California Real Estate Practice Exam

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Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

Practice this question and more.

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.