New York State Real Estate Salesperson Licensing Exam

Which term defines a legal claim against a property that affects ownership?

1. Mortgage

2. Liability

3. Encumbrance

4. Easement

The correct answer is: Encumbrance

The term that defines a legal claim against a property that affects ownership is "encumbrance." An encumbrance is a right or interest in the property that limits the owner's use of it or affects its value. This could include mortgages, liens, and easements, all of which can impose restrictions or obligations on the property. When a property has an encumbrance, it means that there could be other parties who have rights related to that property, which can impact the owner's ability to fully control or transfer ownership without addressing those claims first. This concept is vital in real estate transactions because it helps potential buyers and owners understand any limitations on the property’s title that they need to be aware of. Mortgages are a type of encumbrance specifically related to debt secured by the property. However, encumbrances encompass a broader range of legal claims, including various rights that may exist over the property. Therefore, while a mortgage falls under the umbrella of encumbrance, it does not capture the full extent of what an encumbrance entails. Similarly, liability generally refers to legal responsibility or obligation rather than a claim against property, and an easement is a specific type of encumbrance providing access or use of a part of the property