What is a Habendum Clause?

What is a Habendum Clause?

When a property transaction is taking place, it must have a contract, and within that contract is a clause called the Habendum Clause.

The Habendum Clause is a section of the contract that details the property rights transferred to the purchasing party. It will clearly outline all interests, rights, and restrictions that the buyer will get with the title. It is sometimes commonly called the 'to have and hold clause' because its language starts with "to have and to hold."

A Habendum Clause is also included in lease contracts. In a lease contract, this clause will outline the lessee’s rights to the property.

Each contract will have a Habendum Clause unique to the subject property. For example, in most real estate sales, the type of property title being transferred is called a fee simple absolute. In these sales, the Habendum Clause will state that the property is being transferred without any restrictions, meaning that the new owner will have absolute ownership.

In some cases, a property title will have some restrictions. In these situations, the Habendum Clause will clearly state the restrictions that apply. An example may be that the title will only be transferred for a set period. After that time passes, ownership could either revert to the original entity or another party.

When working in real estate, it's essential to carefully review the Habendum clause to ensure its accuracy before signing a contract.

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