone later asserts a claim against the property from before you bought it. It covers the full purchase price and lasts as long as you or your heirs own the property. It’s optional in most states.7CFPB. What Is Owners Title Insurance
A standard policy typically excludes defects that a physical inspection or survey would have shown, such as encroachments, boundary disputes, or unrecorded easements. Extended coverage removes many of those exclusions at a higher premium. If a survey turns up anything questionable, extended coverage is worth a look.
How to Remove an Encumbrance
Buying a property with an encumbrance doesn’t mean you’re stuck with it. The right tool depends on the kind of encumbrance.
Lien Release
Once you pay off the underlying debt, the creditor is required to file a release or satisfaction with the local recorder’s office, which clears the lien from the public record. If the creditor doesn’t file, you may need to contact them directly or ask a court to clear the title.
Quiet Title Action
A quiet title action is a lawsuit asking a court to declare who owns the property and to eliminate any competing claims. People use it to clear an old unresolved lien from a previous owner, fix a cloud caused by a recording error, or settle a boundary dispute. The court reviews the claims and issues a judgment that silences the adverse interest.
Terminating an Easement
Easements can be hard to remove because many are meant to be permanent, but several routes exist:
- Release. The easement holder signs a written document giving up the rights, and it’s recorded.
- Merger. If one person acquires both the benefiting and the burdened properties, the easement disappears because the same owner holds both sides.
- Abandonment. The holder stops using the easement and takes clear steps showing they intend to give it up for good. Non-use alone, even over many years, generally isn’t enough.
- End of necessity. An easement created because a parcel had no other access can end once an alternative route is available.
Whichever route applies, record the termination in the public land records so future title searches reflect the change.