Encumbrances

Section: Encumbrances Estimated study time: 45 minutes Content: An encumbrance is any claim, lien, charge, or liability attached to real property that affects its title or use. Encumbrances do not prevent the transfer of property but may reduce its value or limit its use. They are broadly divided into financial encumbrances (liens) and non-financial encumbrances (easements, deed restrictions, encroachments). Liens are claims against property for payment of debts; they attach to the title and must generally be satisfied before clear title can be conveyed. Liens are classified as general (attaching to all real and personal property of the debtor) or specific (attaching to a single identified parcel). Voluntary liens (mortgages) arise from the owner's agreement; involuntary liens (tax liens, mechanic's liens, judgment liens) arise by operation of law. Property tax liens in Massachusetts are superior to virtually all other liens including mortgages — they hold "super-priority" status. When real estate taxes are unpaid, the municipality can foreclose on the property. The owner has an equitable right of redemption for one year from the date of the tax sale to reclaim the property by paying the outstanding taxes, interest, and costs. Special assessments (called "betterments" in Massachusetts) are charges for public improvements such as sewer connections or street paving that directly benefit the property; they also attach as specific liens. The municipality records a municipal lien certificate at closing confirming the amount of any outstanding property taxes, water/sewer charges, and betterments — this certificate is required at every closing. Easements are non-financial encumbrances granting the right to use another's land for a specific purpose. Easements appurtenant involve two adjacent parcels: the dominant estate benefits from the easement, and the servient…