Encumbrance
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Encumbrance

1. In accounting, an amount of money that one is required to spend on a stated thing in the future. For example, a portion of the proceeds of a sale may be encumbered to pay for the cost of goods sold.

2. In real estate, any claim of ownership that may cloud the legitimacy of a sale. See also: Bad title.

encumbrance

1. A liability on real property. For example, a mortgage encumbers title to real estate because the lender has an interest in the property. Compare unencumbered.

2. A commitment within an organization to use funds for a specific purpose. Thus, a college may encumber funds for later payment to cover expenses associated with a faculty member's trip to recruit new professors.

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Encumbrance (redirected from Encumbrances)

Encumbrance
(redirected from Encumbrances)