Final answer:
An encumbrance is a claim or lien on a property that limits the owner's rights or decreases the property's value. It can be a non-government restriction like a restrictive covenant or an easement. Despite encumbrances, property can usually still be transferred.
Step-by-step explanation:
An encumbrance denotes any claim or lien on a property, constituting a limitation on the owner's rights and diminishing the property's overall value. These encumbrances may take the form of non-governmental restrictions, including both restrictive covenants and easements. Restrictive covenants are stipulations embedded in a property deed that impose limitations on its usage. Conversely, easements confer the right to utilize someone else's property for specific purposes.
Both restrictive covenants and easements exert an influence on the title to real estate, impacting the owner's freedom in utilizing or transferring the property. While encumbrances encroach upon the owner's rights, the property typically retains transferability despite their presence. Even with these limitations, real estate transactions can proceed, though potential buyers must consider the encumbrances when evaluating the property's utility and value.
In essence, encumbrances represent encroachments on property rights, introducing conditions that restrict use or access. Despite these limitations, real estate with encumbrances remains transferable, emphasizing the nuanced interplay between property restrictions and the fluidity of real estate transactions.