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Encumbrance refers to any legal claim or liability that is attached to a property. It can limit the owner’s ability to use the property or transfer ownership until the encumbrance is lifted.

Types of encumbrances can include:

  1. Mortgages: This is the most common type of encumbrance, where a property serves as collateral for a loan. The property cannot be sold without the mortgage lender’s agreement unless the loan is paid off.
  2. Liens: These are legal claims against a property due to the owner’s unpaid debts, such as a tax lien for unpaid taxes.
  3. Easements: These are rights given to other parties to use portions of the owner’s property in a certain way. For example, a utility company might have an easement to install and maintain power lines.
  4. Restrictions and Covenants: These are conditions placed on a property by a previous owner, a homeowners’ association, or the government. For example, a property might have a restriction against certain types of construction.

In a tenants in common arrangement, each tenant owns a distinct, undivided share of the property, and each owner’s share could potentially have its own encumbrances. These encumbrances might affect that owner’s ability to sell or transfer their share of the property or could impact the entire property if not properly handled.