Real Estate Investing

Encumbrance

Definition

What is Encumbrance?

A legal claim, restriction, mortgage, lien, or other burden affecting property.

Example in practice

The title search reveals an unpaid mortgage on the land.

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Land and buildings held for use, rental income, development, or appreciation.

Property designed mainly for people to live in.

Property used for business purposes, such as offices, shops, or warehouses.

A REIT performance measure that adjusts net income for real-estate depreciation and certain property-sale gains.

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