Covenant of Warranty
A covenant of warranty in real estate is a legally binding promise made by a grantor (seller) to a grantee (buyer) in a deed or conveyance document. This covenant guarantees that the grantor possesses legal title to the property being conveyed and that they have the right to transfer that title to the grantee. Essentially, the covenant of warranty assures the grantee that they will not be disturbed in their ownership or possession of the property due to any defects in the title.
Key aspects of a covenant of warranty include:
1. Promise of Title: The grantor promises that they have legal ownership of the property and has the right to transfer that ownership to the grantee. This implies that the grantor holds clear and marketable title to the property, free from any encumbrances or defects that could challenge the grantee’s ownership rights.
2. Defending Against Claims: The covenant of warranty obligates the grantor to defend the grantee against any lawful claims or challenges to the title that may arise in the future. If a third party asserts a claim to the property, such as a lien, encumbrance, or competing ownership claim, the grantor is responsible for addressing and resolving the issue.
3. Indemnification: In addition to defending against claims, the covenant of warranty typically includes an indemnification clause, whereby the grantor agrees to compensate the grantee for any losses or damages incurred as a result of a breach of the covenant. This may include reimbursing the grantee for legal fees, court costs, or other expenses incurred in defending their title to the property.
4. Duration of Covenant: The covenant of warranty typically runs with the land and is enforceable for the duration of the grantee’s ownership interest in the property. This means that the grantor’s promise to defend the grantee’s title remains in effect even after the conveyance of the property.
Overall, the covenant of warranty provides assurance to the grantee that they are receiving clear and marketable title to the property and protects them against potential challenges to their ownership rights. It reflects the grantor’s commitment to conveying a property with a good and marketable title and is a standard provision in most real estate transactions.
