In real estate, what does the term 'encumbrance' refer to?

The term 'encumbrance' in real estate refers specifically to a claim against a property that can affect its value or usability. This encompasses various legal rights or interests held by someone other than the property owner, which might include mortgages, liens, easements, or restrictions. An encumbrance can limit the owner's ability to transfer the property freely, as these claims must be satisfied or considered in any sale or use of the property. Understanding encumbrances is crucial for anyone in real estate because they play a significant role in determining property rights and potential financial liabilities. Other options, while related to property transactions, do not capture the specific legal implications of encumbrances.