Also known as:against encumbrance · covenant against encumbrances · warranty against encumbrances
Written by attorneys · grounded in primary & secondary sources — see below
A present covenant in a general warranty deed by which the grantor promises that the conveyed land is free from any undisclosed third-party interests that diminish its value or use. The covenant is breached at the moment of conveyance if such an encumbrance exists, regardless of whether the grantee had constructive notice from the public records.
Sources & Authorities
How it applies
Common Examples
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Recorded Easement Triggers Breach
Albert Allen conveyed his downtown parcel to Apex Dynamics by general warranty deed. The deed contained the standard covenant against encumbrances. Years earlier a neighboring owner had recorded a view easement that prevented any new structure from blocking sightlines. After closing Apex Dynamics obtained permits and began construction that would violate the easement. The neighbor obtained an injunction halting the project. Apex Dynamics recovered damages from Albert Allen because the recorded easement constituted an encumbrance that breached the covenant at the time of conveyance.
Unreleased Option as Encumbrance
Amelia Amari sold her commercial building to Alliance Holdings by general warranty deed. Before the sale Amelia had granted a recorded purchase option to a third party that remained unreleased. Two years later the option holder exercised the right and obtained a judgment forcing Alliance Holdings to convey the property. Alliance Holdings recovered from Amelia under the covenant against encumbrances because the outstanding option burdened title at the moment the deed was delivered.
Select any source to read its text and confirm it supports the definition.
Cases
Common Law
Restatements
Study Supplements
Davidson Bros., Inc. v. D. Katz & Sons, Inc.121 N.J. 196, 579 A.2d 288
Common questions
Frequently Asked
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Does the covenant against encumbrances cover recorded easements and options?+
Yes. The covenant promises that title is free from any undisclosed third-party interests that diminish value or use, including recorded easements, restrictive covenants, and purchase options. Breach occurs at conveyance even if the encumbrance appears in the public records.
Supporting sources
When is the covenant against encumbrances breached?+
The covenant is a present covenant breached, if at all, at the moment the deed is delivered. No actual disturbance of possession is required. The mere existence of the encumbrance at closing supplies the breach.
Supporting sources
Does constructive notice from recording defeat a claim for breach?+
No. The covenant against encumbrances is an absolute assurance that title is free of encumbrances. Constructive notice from the recording statutes does not relieve the grantor of liability under the covenant.
Supporting sources
Can a subsequent grantee enforce the covenant against encumbrances?+
Yes. Title covenants in a general warranty deed run with the land, allowing a remote grantee to sue the original grantor when an encumbrance that existed at the first conveyance later impairs the property.
Supporting sources
83 P.2d 698Property
…sewer. On January 15, 1904, Laura A. J. Bailey conveyed lot 19 to John J. Jones, by general warranty deed with usual covenants against encumbrances, and containing no exceptions or reservations. Jones erected a dwelling on the north part of the lot. In 1920 Jones conveyed the north 156 feet of lot 19 to Carl D. Reynolds; in 1924…