The prohibition of encumbrance is a legal form of restriction on the disposition of real estate; specifically, the debtor may not legally encumber the real estate with another property right (lien or easement) without the bank’s consent.
What does the ban on encumbrances mean for real estate?
The prohibition of encumbering the property consists in the fact that for a certain period of time you may not encumber the property in any way, i.e. you may not establish a lien, easement or pre-emption right, etc.
Did you know that a ban on loading cannot be negotiated indefinitely? It is established exclusively for a definite and reasonable period of time and is a right in rem with material consequences. It does not only apply between the contracting parties, but also to third parties.