Four Common Encumbrances in Real Estate

When looking to buy or sell real estate it is important to make sure that there are not any problems that could get in the way. These can often be discovered through a title search or other effort. Understanding common types of real estate encumbrances will help you to know if property you own or are interested in buying has any. The following are some of the most common examples of real estate encumbrances to be aware of.

Liens on the Property

Liens are by far the most common type of real estate encumbrance. They are a financial obligation that the owner of the real estate owes to another party, secured by the property itself. This could be a mortgage on the property, where the lender will hold the lien. It can also be from money owed due to back taxes or any number of other things.

Easements on the Property

When a property has a legal easement, it means that another party, or even the public, has the right to use the property in a specific way. Easements transfer with ownership so it may have a big impact on the transaction. Examples of easements include a utility company having the right to have a poll on the property, or a neighbor having the right to use a portion of the driveway to access their property.

Deed Restrictions

Deed restrictions will limit what can take place on the property and may transfer with the sale so they can impact future owners. Most commonly, these are put in place in new property developments, historical districts, and other areas where limitations are needed to maintain the value of this specific property or the area around it. Examples of deed restrictions can include things like where you can park vehicles, whether satellite dishes can be put up, and more.


A license on a property is the permission from the property owner to another person or business to use the property in some specific way. A common example of this is giving your neighbor permission to park their vehicle on your property. Licenses can be either verbal or written agreements. While this type of encumbrance must be addressed, it is not going to cause a major issue because licenses can be revoked or modified at any time.

Always Address Encumbrances Before A Sale

Whether you are buying or selling real estate, it is critical that all encumbrances are identified and addressed before a transaction is completed. In most cases, the encumbrance is not going to be a major obstacle to the sale, but if it is not known ahead of time it can be a violation of the contract. To make sure that everything is handled appropriately, contact Auricchio Law Offices to discuss the specific encumbrances and how to protect the transaction legally.

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Auricchio Law Offices

Auricchio Law Offices in Chicago provides a complete range of real estate services. We facilitate residential and commercial real estate transactions, advise and represent condominium associations, and represent property owners in real estate litigation. Whatever your real estate issue, we will work diligently to achieve your goals in a timely and efficient manner.

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