A covenant against encumbrances is a vital part of a property conveyance, ensuring that the title to the property is free from any claims, liens, or encumbrances—whether they are visible or not. This guarantee gives the grantee confidence that they are receiving a clear title, meaning that no third-party interests will adversely affect their ownership or enjoyment of the property.
In this context, "visible" encumbrances might include things like easements or leases that are apparent upon inspection, while "invisible" encumbrances can involve things like debts secured by the property that may not be obvious without a title search. Therefore, if a covenant against encumbrances is breached, it could lead to legal disputes or claims that complicate or even interfere with the new owner's use of the property.
The other choices do not accurately reflect what a covenant against encumbrances guarantees. For example, ensuring no missing legal documents pertains to the documentation process rather than the covenants tied to the title. Similarly, guaranteeing that property value will not decrease is not a promise inherent in a covenant against encumbrances; property values are subject to various market forces. Finally, the occupancy of the property by the grantor relates to possession and does not