Habendum Clause
Candlefocus EditorIn real estate leases, the habendum clause defines the rights and interests of the lessee. It is a statement that validates the lessee's rights to the property and outlines the lease terms. This usually includes the length of the lease, any fees paid by either party, how the landlord may apply changes, what counts as breach of contract, and any other special conditions of the lease.
In real estate purchase contracts, the habendum clause outlines the transfer of ownership of the property. This generally includes the parties transferring title, the price to be paid, the amount of a down payment, the mortgage conditions and payment of closing costs. Additionally, the habendum clause can also specify other details such as whether there are restrictions on when the parties can transact business or what improvements the buyer must make on the property.
A habendum clause is also frequently included in oil and gas contracts. Here, it defines the length of time a company holds the mineral rights to the land without having to start exploration. Additionally, it outlines the conditions for the exploration of the property, what laws and regulations the company is subject to during exploration, the amount of money to be paid to the landowner for the rights to explore and any limitations that the lessee must abide by.
Overall, a habendum clause is an important part of any contract between parties dealing with property. It's responsible for outlining the transfer of ownership, rights and interests between the parties. By reading and understanding the habendum clause in the land dealing contract, all parties involved can be certain that their interests are protected.