Legal Definitions - incumber

To encumber (sometimes spelled incumber) means to place a claim, liability, or restriction on a piece of real estate. When a property is encumbered, it means that someone other than the owner has a legal right or interest in the property. This right or interest can affect the property's value or how it can be used, even though it typically does not prevent the owner from transferring ownership.

Here are a few examples to illustrate this concept:

• Mortgage on a Home: Imagine a family purchases a house using a loan from a bank. To secure this loan, the bank places a mortgage on the property. This mortgage encumbers the home because it gives the bank a legal claim to the property as collateral. If the family fails to make their loan payments, the bank has the right to take possession of the house through foreclosure. While the family owns the home and can live in it, their ownership is subject to the bank's interest until the loan is fully repaid.

• Utility Easement: Consider a situation where a local power company needs to run underground electrical cables across the back portion of a homeowner's yard to serve other properties. The homeowner grants an easement to the power company. This easement encumbers the property because it gives the utility company a permanent legal right to access that specific strip of land for installation, maintenance, and repair of their cables. The homeowner still owns the entire yard, but they are restricted from building permanent structures (like a shed or an extension) over the easement area, and they must allow utility workers access when necessary.

• Unpaid Property Tax Lien: Suppose a commercial property owner falls behind on their annual property taxes for several years. The local government may then place a tax lien on the property. This lien encumbers the property by creating a legal claim against it for the amount of the unpaid taxes. If the owner decides to sell the property, this lien must typically be paid off from the sale proceeds before the new owner can take clear title, or the new owner would inherit the debt. The lien acts as a financial burden directly attached to the property itself.