Easements, Encroachments and Liens: Property Rights Basics
The short answer: All three are encumbrances, meaning something that burdens a property's title or use without ending the owner's ownership. An easement gives someone else a right to use part of the land, such as a utility line or a shared driveway. An encroachment is something that crosses a boundary, like a fence or shed over the property line. A lien is a money claim against the property, such as a mortgage, unpaid taxes or a court judgment. In a sale, liens usually get paid off at closing, easements usually stay with the land, and encroachments get resolved or accepted before closing.
PSI lists all three under "Encumbrances" in the Property Ownership section of the exam (PSI candidate bulletin). They come up in real deals too, usually when the title search or survey comes back. For quick definitions of other terms, see our NJ real estate glossary.
What is an easement?
An easement is a right to use someone else's land for a specific purpose. The owner still owns the land, but has to allow that use. Common examples in New Jersey neighborhoods are utility easements along a lot line, a shared driveway between two houses, or a path to a beach or lake in a shore or lake community.
The two types you need to know:
- Easement appurtenant. It benefits a neighboring parcel. The land that benefits is the dominant estate, and the land that carries the burden is the servient estate. Example: your neighbor has a right to cross your side yard to reach their garage. When either house sells, the easement generally goes with it.
- Easement in gross. It benefits a person or company, not a neighboring parcel. Utility easements are the classic example.
Easements are most commonly created by a written grant in a deed or other recorded document. Courts can also recognize easements by necessity (a lot with no other access) or by long-term use. Whether one exists is a question for an attorney, not the agent.
Don't confuse an easement with a license. A license is personal permission to use land, like letting a neighbor park in your driveway, and it can usually be revoked. Our property ownership exam guide covers that distinction along with the rest of the outline.
Why do easements matter in a sale?
Most easements are harmless, and many help the property, like the one that brings in electric service. But some limit what a buyer can do. A buyer who wants to put in a pool or an addition needs to know whether a utility or drainage easement runs through that part of the yard.
Easements usually turn up in the title search, which checks the public records for claims and interests affecting the property (our title insurance explainer). A recorded easement normally stays with the land after the sale, so the buyer's attorney reviews it and the buyer decides whether it's acceptable.
What is an encroachment?
An encroachment is a building, fence, driveway or other improvement that extends onto a neighbor's land or into an easement or setback. A shed two feet over the line, a neighbor's driveway that clips the corner of the lot, or a deck built over a utility easement are all encroachments.
They're usually found in a survey, not in the title records, because the public record shows where the line is supposed to be, not where the fence actually sits. New Jersey's state buyer guide lists a land survey among the inspections and certifications a buyer may need (NJ DOBI buyer guide).
Common ways encroachments get handled before closing:
- The owner moves or removes the improvement.
- The neighbors sign a written agreement or the affected owner grants an easement, prepared by attorneys and recorded.
- The buyer accepts it, often with the title policy listing it as an exception.
Can a long-standing encroachment become ownership?
Sometimes. That's adverse possession, which PSI lists as a "potential encumbrance" (PSI bulletin). In New Jersey, the statute says 30 years of actual, uninterrupted possession of real estate (60 years for woodlands or uncultivated tracts) vests full title in the possessor and bars claims to recover it (N.J.S.A. 2A:14-30). Courts apply additional requirements to these claims, so whether a specific fence line has become ownership is a question for an attorney. For the exam, remember the 30/60-year numbers.
What is a lien, and what kinds show up in NJ?
A lien is a claim against property that secures a debt. If the debt isn't paid, the lienholder may be able to force a sale. The key split for the exam:
- Voluntary vs. involuntary. A mortgage is voluntary, since the owner agreed to it. Tax liens, judgment liens and construction liens are involuntary.
- Specific vs. general. A specific lien attaches to one property (a mortgage, a property tax lien). A general lien can reach all of a debtor's property (a court judgment).
How three common involuntary liens work in New Jersey:
| Lien | NJ rule | Source |
|---|---|---|
| Property taxes | Taxes on land are "a continuous lien on the land," and later taxes, interest, penalties and collection costs are added to it | N.J.S.A. 54:5-6 |
| Court judgments | A Superior Court judgment binds real estate from the time it's actually entered on the court's records | N.J.S.A. 2A:16-1 |
| Construction liens | A contractor, subcontractor or supplier lodges a lien claim within 90 days after its last work or materials. For a residential construction contract, the deadline is within 120 days of last work, and a claim generally follows an arbitration step first | N.J.S.A. 2A:44A-6 |
Worth knowing as an agent: a seller in a dispute with a contractor over a recent renovation may have a lien claim coming, even if nothing shows up yet.
How are liens handled at closing?
Liens are the encumbrance buyers and lenders care about most, because a buyer doesn't want to inherit the seller's debts. Most NJ purchase agreements are conditioned on a title search showing no liens or judgments against the property. If someone else has a claim, the seller's title isn't "clear," and the buyer isn't obligated to finish the purchase. The buyer's attorney evaluates the title and advises (NJ DOBI buyer guide). What actually happens depends on the contract.
In practice, the seller's mortgage and any other liens are usually paid from the sale proceeds at closing, released, or otherwise cleared so the buyer's title insurer will cover the title. Our closing cost vocabulary guide explains where those payoffs and adjustments show up on the Closing Disclosure.
Try these self-checks
- The power company has a right to run lines across the back of every lot on a street. Appurtenant or in gross? In gross. It benefits a company, not a neighboring parcel.
- A neighbor's garage sits 18 inches onto the lot. What is it, and what usually finds it? An encroachment, usually found by a survey.
- A mortgage: voluntary or involuntary, specific or general? Voluntary and specific.
- How long is the general NJ possession period for most land under N.J.S.A. 2A:14-30? 30 years (60 for woodlands or uncultivated tracts).
These concepts are part of the property ownership material in the 75-hour pre-licensing course. Business Elementary's 75-hour course is one place to study them.
Sources
- PSI New Jersey Candidate Information Bulletin (updated 2/1/2026), Section I.C Encumbrances: https://test-takers.psiexams.com/api/content/bulletin/1667
- N.J.S.A. 54:5-6 (via Justia): https://law.justia.com/codes/new-jersey/title-54/section-54-5-6/
- N.J.S.A. 2A:16-1 (via Justia): https://law.justia.com/codes/new-jersey/title-2a/section-2a-16-1/
- N.J.S.A. 2A:44A-6, Construction Lien Law (via Justia): https://law.justia.com/codes/new-jersey/title-2a/section-2a-44a-6/
- N.J.S.A. 2A:14-30 (via Justia): https://law.justia.com/codes/new-jersey/title-2a/section-2a-14-30/
- NJ Department of Banking and Insurance, "Everything You Wanted to Know about Buying a Home" (older guide): https://nj.gov/dobi/division_consumers/pdf/buyingahome.pdf
Last reviewed: October 29, 2026
Frequently Asked Questions
Does an easement go away when the house is sold?
Usually not. A recorded easement generally stays with the land, which is why the title search and the buyer's attorney review it before closing (our title insurance explainer).
What's the difference between an easement and an encroachment?
An easement is a right someone has to use the land. An encroachment is an improvement that crosses onto land where it has no right to be (PSI bulletin).
How long does a contractor have to file a construction lien in NJ?
Generally within 90 days after the last work or materials. For residential construction contracts, it's within 120 days, after an arbitration step (N.J.S.A. 2A:44A-6).
Are unpaid property taxes a lien in New Jersey?
Yes. NJ law makes taxes on land a continuous lien on the land, with later taxes, interest and penalties added (N.J.S.A. 54:5-6).
Can a buyer walk away if the title search finds a lien?
The state's buyer guide says that if title isn't clear, the buyer is not obligated to finalize the purchase. It depends on the contract, so the buyer's attorney advises (NJ DOBI buyer guide).