What type of clause is most often found in leases and mortgages for the purpose of cancelling a right upon repayment?

The correct answer is the defeasance clause, which is commonly found in leases and mortgages. This type of clause serves a specific purpose: it automatically cancels or nullifies an obligation or right upon the fulfillment of a condition, such as the repayment of a loan. In mortgage agreements, when the borrower pays off the mortgage in full, the defeasance clause indicates that the lender's rights to the property are extinguished, effectively releasing the borrower from the mortgage obligation.

This clause is important as it provides clarity and protection for both parties involved. For borrowers, it assures them that once they complete their payments, they own the property free and clear. For lenders, it establishes a clear process for concluding their interest in the property once the debt is satisfied.

In contrast, an alienation clause pertains to the transfer of property ownership, a variance clause deals with zoning and land use, and a hypothecation clause relates to securing a loan with collateral but does not cancel a right upon repayment. Understanding the context and functionality of the defeasance clause highlights its critical role in real estate transactions.