What is an encumbrance?

An “encumbrance” is a formal obligation on the land, with the most common type being a “mortgage”.

As well as describing the land, a full copy of the title will identify any encumbrances, caveats and notices. Encumbrances are identified on the title (register search statement) under the header “Encumbrances, Caveats and Notices”.

The actual details of an encumbrance are usually provided in a separate document (instrument) associated with the title. Sometimes encumbrances are also marked on the title diagram or plan, such as easements or building envelopes.

Aside from mortgages, the following encumbrances can potentially limit or even prevent certain types of proposals:

• A restrictive covenant is a written agreement between owners of land restricting the use or development of the land for the benefit of others, (eg. a limit of one dwelling or limits on types of building materials to be used).
• A section 173 agreement is a contract between an owner of the land and the council which sets out limitations on the use or development of the land.
• An easement gives rights to other parties to use the land or provide for services or access on, under or above the surface of the land.
• A building envelope defines the development boundaries for the land.

 Derived from Fill out the application form by the State of Victoria