Define: Covenant Against Encumbrances

A covenant against encumbrances is a legal promise made by a seller or grantor in a real estate transaction, guaranteeing that the property being conveyed is free from any liens, mortgages, easements, or other encumbrances that could diminish its value or restrict its use. This covenant ensures that the buyer or grantee receives clear and marketable title to the property, unencumbered by any third-party claims or interests. If any encumbrances are discovered after the sale, the seller may be held liable for breaching the covenant, and the buyer may be entitled to remedies such as rescission of the contract, damages, or specific performance. The covenant against encumbrances is typically included as one of the standard covenants of title in a deed or conveyance document, providing assurance to the buyer that the property is free from any known or undisclosed encumbrances at the time of transfer.

An agreement, promise, or contract that shows there are no encumbrances against the land outlined in a deed or other recorded means of communication. An encumbrance is a claim by another person against the land. Leases, mortgages, liens, unpaid taxes, or easements are examples of encumbrances.

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This glossary post was last updated: 29th March, 2024.