What is the habendum clause in your real estate contract?
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Habendum clause, aka ‘to have and to hold clause’ is an important part of deeds — both real estate leases or oil and gas leases.
The clause defines the rights and interests of the lessee or the grantee as given by the lessor or grantor.
This clause, particularly in real estate leases defines the premises, the term commencement date, and the term end date. And, it’s found in deeds of both residential as well as commercial properties. Plus, in oil and gas or mineral leases.
What is a habendum clause?
A habendum clause is the legal part of a contract that deals specifically with real property rights, interests, and the other vital aspects of ownership. The clause includes basic legal language and is usually a part of all property-related documents. Basically, the clause tells the buyer exactly what kind of deal they’re getting into.
Habendum clause in the real estate world
Needless to say, the clause, and its contents, vary depending on the exact nature of the contract. In the case of real estate contracts, the basic legal language refers to the transfer of ownership of a property. And, the accompanying restrictions. Interestingly, the clause always begins with the phrase, “To have and to hold”.
Understanding a habendum clause
Habendum clause is a contract provision included in the deed when a property is transferred. If properly drafted, the clause clearly indicates the ownership rights and interests granted to the buying party upon the execution of a real estate contract.
Did you know, there’s a reason this clause is called so? The beginning phrase, “To have and to hold” is the literal translation of the Latin words habendumet tenendum — believed to have commenced clauses in deeds and property documents, historically. The clause basically deals with the relationship between the grantor, the grantee, and a piece of land.
The clause generally follows the grant clause according to which, the grantor or lessor transfers ownership rights of the identified property. Keep in mind that all the habendum clause provisions must agree with those mentioned in the granting clause.
For example, if the lessor specifies a timeshare interest or an interest less than fee simple absolute, the habendum clause too must have that interest conveyed, along with the owner’s rights, and how those rights should be exercised.
States such as Pennsylvania require a habendum clause in all their property deeds. Only then can they be officially recognized by the Recorder of Deeds.
Read more: What is a defeasance clause, and how does it work?
A habendum clause is a section of a contract agreement specifically dealing with the lessee’s property rights and other aspects of the ownership.
In real estate leases, the clause indicates the ownership transfer, primary term, secondary term, and the type of interest.
Read more: Land lease agreements
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