What does it mean to have an encumbrance on a property?

Having an encumbrance on a property signifies that there is a claim or liability attached to that property, which can influence its use, value, or transferability. This claim can come in various forms, such as mortgages, liens, easements, or property taxes. Each of these encumbrances may impose certain restrictions on how the property can be utilized. For example, a mortgage requires the owner to make payments, potentially affecting their ability to freely dispose of the property until the loan is settled.

In contrast, having sole ownership without restrictions communicates the absence of encumbrances altogether, meaning the owner has complete control over the property. Including the property in a will or trust pertains to estate planning rather than ownership claims. Finally, appraising a property is a process that assesses its market value and does not necessarily relate to any encumbrances present.