encumbrance investment & finance definition
A
lien, charge, or claim that is attached to real property. Properties with
mortgages are encumbered.
See encumbrance in Wall Street Words
- A liability on real property. For example, a mortgage encumbers title to real estate because the lender has an interest in the property. Compare unencumbered.
- A commitment within an organization to use funds for a specific purpose. Thus, a college may encumber funds for later payment to cover expenses associated with a faculty member's trip to recruit new professors.
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