Legal Definitions - habendum clause

A habendum clause is a section within a legal document, most commonly a deed or an oil and gas lease, that defines the extent, duration, or conditions of the interest being granted.

• In property deeds and wills: The habendum clause specifies the type of ownership or interest being transferred and any limitations or conditions associated with it. It often begins with the phrase "to have and to hold."

  • Example 1: Granting a Life Estate

    A grandmother drafts a deed to transfer her vacation home to her grandson. The deed includes a habendum clause stating, "to have and to hold the said property unto the Grantee, John Smith, for and during the term of his natural life, and upon his death, then to his daughter, Jane Smith, in fee simple absolute."

    Explanation: This habendum clause clearly defines the extent of the interest granted to John Smith – a life estate, meaning he can use the property for his lifetime. It also specifies the condition that upon his death, the full ownership (fee simple absolute) passes to his daughter, Jane, illustrating how the clause dictates the duration and subsequent transfer of the property interest.

  • Example 2: Restricting Property Use

    A land developer sells a parcel of land to a buyer. The deed contains a habendum clause that reads, "to have and to hold the said premises unto the Grantee, subject to the express condition that the property shall be used solely for residential purposes and no commercial structures shall ever be erected thereon."

    Explanation: Here, the habendum clause defines a condition affecting the grant. While the buyer receives full ownership, the clause restricts how they can use the property, ensuring it remains residential and preventing commercial development. This demonstrates how the clause can impose limitations on the granted interest.

• In oil and gas leases: The habendum clause specifically defines the duration of the lease, outlining how long the energy company (lessee) has the right to explore for and produce oil and gas from the property.

  • Example 1: Standard Primary and Secondary Term

    A rancher signs an oil and gas lease for his land. The habendum clause states, "This lease shall remain in force for a primary term of three (3) years from the effective date hereof, and as long thereafter as oil or gas is produced in paying quantities from said land."

    Explanation: This clause establishes a fixed initial period (the three-year "primary term") during which the energy company can explore. It then provides for an extended "secondary term" that lasts indefinitely, but only if oil or gas is actively being produced in profitable amounts. This clearly defines the total potential duration of the lease based on production.

  • Example 2: Conditional Extension of Lease

    An oil and gas lease contains a habendum clause specifying, "This lease shall be for a primary term of two (2) years, and thereafter for so long as drilling operations are continuously prosecuted with no cessation of more than 90 consecutive days, or for so long as oil or gas is produced in paying quantities."

    Explanation: This habendum clause sets a two-year primary term but offers two ways for the lease to extend beyond that. It can continue if drilling is ongoing without significant breaks, or if production is achieved. This illustrates how the clause can provide alternative conditions for extending the lease's duration.