What Is an Encumbrance?
An encumbrance is any legal right, interest, or claim held by someone other than the property owner that affects the property's use, value, or transferability. Encumbrances are recorded in the public records and are identified during a title search. Some encumbrances, like easements, are permanent features of the property. Others, like mortgages and judgment liens, can be satisfied and removed.
A property can have multiple encumbrances and still be sold, but the buyer needs to know about all of them before closing. That is why the title commitment lists every encumbrance as either a requirement (something that must be cleared) or an exception (something the title insurance policy will not cover).
Florida Legal Context
Under the Florida Recording Act (Chapter 695, Florida Statutes), most encumbrances must be recorded in the official records of the county where the property is located to be enforceable against subsequent purchasers. Unrecorded encumbrances may still be valid between the original parties, but a buyer who purchases without notice of the unrecorded encumbrance is generally not bound by it.
Florida's Marketable Record Title Act (Chapter 712, Florida Statutes) extinguishes certain old encumbrances that predate the root of title. However, easements of record, government liens, and restrictive covenants filed by a common grantor (such as a developer's HOA declaration) survive MRTA and remain enforceable.
Types of Encumbrances
Encumbrances fall into two broad categories:
Financial Encumbrances (Liens)
- Mortgages — The most common encumbrance. The lender holds a lien until the loan is paid in full.
- Property tax liens — Unpaid ad valorem taxes create an automatic lien with priority over nearly all other claims.
- Judgment liens — A court judgment against the property owner creates a lien on all real property in the county.
- Mechanics liens — Contractors, subcontractors, and material suppliers who are not paid can file a lien under Chapter 713, Florida Statutes.
- HOA/condo assessment liens — Unpaid homeowner or condominium association assessments create a lien under the association's governing documents.
Non-Financial Encumbrances
- Easements — A right granted to a third party to use part of the property for a specific purpose, such as utility access or a shared driveway.
- Deed restrictions — Limitations on how the property can be used, often imposed by the original developer.
- Encroachments — A neighbor's structure (fence, driveway, roof overhang) extends onto the property, creating a competing use claim.
Related Terms
- Clear Title — Title free from encumbrances that prevent transfer
- Cloud on Title — An encumbrance that creates doubt about ownership
- Chain of Title — The recorded history where encumbrances appear
- Recording Statute — The law governing when encumbrances take priority
- Title Insurance — Protects against undiscovered encumbrances
How Barnes Walker Identifies Encumbrances
Barnes Walker Title identifies all encumbrances during the title search and lists them on the title commitment. The firm's attorneys review each encumbrance to determine whether it must be cleared before closing (such as a mortgage payoff) or will remain as a permanent condition of the property (such as a utility easement). For questions about encumbrances on a property you are buying or selling, submit a title inquiry.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC