The term encumbrance is not limited to annotations in the TCTs, according to the following laws and jurisprudence:

1.

PRESIDENTIAL DECREE No. 1529, AMENDING AND CODIFYING THE LAWS RELATIVE TO REGISTRATION OF PROPERTY AND FOR OTHER PURPOSES Section 44. Statutory liens affecting title. Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted in said certificate and any of the following encumbrances which may be subsisting, namely: First. Liens, claims or rights arising or existing under the laws and Constitution of the Philippines which are not by law required to appear of record in the Registry of Deeds in order to be valid against subsequent purchasers or encumbrancers of record. Second. Unpaid real estate taxes levied and assessed within two years immediately preceding the acquisition of any right over the land by an innocent purchaser for value, without prejudice to the right of the government to collect taxes payable before that period from the delinquent taxpayer alone. Third. Any public highway or private way established or recognized by law, or any government irrigation canal or lateral thereof, if the certificate of title does not state that the boundaries of such highway or irrigation canal or lateral thereof have been determined. Fourth. Any disposition of the property or limitation on the use thereof by virtue of, or pursuant to, Presidential Decree No. 27 or any other law or regulations on agrarian reform.

2.

LAPERAL VS. CITY OF MANILA (G.R. No. L-42792, October 23, 1935): The issue here was whether or not the special tax levied by the City of Manila constituted an encumbrance which the mortgagees and purchasers at the public sale of a land mortgaged in their favor, are under a duty to pay even if the same was not noted at the back of the transfer certificate of title issued in favor of the mortgagor. Citing Hongkong & Shanghai Banking Corporation vs. Rafferty (39 Phil., 145), a mortgagee who purchases real property mortgaged to him may not avoid the payment of the special land tax due and unpaid although he has no notice of the existence of such an obligation.

3.

SABIO VS. INTERNATIONAL CORPORATE BANK (G.R. No. 132709, September 4, 2001): Petitioner here contends that respondents are obligated to rid the subject property of squatters and unauthorized structures as these constitute encumbrances on the property. The Court, citing the case of Yuson and De Guzman v. Diaz (42 Phil. 22), ruled that occupation by the occupants of the contiguous portion of the property is not an encumbrance which defendant was obligated to clear the property from. The meaning of the words, "free from all encumbrance" does not include adverse possession of a third person. An adverse possession by another is not an "encumbrance" in law and does not contradict the condition that the property be free from encumbrances; nor is it a "lien" which connotes security for a claim. Also citing the case of People vs RTC, it held that a Notice of Lis Pendens is not a lien or encumbrance but a mere cautional notice to a prospective buyer or mortgagee of a parcel of land under litigation, and cannot conceivably be the lien or encumbrance contemplated by law.

4.

PEOPLE VS. RTC (G.R. No. 81541 October 4, 1989). A notice of lis pendens is a mere cautionary notice to a prospective buyer or mortgagee of a parcel of land under litigation and cannot conceivably be the "lien or encumbrance" contemplated by law. Citing WORDS AND PHRASES, Volume 14A, p. 151, the case defined "encumbrance as a burden upon land, depreciative of its value, such as a lien, easement, or servitude, which, though adverse to (the) interest of (the) landowner, does not conflict with his conveyance of (the) land in fee." The Court also cited BLACK'S LAW DICTIONARY, 5th Edition (1979), which provides that the following are considered encumbrances: a claim, lien, charge, or liability attached to and binding real property; e.g., a mortgage, judgment lien, lease, security interest, easement or right of way, accrued and unpaid taxes.

5.

ROXAS vs. CA (G.R. No. 92245 June 26, 1991). The issue of this case is whether or not a lease is an encumbrance and/or alienation within the scope of Art. 166 of the New Civil Code1. The Court ruled in the affirmative, viz:

Art. 166, NCC. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without the wifes consent. If she refuses unreasonably to give her consent, the court may compel her to grant the same. This article shall not apply to property acquired by the conjugal partnership before the effective date of this Code.

x x x Encumbrance has been defined to be every right to, or interest in, the land which may subsist in third persons, to the diminution of the value of the land, but consistent with the passing of the fee by the conveyance; any (act) that impairs the use or transfer of property or real estate . . . (42 C.J.S., p. 549). x x x In the contract of lease, the lessor transfers his right of use in favor of the lessee. The lessor s right of use is impaired, therein. He may even be ejected by the lessee if the lessor uses the leased realty. Therefore, lease is a burden on the land, it is an encumbrance on the land The concept of encumbrance includes lease, thus "an encumbrance is sometimes construed broadly to include not only liens such as mortgages and taxes, but also attachment, LEASES, inchoate dower rights, water rights, easements, and other RESTRICTIONS on USE.(533 Pacific Reporter [second series] 9, 12). Moreover, lease is not only an encumbrance but also a qualified alienation, with the lessee becoming, for all legal intents and purposes, and subject to its terms, the owner of the thing affected by the lease. (51 C C.J.S., p. 522) 6.

Nevertheless, although the term encumbrances cover even those not registered as ruled in the foregoing cases, the law requires actual notice in order to bind third parties to such type of encumbrances [Pineda vs CA (G.R. No. 114172. August 25, 2003)], to wit: To bind third parties to an unregistered encumbrance, the law requires actual notice. The fact that Mojica, who sold the property to Gonzales, had actual notice of the unregistered mortgage did not constitute actual notice to Gonzales, absent proof that Gonzales herself had actual notice of the prior mortgage. Thus, Gonzales acquired her rights as a mortgagee in good faith. When Mojica defaulted in paying her debt, Gonzales caused the extrajudicial foreclosure of the mortgaged Property. Gonzales purchased the mortgaged Property as the sole bidder at the public auction sale. For Mojica's failure to redeem the foreclosed Property within the prescribed period, Gonzales consolidated her title to the Property. Absent any evidence to the contrary, the sale at public auction of the Property to Gonzales was valid. Thus, the title or ownership of the Property passed from Mojica to Gonzales. At this point, therefore, Gonzales became the owner of the Property."