Habendum Clause ensures transfer of absolute title

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Habendum Clause is a very common clause stated on deeds used to transfer ownership rights on property. The clause defines the nature of the estate granted to a person, the extent of the interest transferred and the rights and obligations on the property.

What the clause implies

The clause is written in the language - "To have and to hold the property herein granted to the party of the second part, the heirs and successors and assigns of the party of the second part, forever."

The statement implies that the owner of real property or the grantor also known as the "party of the first part" in the deed is transferring the property-title to the grantee or "the party of the second part."

Why the clause is included in a deed
The clause is included in the deed in order to clarify that the grantor has transferred absolute title or ownership rights on the property to the grantee. This implies that the grantee receives title which is free of any lien or judgment.

For instance, in case of transfer of life estate, a grantee holds ownership rights on property and can use it only for his lifetime. Upon his death, the ownership rights are transferred back to the grantor. With such a title, the grantee holds ownership rights only for his/her lifetime and cannot pass on the rights to his heirs or beneficiaries. In order to clarify that the property transfer is free from such restrictions, a Habendum Clause is used.

How Habendum Clause differs from other Clause in a deed
The Clause supplements the Granting Clause which is also a part of the deed. Unlike a Habendum Clause, the Granting Clause contains the words of the transfer of property to the grantee. These clauses help to determine the duration of the estate or other rights offered by the transfer in addition to the general rights of the parties involved in the transfer. In certain states like New York, a deed without a Habendum Clause creates an unmarketable title. Thus, both the Habendum and Granting Clauses make up a well drafted deed used to convey interest or title in the property.
Related Article:Other Clauses in MortgageLast updated on January 12, 2013

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It should be noted here that the Habendum clauses are mainly found in leases, particularly oil and gas leases.

 

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