Any charge or claim on a property that limits the owner's right to deal with it freely: a mortgage, a lease, an unpaid tax, a court attachment or a right of way.
How it works and what to check
A property with an encumbrance can still be sold, but the buyer takes it subject to that claim unless it is cleared first. The commonest is a seller's home loan, closed at or before registration.
The encumbrance certificate shows registered encumbrances. Unregistered ones, like court cases or tax arrears, need separate checks.
Common questions
Can I buy an encumbered property?
Yes, if the encumbrance is cleared at or before the sale, for example by paying off the seller's loan directly to the bank.
What does 'free from encumbrances' mean in a deed?
The seller states that there is no loan, lease, claim or dispute attached to the property.