Property Ownership
In New Mexico, an 'encumbrance' on real property is best defined as:
AAn improvement to the property
BAny claim, lien, easement, or restriction that affects or limits the owner's use or title✓ Correct
CA property tax assessment
DA real estate listing
Explanation
An encumbrance is any claim, lien, easement, covenant, or restriction that affects title to or use of real property. Encumbrances may affect value and must be disclosed and often resolved at closing.
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Key Terms to Know
Encumbrance
Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
EasementA non-possessory right to use another person's land for a specific purpose.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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