Understanding Incumbrances in Real Estate: Types, Examples, and Impact on Property Value

Incumbrance refers to any lien, mortgage, or other claim on a property that limits its ownership or use. Incumbrances can be voluntary, such as a mortgage taken out by the owner, or involuntary, such as a tax lien or mechanics' lien.

Examples of incumbrances include:

1. Mortgages and deeds of trust: These are voluntary incumbrances that allow the lender to foreclose on the property if the borrower fails to make payments.
2. Property tax liens: These are involuntary incumbrances placed on the property by the government for unpaid property taxes.
3. Mechanics' liens: These are involuntary incumbrances placed on the property by contractors or subcontractors who have not been paid for work done on the property.
4. Easements: These are voluntary or involuntary incumbrances that allow others to use the property for specific purposes, such as access to a neighboring property or the installation of utility lines.
5. Restrictive covenants: These are voluntary incumbrances that limit the use of the property, such as restrictions on the type of building that can be constructed or the color of the paint used on the exterior.

Incumbrances can affect the value and marketability of a property, and they must be considered when buying or selling real estate. A title search is typically conducted to identify any incumbrances that may exist on a property before it is sold or transferred.