What does the covenant against encumbrances ensure?

The covenant against encumbrances is a fundamental provision found in property deeds and real estate transactions. It assures the grantee (the buyer) that the property being conveyed is free from any undisclosed encumbrances, such as liens, mortgages, or other claims that could affect the title or use of the property. This covenant provides peace of mind to the buyer, ensuring that they will not face unexpected financial obligations or legal issues related to the property after the sale.

When a grantor makes this covenant and later it is discovered that there were undisclosed liens, the grantor may be held liable, allowing the buyer to seek remedy or compensation. This protection is vital in real estate transactions as it helps to establish clear and marketable title, which is essential for the buyer’s security and ability to utilize or resell the property in the future.

In contrast, other choices focus on aspects that are not covered by the covenant against encumbrances, such as restrictions on future sales or improvements, or issues pertaining to taxes, which are not relevant to this specific covenant.