What is an encumbrance?

An encumbrance is a legal right or interest that one person has in the property of another person. It is a claim against the property that affects its value or use. In Washington, an encumbrance typically is a lien or mortgage, which is a claim by a creditor to a property owner for the payment of a debt. Encumbrances can also include a lease, easement, or other agreement that restricts the property owner’s ability to use or sell the property. When a property has an encumbrance, it must be paid off or removed before it can be sold. For example, if there is a lien on the property, the lien must be paid off before it is sold and clear title is given to the buyer. Encumbrances can be beneficial to both owner and creditor because they: 1) ensure that a debt or agreement is taken care of before the property is sold, 2) provide the creditor with a form of security, and 3) allow the owner to keep their property while they pay back the debt.

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