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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Any person who, knowing that the real property is encumbered, shall dispose of the same, although such encumbrance be not recorded;
not be subject to any restriction on encumbrance or alienation,' read a portion of the newly signed law, a copy of which was obtained by the BusinessMirror.
"The Commissioner was instructed to 'prepare an accounting of all outstanding encumbrances existing upon the house to be presented to the Court upon the sale.'"
'We are advised that in accordance with admiralty law, the judicial sale will provide the buyer with an internationally recognised ownership title free of mortgage, attachment and all encumbrances,' it said on its website.
"The properties are being sold with all the existing and future encumbrances, whether known or unknown to Sebi.
Although John Mitchel's famous dictum about the Irish Famine is rejected by David Nally, similar sentiments can be found in his Human Encumbrances: Political Violence and the Great Irish Famine.
Featuring an expert English translation and insightful commentary, "Universal Yoga" offers exemplary advice on how to contend and deal with our lives and the inevitable obligations and encumbrances we will all encounter in both ordinary and extraordinary times.
WHAT IT PROTECTS AGAINST: Insurance that covers a property owner from the risk that the title to real estate may contain defects, liens or encumbrances. Without a policy, a homeowner may not be fully protected against errors in the public records, hidden defects not disclosed by the public records, or mistakes made during the examination of the title of your new property.
The sales contract states that the apartment "is free of all in-kind or personal encumbrances, in favour of third parties, and that the developer is the rightful and legal owner thereof".
Right of way (ROW) to be made available to concessionaires free from all encumbrances.
On appeal, the state supreme court emphasized that in valuing real property, any encumbrances that limit ownership rights must be carefully considered.
Kyklos entered into the agreement after it was declared the winning bidder in an auction conducted as part of a sale process under Section 363 of the United States Bankruptcy Code, and will acquire the bearings business flee of substantially all liens, claims, encumbrances, and interests.