Owning property is a significant asset, but sometimes, what you own isn’t entirely “yours” in the simplest sense. Hidden beneath the surface of a seemingly clear title can lie encumbrances – legal claims or restrictions that are attached to the property and can affect its value, transferability, or use. Understanding these encumbrances is crucial for any property owner, as they can create significant hurdles during a sale, refinance, or even in your daily enjoyment of the land. At Rocky Rinker Law, we help property owners in Nevada navigate these complex legal issues, ensuring their rights are protected and their investments secure.

What is an Encumbrance?

An encumbrance is a right or interest in a property held by someone other than the property owner. It doesn’t necessarily prevent the transfer of title, but it does “encumber” or burden the property, meaning it can limit the owner’s use or reduce its value. Encumbrances are typically discovered during a title search when a property is being bought or sold.

Common Types of Encumbrances and Their Impact:

1. Liens:

• Definition: A financial claim against a property, typically to secure a debt.
• Examples:
  • Mortgage Liens: The most common type, where the property serves as collateral for a loan.
  • Tax Liens: Placed by government entities for unpaid property taxes.
  • Mechanic’s Liens: Filed by contractors or suppliers who haven’t been paid for work or materials on the property.
  • Judgment Liens: Arise from a court judgment against the property owner.
• Impact: Liens must typically be satisfied (paid off) before a property can be sold with a clear title. They can prevent a sale or refinance until resolved.

2. Easements:

• Definition: A legal right that allows another party to use a portion of your property for a specific purpose.
• Examples:
  • Utility Easements: Allow utility companies (power, water, sewer) to access and maintain lines on your property.
  • Access Easements (Right-of-Way): Grant a neighbor the right to cross your property to access their own.
  • Drainage Easements: Allow water to flow across your property.
• Impact: Easements can limit your ability to build, fence, or landscape in certain areas. They typically “run with the land,” meaning they transfer to new owners.

3. Encroachments:

• Definition: Occurs when a structure or part of a structure (like a fence, shed, or even a tree limb) from an adjacent property extends onto or over your property line without permission.
• Impact: Can lead to boundary disputes, hinder property improvements, and complicate sales. If left unaddressed for too long, an encroachment could potentially lead to a claim of adverse possession.

4. Restrictive Covenants (Covenants, Conditions, and Restrictions – CC&Rs):

• Definition: Rules and limitations on how property can be used, often found in homeowners’ association (HOA) documents or deeds for planned communities.
• Examples: Restrictions on paint colors, fence heights, types of landscaping, or even the number of pets allowed.
• Impact: Can significantly limit your ability to modify or use your property as you wish. Violations can lead to fines or legal action from the HOA.

5. Zoning Ordinances:

• Definition: Local government laws that dictate how land within specific areas can be used (e.g., residential, commercial, industrial) and specify building requirements (e.g., height limits, setbacks).
• Impact: While not technically an encumbrance on the title, zoning laws restrict your property’s use and development potential. Non-compliance can lead to fines or demolition orders.

What to Do About Encumbrances:

• During Purchase: A thorough title search is paramount. Your real estate agent and title company will identify existing encumbrances. Understand their implications before closing.
• Existing Property Owners:
  • For Liens: Work with the party who placed the lien to satisfy the debt. Once paid, ensure a “release of lien” is filed with the county recorder’s office.
  • For Easements: Understand the terms of the easement. While difficult to remove, sometimes they can be modified or terminated with the agreement of all parties involved.
  • For Encroachments: Address them promptly. A property survey can confirm the encroachment. Attempt to resolve amicably with your neighbor, or seek legal counsel if necessary.
  • For Restrictive Covenants: Review your HOA documents carefully. If you wish to challenge a covenant, consult an attorney specializing in HOA law.
  • For Zoning Issues: Contact your local planning department. You may be able to apply for a variance or rezoning if your proposed use is reasonable.

Encumbrances are a fundamental part of property ownership, and while some are benign, others can pose significant challenges. Being aware of their existence, understanding their impact, and knowing the steps to take for resolution are vital for protecting your property investment. Whether you’re buying, selling, or simply living in your home, having a clear understanding of your property’s legal status is empowering. At Rocky Rinker Law, we are committed to helping Nevada property owners navigate these complexities, offering expert legal guidance to ensure your peace of mind and the security of your most valuable assets.