California Real Estate Practice Exam

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Master the California Real Estate Exam with our comprehensive practice quiz. Get expert tips, detailed content review, and insider strategies to pass on your first try.

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Which statement is true about an encumbrance?

Only liens are considered encumbrances.
Encumbrances do not affect property value.
All encumbrances are the interest of someone other than the title holder.
Encumbrances transfer ownership.

The correct answer is: All encumbrances are the interest of someone other than the title holder.

An encumbrance is a claim or liability that is attached to a property and affects the owner's ability to transfer ownership or affects the value of the property. Liens are one type of encumbrance, but there are other types such as easements, restrictions, and mortgages. Therefore, statement A is incorrect. Statement B is incorrect because encumbrances can reduce a property's value, such as with a mortgage or a restriction that limits the use of the property. Statement D is also incorrect because encumbrances do not transfer ownership, but they can limit or restrict it.