What are the two main types of encumbrances?

Encumbrances refer to any claim, lien, charge, or liability attached to and binding real property. Understanding the types of encumbrances is crucial in real estate as they affect property rights and interests.

The two main types of encumbrances are liens and easements. Liens are legal claims or rights against a property, typically used as security for a debt or obligation. When a lien exists on a property, it restricts the property owner's ability to sell or transfer the property until the debt is satisfied. Common examples include mortgage liens and tax liens.

Easements, on the other hand, grant the right to use someone else's property for a specific purpose while not conveying ownership. For example, a utility company may have an easement allowing it to install power lines across private property. Easements can enhance property utility, but they also impose limitations on the property owner's use of their land.

The correct answer highlights these essential categories of encumbrances, distinguishing them from other options that involve other legal concepts and terminologies related to property rights.