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Encumbrance
Real Estate Investing Definition

The definition of Encumbrance is:

A legal right or interest in land that affects a good or clear title and diminishes the land's value. It can take numerous forms such as zoning ordinances easement rights claims mortgages liens charges a pending legal action unpaid taxes or restrictive covenants. An encumbrance does not legally prevent transfer of the property to another. A title search is all that is usually done to reveal the existence of such encumbrances.

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