What is an encumbrance?

An encumbrance is a legal claim or interest that someone can have in a property, but it does not give the person ownership of the property. In North Carolina, an encumbrance can take the form of a mortgage, a lien, an easement, or another type of restriction on the use or ownership of the property. When someone takes out a loan to purchase a property, their creditors will likely require them to place a mortgage on the property, which is an encumbrance. This means that the creditors have a legal right to take the property if the borrower fails to pay back the loan. A lien is an encumbrance that is placed on the property by a creditor when the previous owner failed to pay a debt. The creditor has the right to take legal action to claim the property if the debt is not paid off. Easements are a kind of encumbrance that grant an individual access to or rights to use certain parts of a property, while not granting them ownership of the property. For example, a property owner may grant an easement to a gas or electric company to allow them to install power lines on their property. Finally, an encumbrance can also take the form of a restriction, such as zoning laws or deed restrictions, which limit what the property owner can do with the property. These restrictions are designed to preserve the character of a community or to protect the public from certain activities that may be considered dangerous or immoral.

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