Define encumbrances and provide two examples relevant to NS real estate.

• A. Liens (tax or mortgage) and easements or restrictive covenants
• B. Zoning bylaws and building permits
• C. Insurance policies and warranties
• D. Market value fluctuations and depreciation

Answer: (A)

Encumbrances are claims or rights that attach to a property and burden its title, potentially limiting how the property can be used or transferred. They show up on a title and must be addressed during a real estate transaction.

Two common NS examples are liens and easements (or restrictive covenants). A lien creates a security interest for a debt, such as municipal taxes or a mortgage loan, meaning the creditor can claim the property if the debt isn’t paid. Liens stay with the property until they’re paid and discharged. An easement grants someone else a right to use part of the property or imposes limits on its use (for example, utility access or a right-of-way), and a restrictive covenant can limit how the land is used or developed. Both are registered on title and run with the land, so they carry over to new owners. At closing, these encumbrances are disclosed and must be addressed, either by discharge, payment, or negotiation in the purchase agreement.