Encumbrance
A claim, lien, charge, or restriction on title that may affect the use or value of the property.
Encumbrances include mortgages, liens (tax, judgment, mechanic’s), easements, and restrictive covenants. A marketable-title obligation in a land-sale contract requires the seller to convey title free of undisclosed encumbrances. Title insurance protects a buyer against undiscovered encumbrances and defects in the chain of title.
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