A covenant is a formal agreement or promise between two parties, typically found in a contract. It can be either an absolute covenant, which has no limitations, or a conditional covenant, which is dependent on a condition. There are various types of covenants, including affirmative covenants that require a party to take action, negative covenants that prohibit a party from taking certain actions, and covenants specifically related to land. Covenants can be explicitly stated in a deed or implied by law, and they can either be attached to the land or personal to the parties involved.
A covenant is a formal agreement or promise that is made in a contract or deed. It can be either absolute or conditional, and it may require a party to either do something or refrain from doing something. In the realm of real estate, a covenant can be a commitment to use the property in a specific manner or a guarantee that the property is free from any encumbrances. Additionally, a covenant can be implied by law or deduced from the behaviour of the involved parties. An affirmative covenant necessitates the property owner to perform certain actions on the property, such as maintaining a fence or landscaping. On the other hand, a covenant of seisin is a promise made in a warranty deed, assuring that the grantor has the right to transfer the property and that it is unencumbered. Furthermore, a noncompetition covenant is a pledge, typically found in a sale-of-business or employment contract, to refrain from engaging in the same type of business within the same market as the buyer, partner, or employer for a specific duration of time. These examples demonstrate the various applications of a covenant in different contexts, as well as the diverse types of actions or abstentions it may require. They also highlight how a covenant can be established in different types of contracts or deeds, and how it can be implied or deduced from the circumstances.
A covenant of good right to convey is a legal promise made by a seller to a buyer that they have the legal authority and right to transfer ownership of the property being sold.
This covenant is important because it ensures that the buyer will receive clear and marketable title to the property, free from any claims or encumbrances that could affect their ownership rights.
If a seller breaches this covenant, the buyer may have legal remedies available, such as rescinding the contract, seeking damages, or specific performance to compel the seller to fulfill their promise.
Yes, parties to a real estate transaction can agree to exclude or modify this covenant through a written agreement. However, it is generally advisable for buyers to insist on this covenant to protect their interests.
Buyers can conduct a title search or hire a title company to examine the property’s title history and ensure that the seller has the legal authority to transfer ownership. Additionally, title insurance can provide protection against any unforeseen issues.
Certain situations, such as foreclosure sales or sales by court order, may have exceptions to this covenant. It is important to consult with a legal professional to understand the specific circumstances and any potential exceptions.
If a seller fails to disclose known liens or encumbrances on the property, they may be held liable for breaching the covenant of good right to convey. Buyers may have legal recourse to seek remedies for any damages incurred.
While buyers generally have the right to insist on this covenant, they can choose to waive it if they are willing to accept the risks associated with potential title issues or encumbrances.
No, this covenant is typically specific to the buyer-seller relationship in a particular transaction and does not automatically transfer to subsequent buyers. Each buyer should ensure they have their own covenant in place.
If you suspect a breach, it is advisable to consult with a real estate attorney who can assess the situation, review the relevant documents, and advise you on the appropriate legal actions to take.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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