All you should know about “encumbrances” in real estate industry

In real estate terminology, encumbrance refers to any limitation, liability or claim filed against property in form of deed restrictions, encroachment, licenses and liens. Encumbrance restricts owner’s capability to transfer real estate’s title or reduces its value while representing some claim or right of another party, individual for using the real estate.

When someone fails paying property or income taxes, leis are filed against the real estate unit and they may come from various directions. In case you’ve had some major work done on the temperature regulation units yet failed paying for these in full, a mechanic can file a lien on your home when listing it for sell. It needs to be paid before changing ownership of a home and this goes for any particular work that has been done on the property for which you haven’t paid.

Non-payment of utility bills or real estate taxes can also result in lien. That being said, homeowner’s association fees and dues must be cleared else you’re likely to find a notice with a lien filed against the owner and his property. Another example is when the city’s government introduce sidewalks and you’ve legally considered some percentage of the cost that remains unpaid is a lien. With all this, knowing about liens and how they work is important.

Losing a lawsuit also results in liens whereby the lawsuit doesn’t even need being related to your property, any harm or claim in against. If you’re sole owner of a home and proprietorship business has been prosecuted, losing it would release a judgement against you which is enforcement of the lien on all the assets including home.

Deed restrictions
Just as the name implies, deed restrictions are mentioned or listed as standards in a document having significance in the court. They’re passed from an owner to another unless terminated. When owner of a property decides to sell and places a restriction in the deed defining all the dos and don’ts on the unit is an encumbrance.

This can be quite upsetting especially when large real estate projects are broken up and sold as mere parts of an estate. If heir(s) to the original owner restricts the land to be used for agriculture or ranching while stopping you from ever having a business on the land, the law or rule passes from an owner to another.

Very common, easements are placed by utilities along the property premises for installation and maintenance of electric, water, sewage and gas lines. Certain streets and roads have easements ruling some of the property along the line in fact; these can be even across property boundaries, limiting ones access openly.

In case a neighbour’s unclear on property boundary and installs a fence within someone else’s premises, it’s an encroachment. Such things are noted during property surveys and title insurance policies unless removed whereas applicable even to older fences that no longer stand.

When investing in real estate in Sharjah, better know about encumbrances so as to take an informed decision however, professional agents come clean with everything in advance saving investors the trouble and headache.

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