Charge on land

Encumbrance power of attorney – The encumbrance power of attorney authorizes the buyer to encumber the property with a lien in order to finance the purchase price. This power of attorney is only required if the buyer of the property wishes to obtain outside financing and the lender requires collateral for the loan. Thus, the buyer can finance the property via a loan and use it as loan collateral with his bank before the transfer of ownership has taken place.

Lead Mortgage Power of Attorney at a Glance: Early financing of a property

• Buyer is entitled by the seller to encumber the property with mortgages for financing purposes
• Done before the transfer of ownership
• Required if the buyer wishes to take out debt financing
• The buyer deposits the property as loan collateral with the bank

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