Legal Definitions - general covenant against encumbrances

A general covenant against encumbrances is a legally binding promise made by a property seller (the grantor) to a buyer (the grantee) in a deed of conveyance. This promise guarantees that the property being transferred is free from all encumbrances at the time of the sale, except for any specifically mentioned in the deed itself.

An "encumbrance" refers to any right or interest in the property held by someone other than the owner, which diminishes the property's value or restricts its use. Examples include mortgages, liens, easements, unpaid taxes, or leases. The "general" aspect of this covenant means the seller guarantees against *all* such encumbrances, regardless of when they were created or by whom, not just those created by the seller during their ownership.

Here are some examples to illustrate this concept:

• Example 1: Undisclosed Utility Easement

  A developer purchases a large tract of land from a private owner, and the deed includes a general covenant against encumbrances. The developer plans to build residential homes. After the purchase, during the initial survey for construction, they discover an unrecorded utility easement running across a significant portion of the property, granting a local water company the right to access and maintain underground pipes. This easement was created by a previous owner decades ago and was not disclosed by the seller. Because the deed contained a general covenant against encumbrances, the seller is in breach of this covenant, as they guaranteed the property was free from *all* such burdens, even those they didn't create or weren't aware of.

• Example 2: Unreleased Mortgage from a Prior Owner

  Sarah buys a historic house from Mark, and the deed includes a general covenant against encumbrances. A few years later, when Sarah attempts to refinance her mortgage, a title search reveals an old, unreleased mortgage lien on the property from a bank that lent money to an owner two generations prior to Mark. This old mortgage was never properly discharged from the public records, even though it was likely paid off. Despite the lien not being created by Mark, his general covenant against encumbrances means he promised the property was free of *any* such financial claims, making him liable for the cost and effort to clear this historical encumbrance from the title.

• Example 3: Unpaid Property Taxes from a Previous Decade

  A small business owner, David, buys a commercial building from Emily. The deed includes a general covenant against encumbrances. Several months after taking possession, David receives a notice from the county tax assessor indicating a substantial lien on the property for unpaid property taxes dating back to a period before Emily even owned the building. This tax lien was overlooked during the initial title search. Because Emily provided a general covenant against encumbrances, she guaranteed that the property was free from *all* such financial burdens, regardless of when they originated or who was responsible for them. David can now hold Emily responsible for the costs associated with clearing this tax lien.