What term is used for mortgages, liens, and restrictions that can diminish property ownership?

The term "encumbrance" is accurately defined as any claim, lien, charge, or liability attached to a property that can affect or diminish the rights of the property owner. Encumbrances can include mortgages, easements, and restrictive covenants, which impose certain restrictions on how the property can be used. They are important considerations in real estate transactions because they can impact the property's value and the owner's ability to fully exercise their ownership rights.

Understanding encumbrances is crucial for title agents, as they have a direct effect on property transactions. When performing title searches, identifying encumbrances is essential for ensuring that potential buyers are fully aware of any liabilities tied to the property they are considering. This term encapsulates a wide range of legal interests that can be associated with the property but do not constitute ownership itself.