What does it mean to "encumber" a property?

To "encumber" a property refers to placing a burden or restriction on it, which is most commonly seen in the form of a mortgage or lien. This means that the property is subject to certain claims or liabilities that must be addressed. For example, if a homeowner takes out a mortgage to purchase the property, the mortgage lender has a legal claim against the property until the mortgage is paid off. This signifies that the property cannot be sold or refinanced without addressing the claims of the encumbrance. Encumbrances can also include other types of liens, such as tax liens or mechanics' liens, which can affect the property owner's ability to fully utilize or transfer the property.

Other options, such as improving the physical appearance, legally transferring ownership, or conducting an appraisal, do not relate to the concept of encumbrance. Improving a property enhances its marketability but does not place a financial claim on it. Legally transferring ownership involves the title being transferred, while conducting an appraisal is strictly related to assessing value and does not impose any burdens on the property itself.