A habendum clause in property transfer documents sets restrictions on ownership and rights of the new owner or lessee, including use restrictions and ownership limitations. It is located below the grant clause and may detail how long or to what condition the owner’s rights extend.
A habendum clause is a type of clause commonly found in property transfer documents, such as deeds or leases. Sometimes called the “have and hold” clause, the habendum clause sets specific restrictions regarding the scope of ownership and the rights of the new owner or lessee. In addition to restrictions on what can be done with the property, the habendum clause may also detail how long, or to what condition, the owner’s rights extend.
In most leases or deeds, the habendum clause is located directly below the grant clause. While the grant clause details what property is being transferred, the habendum clause specifies the rights of the owner with respect to the property. The alternate name for this type of clause comes from the section’s common legal wording, which typically begins with the words “have and hold.”
If the property is transferred in full, the clause may simply state that the owner has the right to do whatever they want with the property, without time restrictions, depending on applicable laws. Most real estate deeds that are drawn up as a result of a sale simply grant the new owner full and unlimited use of the property, with no time restrictions. If there are restrictions regarding ownership, this clause will describe them in specific detail.
Restrictions found in the habendum clause may include the extent of the tenant’s ownership. For example, if a person buys an interest in a timeshare condominium, he is only entitled to the percentage of ownership purchased, not full ownership of the condominium. Another ownership limitation could occur if a person has been granted use of a property only during the person’s lifetime, which will revert to the original owner upon the tenant’s death. In most cases, the habendum clause will detail this restriction, as well as define who will receive the deed upon the death of the current tenant.
Use restrictions are also detailed in this type of clause. The timeshare lessee, for example, may be restricted from taking certain actions during their lease on the timeshare, even though they technically own some ownership of the property. Use restrictions may include rules about damaging property or making permanent cosmetic modifications. Tenants may also be restricted from engaging in any type of illegal activity on the property, or breaking Home Owners Association rules that apply to the property.
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