Also known as: encumber · encumbers · encumbered · encumbering · encumbrances · burden on title
Written by attorneys · grounded in primary & secondary sources — see below
A nonpossessory right or interest in real property that burdens title and may reduce its value or marketability. The interest includes mortgages, liens, easements, and covenants but excludes ownership itself.
Eva Espinosa contracted to sell land to Eugene Ellsworth. A recorded mortgage from a prior loan remained on the property at closing. Ellsworth refused to close because the encumbrance created reasonable doubt about marketability of title. The court permitted rescission.
Ethan Evans, a joint tenant, leased his interest to Emerald Enterprises. The lease created an encumbrance on Evans's share. When Evans died, the surviving joint tenant took free of the lease because the encumbrance was extinguished with the life estate.
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Evelyn Ellison, trustee, encumbered trust real estate to secure a personal loan. Beneficiary Emanuel Escobar discovered the conflict and elected to void the encumbrance. The court set aside the transaction because it was not authorized by the trust terms or court approval.
After appointment, personal representative Edgar Evers prepared the estate inventory. For each parcel he listed the fair market value and noted an outstanding tax lien encumbrance. The filing satisfied the statutory duty to disclose all burdens on decedent property.
Equinox Energy's board approved a resolution to encumber corporate real estate as security for new financing. No shareholder vote was required because the transaction fell within ordinary business powers. The mortgage attached immediately upon execution.
Elysium Media purchased oil extracted at the wellhead from a producing lease. An earlier recorded mortgage encumbered the mineral estate. Because the purchase occurred in ordinary course, the buyer took the oil free of the encumbrance under the UCC.
A recorded mortgage, unreleased lien, easement, or covenant that a prudent purchaser would regard as creating reasonable doubt constitutes an encumbrance that renders title unmarketable. The buyer may then refuse to close or seek rescission unless the contract provides otherwise.
In modern jurisdictions the lease does not sever the joint tenancy. The encumbrance lasts only for the term of the lease or until the leasing joint tenant dies, at which point the surviving joint tenants take free of the lease.
A beneficiary may void the encumbrance if the trustee entered the transaction for personal benefit or under a conflict of interest, unless the trust instrument authorized the act or a court approved it after notice.
Within three months after appointment the representative must list each asset with reasonable detail, its date-of-death fair market value, and the type and amount of any encumbrance affecting that asset.
Shareholder approval is not required to mortgage or otherwise encumber corporate assets, whether or not the transaction occurs in the usual course of business, unless the articles of incorporation provide otherwise.
…is inextricably bound by practice to that of the maker and the purchaser must take or leave the automobile, accompanied and encumbered as it is by the uniform warranty. Moreover, it must be remembered that the actual contract was between Bloomfield Motors, Inc., and Claus Henningsen, and that the description of the car…