The habendum clause refers to the clause in the lease or deed of the contracts which describes the types of interests, lease rights and other ownership details. To put it simply, Habendum Clause is included in real estate and other mineral rights agreements in order to provide a clear understanding of the contractual terms. The Habendum Clause mainly starts with the words, to have and to hold.
Now to discuss this term briefly, a habendum clause, as mentioned above, is a part of the contract which mainly deals with the property rights, interests and other aspects of the ownership which is given to the ownership of another party to deal with. Therefore, in legal language, the Habendum clause is usually included in the property-related documents. And most of the buyers and sellers have generally experienced it through the real estate transfers, and it is also used in the manner of the leases and deeds, mainly in the gas and oil industry.
In oil and gas leases, the habendum clause mainly discusses the primary and secondary terms of the lease. It dictates how long the lease remains in force. So, when in the context of the oil and gas leases, the sole focus of the habendum clause remains on the and so long thereafter part, which extends the lease if the conditions are met. The Habendum clause is also known as the term clause in the oil and gas industry.
In the case of real estate leases, Habendum Clauses are a part which best describes a lessee rights and interests.
In fact, for any outright real estate purchases, a Habendum clause deals with the transference of the ownership of the property and thus accompanying the restrictions. Generally, the Habendum Clause states the property which is transferred without the restrictions. This means that the owner has full authority on the property that satisfies all the terms and conditions. And at the same time, has the full right to bequeath or sell the property to an heir or any other person.
In Habendum Clause, if any property gets transferred through it, it is called fee simple absolute. A fee simple absolute allows complete ownership of the property, which is subjected to government laws and powers.
Some real estate transfers also include restrictions within the Habendum Clause. For example, a timeshare lease will outline the percentage of the ownership which gets transferred to any other related restrictions.
