encumbrance
An outstanding claim that is registered against a property for money owing. This does not necessarily mean that payment is overdue, simply that the total amount has not been paid. The purpose of the encumbrance is to allow a third party to recover their money if you do not make your payments.
For example, if you have a furnace installed and are making several payments for the installation, the company may put an encumbrance (called a “mechanics lean”) on your property. This protects their right to recover the furnace if you do not make your scheduled payments. Other examples of why you may have an encumbrance include a work order from the city (if your home is not up to code), a mortgage, an unpaid utilities bill, and unpaid taxes.
When buying a property, your lawyer will inform you of all encumbrances, and you will have to decide how to proceed with each one. You may choose to simply accept it, or you may wish to change your offer to account for the encumbrance. The exact remedy is a matter between the Buyer and the Seller.
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