As a property owner, there are many issues and incidents that can arise unexpectedly, and you will have no choice but to deal with them. While you may initially be concerned by more obvious potential issues such as mortgage commitments, renovation work and protecting your home from fire or flood risks, another potential issue is an encumbrance.
An encumbrance is a claim made against a property by a party that it is not an owner. When an encumbrance is in place, it will likely prevent you from freely using the property or transferring ownership. You will need to be proactive in order to successfully lift the encumbrance. If you are feeling stressed or worried because someone has made a claim against your property, your first step should be to understand the nature of the encumbrance so that you can take the appropriate action. The following is an overview of some of the most common types of encumbrances that can be made against properties.
If you fail to make a payment for a service or tax, failure to satisfy this debt could result in a lien made against your home. For example, let’s say that you had an extensive heating system put into your home, but you failed to pay the costs of this. The service provider could decide to take legal action and have a lien placed against you. This means that a portion of your home essentially belongs to the person who filed the lien.
Deed restrictions could have been made by the owner of the property generations ago, but these deed restrictions can remain in place forever. These restrictions could prevent you from doing certain things to the property.
If your neighbor erects a fence believing that is on their property but it is, in fact, on yours, this is known as an encroachment. This could prevent you from getting a fair price for your property.
If your property is encumbered, it is important that you take swift legal action to remedy the situation.