is a right or interest in real estate held by someone other than the owner (or title holder). It is an impediment to free and clear title – although not all encumbrances will adversely affect the transfer of real estate.

Encumbrances are divided into two categories, monetary and non-monetary. Monetary encumbrances (liens) affect the title and may affect the transfer of ownership; whereas non-monetary encumbrances affect the condition of the property and are not likely to interfere with a transfer of title – although some could.