What is defined as a burden or impediment on property that reduces its value?

The term that is defined as a burden or impediment on property that reduces its value is encumbrance. An encumbrance refers to any claim, liability, or restriction on a property that can affect its transferability or value. This can include easements, liens, and restrictions in the title that might limit how the property can be used or sold.

Encumbrances can impact the owner's rights, making it essential for potential buyers and investors to understand any existing encumbrances before making decisions. For instance, if a property has a lien against it, this legal claim must be resolved before the property can be sold, as the lien typically needs to be paid off.

In contrast, other terms like lien and mortgage represent more specific forms of encumbrances. A lien is a type of encumbrance that indicates monetary claims against the property, while a mortgage is a specific type of lien that secures a loan with the property as collateral. Interest refers to a financial ownership or stake in a property but does not inherently imply a reduction in the property’s value.

Understanding encumbrances is crucial in real estate finance, as they influence property ownership, value, and marketability.