Which of the following best defines encumbrances?

• A. Legal claims or rights affecting a property.
• B. Non-mortgage related property improvements
• C. A lease-only arrangement
• D. An environmental hazard report

Answer: (A)

Encumbrances are legal claims or rights that burden a property and can limit its use or transfer. They include items like liens (mortgages, property taxes), easements that give others a right to cross or use part of the property, and restrictive covenants or other interests that run with the title. Because these attach to the property, they typically stay with it when ownership changes and must be disclosed in a sale or title search. The other options describe things that aren’t claims or rights against the title: improvements add value to the property, a lease is an occupancy arrangement rather than a title claim, and an environmental hazard report documents potential issues rather than a title burden. So the best definition is legal claims or rights affecting a property.