1. Accounting: A contingent liability, contract, purchase order, payroll commitment, tax payable, or legal penalty that is chargeable to an account. It ceases to be an encumbrance when paid-out or when the actual liability amount is determined and recorded as an expense.
2. Real estate: A charge, claim, liability, or regulation that is attached to and is binding upon a property. It may affect the clarity of a good title (see clear title) or may diminish the value of property, but may not prevent transfer of title.
An encumbrance can take several forms: mortgages, claims by other parties, court judgments, pending legal action, unpaid taxes, restrictive deed or loan covenants, easement rights of the neighbors, or zoning ordinances.
Use 'encumbrance' in a Sentence
Every purchase order is entered as an encumbrance on company funds, thereby reserving the use of those funds for a specific purpose.
Taking care of a disabled person is seen by some as an encumbrance, but disabled people are more than their disabilities and are much more than someone who needs caretaking
Even though the backpack is uncomfortable and an encumbrance, the contents are an important and vital part in completing the mission.
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