California Real Estate Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

An encumbrance refers to a claim, lien, charge, or liability attached to and binding upon real property. Among the choices provided, a lease agreement fits this definition because it grants the lessee a right to use and occupy the property for a specified period while creating a claim against the property that remains in effect regardless of the ownership. This means the property owner must adhere to the terms of the lease, making it a restriction on the owner's rights.

In contrast, a freehold estate represents ownership interest in real property that is typically not encumbered and does not restrict the owner's rights. A homestead is a legal designation that certain properties may receive, which can offer some protection against creditors but does not itself constitute a claim against the property. A recorded subdivision map details the layout of subdivided land but doesn’t impose any claims or restrictions in the way an encumbrance does.