What is encumbrance?
A claim or liability against an asset by a third party who is not the owner, restricting use, transferability, or value: mortgages, liens, easements, leases, restrictive covenants.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.