Habendum Clause (Leases) Definition
The habendum clause, also known as a “to have and to hold” clause, is a part of a lease or deed. It defines the rights and interests that the lessor or grantor gives to the lessee or grantee in the lease or deed. It generally follows the “grant clause”, which indicates that the grantor or lessor transfers rights in the identified property.
A Little More on What is a Habendum Clause
As stated above, the habendum clause follows the grantor clause. For example, in a deed, a grantor clause might read:
“That Grantor, for and in consideration of the sum of ______DOLLARS ($____.00) and other good and valuable consideration, to it in hand paid by Grantee, the receipt whereof is hereby acknowledged, does hereby grant unto grantee the real property (“Propery”) located in ____ County, _______, and described as follows:
– Property Description -“
Which is followed by the habendum clause, such as:
“To have and to hold the premises described herein in fee simple absolute forever.”
The term fee simple absolute defines the nature of the interest conveyed. The term forever explains for how long the interest will be held.
In a lease, a habendum clause might read:
“TO HAVE AND TO HOLD the Premises for a term of ______ (__) months commencing on _____________ (“Term Commencement Date”) with respect to each portion of the Premises and ending on _____________ (“Term End Date”)
This particular clause qualifies the leasehold estate granted by making reference to the defined Premises and defines the Term Commencement Date and Term End Date.
These clauses are found in deeds and leases of residential and commercial property. They are also commonly found in oil and gas or mineral leases.
Academic Research on Habendum Clause
- The Habendum Clause as a Special Limitation on Oil and Gas Leases in Texas, Irwin Jr, I. (1957). Sw. LJ, 11, 340.
- The Habendum Clause in Oil and Gas Leases, Moses, L. (1963). S. Tex. LJ, 7, 12.
- Defining Production in Paying Quantities: A Survey of Habendum Clause Cases throughout the United States, McDonald, J. E., & Wallen, Z. M. (2014). NDL Rev., 90, 383. This paper investigates the general concept of leases in drilling technology. This paper provides a survey of the relevant case law on habendum clause interpretation throughout the United States in order to further clarify jurisdictional variations and identify the similarities that exist regionally and nationally. It provides a look at how much production courts require to uphold an HBP lease and explains the tests the courts use to determine whether the required level of production occurred.
- Oil and Gas Leases-The Habendum Clause Determines the Duration of the Lease Unless Properly Modified by Other Provisions of the Lease, Hanna, R. L. (1973). Tex. Tech L. Rev., 5, 900.
- Deeds-Granting Clause Conflicting with Habendum Clause, Dorsey, W. A. (1939). U. Kan. City L. Rev., 8, 123.
- Rights granted in the habendum clause, Burgess, P. W. (1998). In Working with the oil and gas lease: Proceedings of an Insight Conference. This paper discusses the concept of the habendum clause, as well as its purpose in a petroleum or natural gas lease. This paper describes the rights granted in the habendum clause. In this paper, typical older forms of freehold leases are compared with the model lease form and with the 1991 form of the Canadian Association of Petroleum Landmen (CAPL) Petroleum and Natural Gas lease.
- A Reexamination and Reformulation of the Habendum Clause Paying Quantities Standard Under Oil and Gas Leases, Ritchie, A. (2017). ONE J, 3, 977. This article examines the habendum clause and the evolution of the paying quantities standard which will determine whether a lease continues in effect or terminates automatically. This article also seeks to show that courts have placed undue focus on the mathematical first prong of the paying quantities test. Due to the shortcomings of the mathematical prong, this article proposes that courts reformulate the paying quantities standard by removing the express mathematical prong of the test and by taking the best aspects of the test from both earlier and more recent decisions.
- Comparing Apples and Oranges-The New Mexico Supreme Court’s Modification of the Habendum Clause in an Oil and Gas Lease by the Implied Covenant of …, Dickerson, R. (1982). NML Rev., 12, 529.
- Habendum Clause as Affected by Shut-in, Commence Drilling, Continued Drilling and Other Clauses, Sperling, J. E. (1958). Proc. Ann. Inst. on Oil & Gas L. & Tax’n, 9, 1.
- Oil and Gas Lease-The Habendum Clause-Sufficiency of Shut in Wells for Extension Beyond the Primary Term, Murphy, D. D. (1957). In Dicta (Vol. 34, p. 253).