Covenant Against Encumbrances
In real estate, the covenant of encumbrances is a promise made by the seller (grantor) to the buyer (grantee) in a deed, guaranteeing that the property being conveyed is free and clear of any encumbrances, liens, or other claims that could adversely affect the buyer’s ownership or use of the property. This covenant ensures that the buyer will take title to the property without any burdens or restrictions that could impair its value or marketability.
Key aspects of the covenant of encumbrances include:
1. Absence of Encumbrances: The covenant guarantees that the property is conveyed to the buyer free and clear of any encumbrances, which may include mortgages, liens, easements, restrictions, or other claims that could affect the buyer’s title or use of the property.
2. Protection Against Title Defects: The covenant protects the buyer against any defects or challenges to their title that may arise from encumbrances or claims of ownership by third parties. It ensures that the buyer receives marketable title to the property, meaning that they have clear and unencumbered ownership rights.
3. Remedy for Encumbrances: If the property is found to be subject to any encumbrances or defects in title after the sale, the covenant obligates the seller to take appropriate measures to remedy the encumbrance and clear the title for the buyer.
The covenant of encumbrances provides buyers with important legal protection and assurance that they will receive clear and marketable title to the property, free from any encumbrances or claims that could impair their ownership or use of the property. If the seller breaches this covenant by conveying property that is subject to undisclosed encumbrances, the buyer may have recourse against the seller for damages or other legal remedies.
Overall, the covenant of encumbrances is a critical component of real estate transactions, providing buyers with confidence that they will receive clear and unencumbered title to the property they are purchasing. Sellers should ensure that this covenant is included in the deed to provide buyers with the necessary assurances and protections regarding the property’s title.
