What is the purpose of the Covenant Against Liens and Encumbrances?

The Covenant Against Liens and Encumbrances is primarily designed to ensure that the property being transferred is free of any undisclosed claims, liens, or encumbrances. When this covenant is included in a real estate transaction, it provides a level of protection for the buyer, assuring them that there are no hidden defects related to ownership claims that could impede their rights or use of the property. This is crucial as any existing liens or encumbrances could lead to financial liability or legal complications for the new owner, undermining their investment in the property.

This concept does not directly relate to defining property boundaries, outlining repair responsibilities, or addressing zoning laws, which are distinct areas of real estate that have their own regulations and legal frameworks. The focus of the Covenant is specifically on the transfer of clear title, ensuring that the buyer can enjoy ownership without the worry of additional burdens from past owners or unmet obligations related to the property.