What Habendum Clauses Do And What to Look For

A habendum clause is a section in a real estate deed that specifies the details of a property transfer.  Included in this portion are the properties transferred, the transfer recipient, and the transfer period’s length. There’s a good chance you’ll also find the designated heir or heirs who will inherit this asset.  

This section of the deed establishes the recipient’s right to own and possess the real estate, and is done by using the words “to have and to hold.”  This phrase basically means the old owner is giving up their claim, and the new owner is taking over. After this you’ll find more details about what the new owner can and can’t do with the property, like if they’re allowed to build a fence or if they have to let their neighbor use part of the land if there is an easement. 

This provision also tells you what type of property the new owner is getting, including if it is “fee simple absolute” or a “life estate” that expires after a certain period.

Here’s an example of  a standard habendum clause.

“To have and to hold the property, together with all and singular the rights and appurtenances thereto in any way belonging, unto Jane Smith and her heirs and assigns forever, subject to any easements or restrictions of record.”

In this example, the conveyance provision (the property transfer) says that Jane Smith is now the proud owner of the land, and she gets to keep it forever.  But the wording and people involved matter if you want the clause to be binding. Habendum provisions might not hold up under certain circumstances.  These include:

• When the language used is contradictory or ambiguous.
• Terms that are illegal or immoral, like requiring someone to perform criminal acts.
• If one of the parties lacks the legal capacity, like being a minor or mentally incompetent.
• Violates public policy by restricting a person’s ability to engage in lawful activities.

If you want to make sure yours is legally binding, hire a licensed attorney to go over it and make sure everything is in order.

Once the habendum section of a deed has been agreed upon and established, it is challenging to modify or terminate it.  But there are some situations where you can.  The first situation where you can modify a habendum clause is when all parties agree to have its terms modified. If one of the parties breaches the terms, like by failing to make payments, the other party can terminate the agreement or seek damages.

A third way to terminate or modify habendum clauses is when one of the parties gets a court order to modify or terminate.  But there has to be a legal basis for doing so, like a contract entered into fraudulently or under duress.  And if the clause expires on its own.

Changing or terminating the conveyance provision can be difficult, but it’s not impossible. The reason it is difficult to modify or terminate is because it is a vital part of the transfer of property and it impacts the rights and responsibilities of all parties involved.

Habendum clauses are important to get right.  If you want your spouse, kids, or even a business partner to take ownership of your property, or you want to ensure the sale of your property goes through smoothly, this is where it all starts.