Habendum is a strange word that sounds more like a physical condition than a clause in a Deed or Oil and Gas Lease. The term springs from early 17th Century Latin, literally translating “that is to be had” or “that must be had”.
DEFINITION:
A habendum clause is simply a clause in a deed or lease that defines the type of interest and rights to be enjoyed by the grantee or lessee. The habendum clause is the part of a conveyance that states the estate or the quantity of interest to be granted. The clause may be titled “HABENDUM CLAUSE” and usually begins with the words “TO HAVE AND TO HOLD.” Therefore, it is sometimes called the ‘TO HAVE AND TO HOLD CLAUSE.”
DEED APPLICATION:
The type of property title transferred using a habendum clause in a Deed is called “fee simple absolute.” Whereas a granting clause contains the words of transfer of an interest, a habendum clause defines the estate granted and declares the extent of the interest conveyed.
EXAMPLE:
If the clause should state: “To have and to hold the premises herein granted unto the party of the second part, and to the male heirs of the party of the second part forever.” This particular clause qualifies the estate granted by limiting its inheritability to male heirs of the grantee.
OIL AND GAS APPLICATION:
In the energy arena, it is the clause establishing the term of an oil and gas lease, in other words, how long the interest granted will extend. One of the most important parts of the clause is the wording “and as long thereafter as oil or gas and associated products are produced.” This language allows for leases to be held by production (HBP), meaning that the lease will be in effect as if in the original or extended term for as long as hydrocarbons or related products are flowing from any well on the defined property.
RECORDING:
Many states require a deed to have a habendum clause in order for the deed to be recorded in the Official Public Records. If you are an attorney or landman, check with the County Clerk or Recorder of Deeds in your particular jurisdiction for recording requirements.
