The habendum clause typically is a section of a contract that deals with rights and to whom or what is granted.
A clause identifies a particular section of a real estate contract (for those of you who don’t know). There are many types of clauses in real estate, and you are likely to see many of them on your real estate exam.
What is the Habendum Clause?
Definition: The habendum clause is the statement in a contract that describes the rights and interests being given. It almost always begins with the words “to have and to hold.”
Therefore, it is often called the “to have and hold clause.” Put simply, the habendum clause tells the buyer, or lessee, EXACTLY what they are getting.
For example, on one form of a real estate contract, let’s say, a timeshare lease, the clause will outline the percentage of ownership being transferred and any other related timeshare related restrictions.
It is worth noting the content of a habendum clause varies somewhat. Depending on the exact contract, obviously, a timeshare lease will be much different than a standard home deed. Still, either way, the habendum clause is always the section where ownership is defined.
Fun fact: Many states, such as Pennsylvania, require specific contracts to have a habendum clause for the contract to be officially recorded and legally recognized.
What to Know for the Real Estate Exam
What’s important to understand for the real estate exam is like other clauses, you need to remember what the habendum clause is.
Remember the habendum clause is the statement in a real estate contract that describes the rights and interests granted.
A question on the exam you might see is a list of different contract clauses, and you may need to distinguish which-is-which.