Easements and Encumbrances on Property Titles

  1. Easements:  An easement is a legal right granted to a third party (such as a neighbor or utility company) to use a portion of a property for a specific purpose. Common types of easements include:
    • Right-of-way easements, which allow access to neighboring properties or shared resources like a driveway or private road.
    • Utility easements, which grant utility companies access to maintain or install infrastructure such as power lines, water pipes, or sewer lines.
    • Easements typically “run with the land,” meaning they remain in effect even when the property is sold or transferred to new owners.
  2.  Encumbrances: An encumbrance is a claim or liability that affects a property’s title or restricts the owner’s rights. Encumbrances can include: 
    • Liens, which represent a financial claim on a property to secure a debt, such as a mortgage, tax lien, or mechanic’s lien.
    • Deed restrictions, which are limitations placed on the use of a property by a previous owner, such as restrictions on building height, exterior colors, or commercial use.
  3. How to identify and address easements and encumbrances: A thorough title search and examination conducted by a reputable title company can identify any existing easements and encumbrances on a property. Once identified, your clients can:
    • Review the impact of these issues on their intended use of the property.
    • Negotiate with the seller to resolve any outstanding liens or encumbrances before closing.
    • Obtain title insurance to protect against unforeseen title defects or discrepancies.

Thanks to Burg Title, LLC for this helpful, comprehensive summary on Easements and Encumbrances.