Encumbrances and Encroachments: Texas Exam Guide

Encumbrances are the burdens that ride along with a property. Some cost money, like a mortgage or a tax lien. Some limit what you can do, like an easement or a deed restriction. The exam wants you to sort them, and to know what an encroachment is and how it gets found.

What is an encumbrance?

Snippet answer: An encumbrance is any claim, lien, charge, or right that attaches to real property and either limits its use or reduces its value. An encumbrance burdens the title but does not stop the owner from selling. A buyer usually takes the property subject to any encumbrances that are not cleared before closing.

An encumbrance is a burden on real property held by someone other than the owner. It can be a financial claim, like a loan secured by the land, or a limit on use, like a right of way. What all encumbrances share is that they burden the property but do not block a sale. The owner can still transfer title, but the buyer takes the land with the burden attached unless it is released first.

That is why encumbrances matter so much at closing. A title commitment lists them as exceptions, and the parties decide which ones get cleared and which ones the buyer accepts. An encumbrance that is not cleared can be a cloud on the chain of title.

Money encumbrances vs non-money encumbrances

Snippet answer: Encumbrances come in two families. Money encumbrances are liens, which are financial claims like a mortgage, a property tax lien, a judgment lien, or a mechanic's lien. Non-money encumbrances limit use rather than secure a debt, and include easements, deed restrictions, encroachments, licenses, and profits. All liens are encumbrances, but not all encumbrances are liens.

The cleanest way to organize the topic is to split encumbrances into two groups by what they do.

The exam loves one relationship here: all liens are encumbrances, but not all encumbrances are liens. A lien is a money claim that can lead to a forced sale if the debt is not paid. An easement or a deed restriction is not a lien, because it limits use rather than securing a debt.

Two smaller non-money terms round out the list:

• License. Revocable permission to use land, which is not a true interest in the property. Easements and licenses are compared in the easements guide.
• Profit. A right to enter another's land and take something from it, like timber, gravel, or minerals. A profit allows removal, while an easement only allows use.

Encroachments: when a structure crosses the line

Snippet answer: An encroachment is a building, fence, driveway, or other improvement that extends over a boundary onto a neighbor's land or into an easement or setback. It is a form of trespass and a title defect. A current survey is the standard way to discover an encroachment, and left alone it can ripen into a prescriptive easement or adverse possession.

An encroachment is a physical intrusion. A fence built three feet over the line, a driveway that crosses onto the lot next door, or a roof overhang that hangs above a neighbor's yard are all encroachments. Because the structure sits where it does not belong, an encroachment is a kind of trespass and a defect that can cloud title.

The way encroachments get discovered is a survey. This ties encroachments to legal descriptions and surveys, because only a measured survey shows exactly where the boundaries and the structures fall. In Texas, a title company relies on a survey and a signed affidavit to decide whether it will give area and boundary coverage, so an encroachment found before closing can be handled instead of becoming the buyer's surprise.

Time matters with encroachments. If one is left in place long enough, it can mature into a right. A long, open, and adverse encroachment can ripen into a prescriptive easement, and a possessory one can support an adverse possession claim. That is why a small encroachment is worth resolving early rather than ignoring.

Deed restrictions, restrictive covenants, and CC&Rs

Snippet answer: Deed restrictions, also called restrictive covenants or CC&Rs, are private limits on how land can be used, placed in a deed or a recorded subdivision declaration. They run with the land and bind future owners. A developer, a property owners association, or another lot owner can enforce them, usually by asking a court for an injunction.

Deed restrictions are private rules that owners agree to, not government rules. A developer records a declaration of covenants, conditions, and restrictions (CC&Rs) for a subdivision, and every lot buyer takes title subject to them. Typical restrictions set minimum home sizes, ban commercial use, control fences and paint colors, or require architectural approval.

The key features for the exam:

• They run with the land. A deed restriction binds not just the first buyer but every future owner of the lot.
• They are private, not public. Deed restrictions come from the developer and the owners, unlike zoning, which comes from the government.
• They are enforced privately. A property owners association, the developer, or a neighboring owner can sue to enforce them, most often by seeking an injunction to stop a violation.
• They cannot be discriminatory. A restrictive covenant based on race is unenforceable, and covenants must comply with fair housing law.

The Texas rule: covenants are liberally construed, and Houston runs on them

Texas gives restrictive covenants real strength. Under Texas Property Code Section 202.003, a restrictive covenant is liberally construed to give effect to its purposes and intent. That is a pro-enforcement rule, and it applies broadly to Texas covenants.

Nowhere is this more visible than in Houston, the largest city in the United States with no traditional zoning. Houston voters rejected zoning more than once, so the city leans on private deed restrictions to shape land use. Texas even allows the City of Houston to help enforce private deed restrictions, which is unusual, since deed restrictions are normally a private matter. For the exam, the takeaway is that in Texas, deed restrictions do heavy lifting, and courts read them to give effect to their intent.

Deed restrictions vs zoning: the more restrictive one wins

Snippet answer: When a private deed restriction and a public zoning rule both apply to the same property and they conflict, the more restrictive one controls. Zoning sets a floor of public rules, and a deed restriction can be stricter. Neither cancels the other, so an owner must follow whichever rule limits the land more.

A property can be governed by both a deed restriction and a zoning ordinance at the same time. When they say different things, the rule is simple and heavily tested: the more restrictive one wins.

Say zoning allows a duplex, but the subdivision's deed restrictions allow only single-family homes. The owner is held to single-family use, because the deed restriction is stricter. Now flip it. If zoning bans commercial signs but the deed restrictions are silent, the owner still cannot post the sign, because the stricter public rule controls. Public zoning is covered as a police power in the land-use materials, and deed restrictions are the private layer that can tighten it further.

How encumbrances affect marketable title and closing

Snippet answer: Encumbrances shape whether title is marketable. Money liens generally must be paid off or released at closing so the buyer takes clear title. Many non-money encumbrances, like normal utility easements and standard deed restrictions, are accepted as permitted exceptions. A survey and the title commitment together show the buyer what burdens the property.

Encumbrances decide what a buyer is really getting. The goal is marketable title, meaning title a reasonable buyer would accept without fear of a lawsuit.

• Liens usually get cleared. A mortgage payoff, unpaid taxes, or a judgment lien is typically paid and released at or before closing, so the buyer is not stuck with the seller's debt.
• Some use encumbrances are accepted. Ordinary utility easements and standard subdivision deed restrictions are common and are usually accepted as permitted exceptions rather than defects.
• Surprises are the problem. An unexpected encroachment, an unrecorded easement, or a violated deed restriction can make title unmarketable until it is resolved.

The tools that reveal all of this are the title commitment and a current survey. Together they tell the buyer which burdens ride with the land, which is why an agent should make sure both get reviewed before closing.

Common exam traps to remember

Snippet answer: Encumbrance questions punish a few confusions: thinking every encumbrance is a lien, forgetting deed restrictions run with the land, missing that the more restrictive rule wins over zoning, and mixing up an encroachment with an easement.

• Not every encumbrance is a lien. All liens are encumbrances, but easements, deed restrictions, and encroachments are not liens.
• Deed restrictions run with the land. They bind every future owner, not just the first buyer.
• The more restrictive rule wins. Between a deed restriction and zoning, the stricter one controls.
• An encroachment is not an easement. An encroachment is a trespass found by survey, while an easement is a permitted right to use.
• Encumbrances do not block a sale. They burden the property, but the owner can still transfer title.

You can drill these against timed Texas questions in the free practice test, and look up any unfamiliar term in the Texas real estate glossary.

Original practice questions

Use these to check yourself. They are written for practice and are not copied from any real exam.

Question 1. Which of the following is an encumbrance but is not a lien?

• A) A mortgage
• B) A property tax lien
• C) A utility easement
• D) A judgment lien

Answer: C. A utility easement is a non-money encumbrance that limits use, not a lien. The other three are money encumbrances that secure a debt. All liens are encumbrances, but not all encumbrances are liens. (Original question.)

Question 2. A homeowner's new fence is built two feet over the property line onto the neighbor's lot. What is this, and how is it usually discovered?

• A) An easement, discovered in the deed
• B) An encroachment, discovered by a survey
• C) A license, discovered at closing
• D) A profit, discovered by the appraiser

Answer: B. A structure that crosses onto a neighbor's land is an encroachment, a form of trespass. A current survey is the standard way to discover it, because only a survey shows where the boundaries and the fence actually fall. (Original question.)

Question 3. In a Texas subdivision, the deed restrictions allow only single-family homes, but city zoning would allow a duplex. What may the owner build?

• A) A duplex, because zoning controls
• B) Only a single-family home, because the more restrictive rule controls
• C) Either one, the owner chooses
• D) Nothing, because the rules conflict

Answer: B. When a deed restriction and zoning conflict, the more restrictive rule wins. The single-family deed restriction is stricter than the zoning, so the owner is limited to a single-family home. (Original question.)

Question 4. Under Texas Property Code Section 202.003, how are restrictive covenants construed?

• A) Strictly against the association in every case
• B) Liberally, to give effect to their purposes and intent
• C) They are automatically unenforceable after ten years
• D) Only if a city adopts them as zoning

Answer: B. Texas Property Code Section 202.003 says a restrictive covenant is liberally construed to give effect to its purposes and intent. This is a pro-enforcement rule, and it is one reason deed restrictions are powerful in Texas. (Original question.)

Frequently Asked Questions

For quick answers to every common Texas exam question, see the Texas real estate exam FAQ.

What is an encumbrance in real estate?

An encumbrance is any claim, lien, charge, or right attached to real property that limits its use or lowers its value without stopping a sale. Encumbrances include money claims like mortgages and tax liens, and non-money burdens like easements, deed restrictions, and encroachments. A buyer takes the property subject to any encumbrances not cleared before closing.

What is the difference between an encumbrance and a lien?

A lien is a type of encumbrance that secures a debt, such as a mortgage, a tax lien, or a mechanic's lien. An encumbrance is the broader category and also includes non-money burdens like easements and deed restrictions. The rule to remember is that all liens are encumbrances, but not all encumbrances are liens.

What is an encroachment?

An encroachment is a building, fence, driveway, or other structure that extends over a boundary onto a neighbor's land or into an easement or setback. It is a form of trespass and a title defect. A current survey is the standard way to find an encroachment, and if left in place it can ripen into a prescriptive easement or adverse possession.

What are deed restrictions?

Deed restrictions, also called restrictive covenants or CC&Rs, are private limits on how land can be used, recorded in a deed or a subdivision declaration. They run with the land and bind future owners. A developer, a property owners association, or a neighboring owner can enforce them, usually by asking a court for an injunction.

Do deed restrictions or zoning control when they conflict?

When a private deed restriction and a public zoning rule conflict, the more restrictive one controls. Zoning is a floor of public rules, and a deed restriction can be stricter. Neither cancels the other, so the owner must follow whichever rule limits the property more.

Why does Houston rely on deed restrictions?

Houston is the largest city in the United States without traditional zoning, because its voters rejected zoning more than once. Instead, it relies heavily on private deed restrictions to shape land use, and Texas law even lets the city help enforce them. Under Texas Property Code Section 202.003, restrictive covenants are liberally construed, which makes them powerful statewide.

Sources and Methodology

This article was reviewed against Texas primary sources and standard real estate principles on July 21, 2026. The definition of an encumbrance as a burden that limits use or value without preventing transfer, the split between money encumbrances (liens) and non-money encumbrances (easements, deed restrictions, encroachments, licenses, and profits), and the rule that all liens are encumbrances but not all encumbrances are liens reflect settled property law tested on the national portion of the exam. The definition of an encroachment as a structure crossing a boundary, discovered by survey, and the way a long encroachment can ripen into a prescriptive easement or adverse possession, reflect Texas boundary and limitations law. The rule that restrictive covenants are liberally construed to give effect to their purposes and intent comes from Texas Property Code Section 202.003. The point that Houston is the largest United States city without traditional zoning, relying on private deed restrictions that Texas law lets the city help enforce, reflects Texas land-use practice and the Houston development framework. The principle that the more restrictive of a deed restriction or a zoning rule controls reflects standard real estate law. Statutes, ordinances, and case law can change, so verify the current Texas sources before relying on any point in practice.

Official Source Links

• Texas Property Code Chapter 202 (Construction and Enforcement of Restrictive Covenants)
• Texas Property Code Section 202.003 (Construction of Restrictive Covenants)
• Texas Property Code Chapter 209 (Texas Residential Property Owners Protection Act)
• TREC: Become a Real Estate Sales Agent

This post is educational content for Texas real estate sales agent candidates. It is not legal advice. Whether a claim burdens a property, and how it affects a sale, depends on the documents, the survey, and current law, so confirm the current Texas Property Code and Texas case law and consult a licensed attorney before you rely on any point in a real situation.