Encumbrance
Any registered charge, lien, restriction, or claim against a land title that may affect the owner's ability to sell or transfer.
An encumbrance is any burden or restriction registered against a parcel of land. Common types include bank charges (where the land is used as loan collateral), caveats, court orders, and government restrictions.
Why It Matters
Buying land with undisclosed encumbrances means inheriting the previous owner's financial or legal obligations. A bank charge, for example, means the lender has a legal claim over the property and can auction it to recover their loan.
How to Check
Encumbrances are revealed through an official search at the Land Registry. Litmus supplements this by checking court records for pending litigation and gazette notices for government actions that may not yet appear on the registry.
Related Terms
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