National Real Estate Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

Which of the following best describes an encumbrance?

A property that is fully owned without any claims

A claim or liability attached to property

An encumbrance is best defined as a claim or liability attached to a property, which can affect the owner's rights or the property's value. In this context, encumbrances can take many forms, such as mortgages, liens, easements, or restrictions that limit the use of the property in some way. This characteristic is central to understanding property ownership, as it indicates that while an individual may hold legal title to the property, there are other interests or claims that may impose restrictions or obligations on that property.

For instance, if a property has a mortgage, the lender holds an encumbrance on the property that must be cleared before the owner can sell or transfer clear title. Similarly, easements grant others the right to use part of the property for specific purposes, which can limit how the owner may use their land. This is why option B most accurately encapsulates the essence of what an encumbrance is in real estate.

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A type of zoning restriction

A method of financing a property

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