What is classified as an encumbrance?

An encumbrance refers to a legal claim, liability, or restriction on a property that affects its use or transfer. This includes various interests such as liens, easements, and restrictions on how the property can be used. The key characteristic of an encumbrance is that it burdens the property, potentially limiting the owner's rights or the property's value.

Understanding this concept is crucial for anyone involved in real estate, as encumbrances can affect a buyer's decision, a seller's ability to sell, and a lender's willingness to finance a property.

While ownership rights pertain to what one possesses regarding a property, they do not represent the limitations or claims that might encumber that property. Similarly, while mandatory fees owed to the government can affect property ownership, they are a different category entirely, typically related to taxes or assessments rather than encumbrances directly. Lastly, an agreement to sell property is a contract concerning the transaction, not a burden on the property itself. Thus, the most accurate definition among the options provided is indeed a legal claim or interest burdening a property, which encapsulates the essence of what an encumbrance is.