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An encumbrance is any registered claim, charge, or restriction against a property's title — including mortgages, liens, easements, and restrictive covenants — that can affect ownership rights or the property's marketability.
A title search reveals every registered encumbrance against a property, and a lender needs that full picture before advancing funds — both to confirm the new mortgage will register in the correct priority and to make sure no undisclosed claim, like an unpaid builder's lien or property tax arrears, could take precedence over the new charge.
On a purchase or refinance, discharging any prior encumbrance that shouldn't survive closing — typically the existing mortgage — is a standard closing condition, and outstanding amounts owed against encumbrances being paid out get reconciled in the statement of adjustments.
Revealed through a title search: a current title search in the applicable province's land registry system lists every registered encumbrance affecting the property.
Priority matters: when multiple encumbrances are registered, mortgage priority generally follows registration order, which is why a lender confirms discharge of anything ranking ahead of its new charge.
Discharge is a standard closing step: existing encumbrances that shouldn't survive closing, most commonly a prior mortgage, are typically discharged as part of the transaction and reflected in the statement of adjustments.
Covers more than just mortgages: liens, easements, restrictive covenants, and unpaid property tax arrears are all types of encumbrances a title search can reveal.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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