What is an Encumbrance?

Published On: 28 October 2022
Buying a block of land? Do you know if any encumbrances are on the property?

When buying property, especially when buying a block of land in a newly developed area, you should ensure that you know about, and understand, the impact of any encumbrances and easements on the property you are interested in.

Encumbrances and easements can have a big impact on what you can and cannot do with the property you are interested in purchasing.

What is an Encumbrance?

Encumbrances are usually registered on a Certificate of Title for newly developed land.

Often encumbrances are set out by the developer of the land to restrict what the property owner can do. For instance you may find encumbrances like these:

  • Inability to re-subdivide your land
  • Particular colours and height of fencing
  • No fencing on the front boundary
  • Minimum or maximum size of your home
  • Set materials your home can be built with, eg: no wooden structures
  • Time frame that your home must be built within
  • Location of airconditioning units and water heaters on the outside of your home
  • Where you can store caravans and boats on the property
  • Requirement to plant a certain number of trees

Encumbrances are usually put in place to ensure the residential development (estate) has a uniform look to preserve the property’s value.

If there are encumbrances on the land you are interested in purchasing, it is a good idea that you understand what they are and how they will impact any decisions you make in the construction of your home and garden.

Encumbrances can be quite different, there is no ‘standard encumbrance’.  It is always best to have your conveyancer explain in detail how they will impact your enjoyment of your property.

Existing home with an Encumbrance

Sometimes already built homes (existing dwelling) have an encumbrance on them that  stays on the Title and is transferred onto new owners.

You must make sure you know of the existence of any encumbrances on the property and that they don’t prohibit your plans for the property.

Other encumbrances are required to be discharged off the Title.

A ‘Lift and Replace’ encumbrance is discharged by the seller of the property (as part of the settlement) and a new encumbrance registered in your name as the new owner, unless there’s a ‘sunset date’ which means the property can be transferred without lifting and replacing the encumbrance.

What is an Easement?

An easement gives someone other than you (the owner of the property) the right to access and use a specific section of your land for a stated purpose. This should be noted in the Certificate of Title. It will show where the easement is located on your property and what the easement provides.

For instance, easements include:

  • Access for the supply of water, electricity, gas
  • Access road
  • The right to walk across land
  • The right to park a vehicle
  • Party walls.

Easements allow authorities like The Council, SA Water and SA Power to access your property (or a part of it) to work on their infrastructure. If you don’t get permission from that authority before building on an easement area you may find that whatever you have done will get removed or damaged if that authority needs to access their infrastructure.

Easements also could be in place to allow your neighbour to access part of your property so they can get to their home, for instance the use of a shared driveway.

Every property is unique, the best advice is to see a Conveyancer or legal representative to make sure your interests are protected.

Strathalbyn Conveyancing welcome your calls about any property queries you have.