When you started your property hunt, you probably expected your search to end with your owning and fully controlling it. Unfortunately, as you go through the buying process, you could discover that certain factors may prevent you from having full control and ownership of the property.
Encumbrances are not necessarily unusual, but they can prove frustrating. These items may limit your use of the property or your ability to sell the property at some point in the future. It’s vital to understand the impact of any encumbrances on the property before you close the deal. The two types of encumbrances you may discover are liens and easements.
Let’s look at liens first
Liens will certainly affect your ability to purchase the property. The seller will need to resolve them prior to closing unless you make other arrangements. The types of liens the property may have include the following:
- Mechanic’s liens
- Income tax liens
- Property tax liens
- Ownership or interest in ownership claims
- Past due child support
- Past due homeowners’ association dues
There could be other claims to the property not listed above, but these tend to be the most common. If not resolved, liens would definitely hinder you from selling the property.
Now let’s look at easements
Easements allow someone else to use part of the property. The most common type is a utility easement, which is necessary for the property to have electricity, water, gas, cable and more. Another type of easement seen more often than others allows the owner of property adjacent to the one you want to buy to cross over it. This ordinarily happens when a piece of property is situated in such a way that the owner cannot access it directly from a roadway.
Other easements could also be on the property, and you will need to determine whether they will substantially interfere with your use and enjoyment of the property or not. You may be able to terminate some easements, but others cannot. On the other hand, you may also create easements on the property depending on the circumstances.
Examining the encumbrances
It is crucial that you investigate and understand the impact of any of the above encumbrances that may be on the property before deciding to purchase it. You don’t want to buy the property and then discover you have one of the aforementioned issues. An attorney could review any encumbrances, advise you of your rights and tell you what your legal options are regarding them.