Encumbrance
An encumbrance is a restriction on the owner's right to a property that gives another party a corresponding right. Examples are a lien for a loan, a right of way for the neighbour, a right to run cables and pipes for the municipality, and a right of first refusal for a buyer. The encumbrance follows the property, not the owner, and a buyer takes it over on change of ownership unless it is deleted through registration. Checking encumbrances is a core part of any due diligence in a property transaction.
Encumbrances fall broadly into two groups. Monetary encumbrances secure a monetary claim: a lien under panteloven (the Liens Act), an attachment under tvangsfullbyrdelsesloven (the Enforcement Act), and registered leases with a term of more than ten years. Rights of use, or easements, give a right to use the property in a particular way and are regulated by servituttlova (the Easements Act). An easement can be positive (right of way, right to run cables and pipes, grazing rights, logging rights, fishing rights) or negative (a ban on a particular use or on building, for example a building ban close to a neighbouring property or in the shore zone). A right of first refusal and ground lease agreements are also registered as encumbrances, and some agricultural properties carry a grunnbyrde, a duty to provide something regularly (typically grain, firewood or money) to another property.
In addition, there are statutory liens and compulsory security interests that arise directly from the law without any agreement: the municipality's security interest for unpaid property tax, the housing unit owners' association's statutory lien for unpaid common charges under eierseksjonsloven § 31 (the Housing Unit Ownership Act), and the business charge holder's right to operating equipment. These do not normally appear in Grunnboken, but they can still prevent a clean transfer.
Legal protection is obtained through registration in Grunnboken at Kartverket, or by handover in the case of a possessory pledge. Competing rights are resolved under the principle in tinglysingsloven § 20 (the Registration Act): "first in time, best in right". The day book number is the tiebreaker when several documents are entered on the same day. An encumbrance is deleted by registration of a declaration of deletion from the right holder, or through limitation under foreldelsesloven (the Limitation Act). Under servituttlova §§ 5-7, easements on older properties can be modified (§§ 5-6) or terminated (§ 7) if they have become unreasonably burdensome or have lost their practical value.
On a Grunnboken extract or a certificate of encumbrances you see the encumbrances listed with registration date, day book number, type and text. This list is the starting point for due diligence in a purchase and for the valuation: an encumbrance that restricts use (a negative easement, a restriction on disposal, a building ban) or imposes a burden on the owner (a statutory lien, ground rent, a maintenance duty) reduces both development potential and market value.
In Placepoint, registered encumbrances are shown in the Property panel together with other Grunnboken information.
How this looks in Placepoint
In Placepoint you find this in the Property panel:
From Placepoint's glossary: Heftelse
More information: Lovdata: Servituttlova, Lovdata: Panteloven, Kartverket: What is Grunnboken?, Store norske leksikon: heftelse
English: Encumbrance (registered charge or restriction on real property).
Frequently asked questions
What is an encumbrance on a property?
An encumbrance is a restriction on an owner's right to their property that gives another party a corresponding right. Examples are a right of lien (for the bank), a right of first refusal, a right of use and easements.
Where are encumbrances registered?
Encumbrances are registered in Grunnboken and are visible to all. It is important to check Grunnboken carefully when you buy a property, because encumbrances follow the property, not the owner, when ownership changes.
What is the difference between an easement and a right of lien?
An easement is an encumbrance that gives another party the right to use the property in a particular way, for example a right of way or a right to draw water. A right of lien gives the creditor security in the property.
How is an encumbrance deleted?
Encumbrances are deleted by registration of a deletion, usually when the loan has been repaid (for liens) or when the right has been given up (for other encumbrances). Kartverket must delete the encumbrance.
Can I see the encumbrances on a property?
Encumbrances are public and are found in Grunnboken at kartverket.no. Placepoint also offers access to encumbrance data for properties, which is useful at an early due diligence stage.