Property Ownership

Under Illinois law, which of the following BEST describes an 'encumbrance' on real property?

AA type of deed used to transfer property between family members
BAny claim, lien, restriction, or other interest in property held by someone other than the current owner that may affect the owner's use or transfer of the property✓ Correct
CThe physical boundary markers of a parcel of land
DA government's right to tax real property

Explanation

An encumbrance is any right or interest in real property held by someone other than the fee owner that affects title or limits use. Encumbrances include: liens (mortgages, tax liens, mechanic's liens), easements, deed restrictions/covenants, leases, and rights of way. Encumbrances are disclosed through the title search and title insurance process. Some encumbrances (easements, covenants) run with the land and bind future owners.

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