A title defect is something missing from the title, for example, an undisclosed heir from a previous owner who could claim the land. An encumbrance is a claim made upon the land, but not by the landowner. For instance, your local power company may have an easement for a power line that will serve your house. If you are borrowing money to purchase land, your lender will require your title to be cleared of any outstanding defect or encumbrance, before the land is transferred.