Illinois Real Estate Practice Exam

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What is a charge or claim that attaches to real property and impairs its value known as?

Encumbrance
Mechanic's Lien
Lien
Statutory Lien

The correct answer is: Encumbrance

An encumbrance is correctly identified as a charge or claim that attaches to real property and can impair its value. This can refer to various types of claims such as mortgages, easements, or liens that can affect the owner's ability to transfer or fully utilize the property. Encumbrances can limit or diminish the marketability and value of the property, as they can impose obligations on the owner or restrict the use of the property. For example, if a property has a mortgage encumbrance, the owner must continue to make payments, which could impact their financial situation and the property's overall desirability to potential buyers. While mechanic's liens and statutory liens are indeed specific types of encumbrances, they do not encompass the broader definition of all claims or charges that can impair property value. Therefore, the most encompassing and accurate term for a charge or claim that attaches to real property is "encumbrance."