Chain clause

With a chain clause, parties can agree that an obligation of one of them, upon delivery of an immovable property, passes to the transferee and to subsequent transferees. Consider, for example, the obligation to become a member of the management association of a vacation park when you buy a vacation home. Or the obligation to tolerate that the neighbor drives his garbage container through your plot to the street. A chain clause often gives rise to disputes and protracted lawsuits. Therefore, get advice in time. Not only at the beginning when a chain clause is chosen, but also in good time when a conflict threatens to arise.

Chain clause is a contractual obligation

The major difference between a chain clause and a right in rem such as a easement, is that a chain clause has only contractual effect. A right in rem is ‘attached’ to the thing, so to speak, and the obligation or right goes automatically with the ownership of that thing. This is different with a chain clause. Two parties, buyer and seller, have agreed in the purchase agreement agreed that the buyer will include a certain obligation incumbent on him in the future purchase agreement. In addition, he must ensure that his buyer includes that provision in the subsequent purchase agreement.

Chain clause as strong as weakest link

If this is always done properly, future buyers are also bound by the obligation. But, if the perpetual clause is not included in the next agreement, then the one for whom the perpetual clause was made is empty-handed. At most, he can still appeal to default and claim damages, but that is where it ends. Therefore, compliance with the chain clause and the inclusion of the obligation in successive agreements, is also often sanctioned with a hefty contractual penalty.

Penalty for violating chain clause

Because a chain clause applies only between those who made the agreement, a penalty clause is often included as part of the purchase agreement. If the buyer has not complied with the terms of the chain clause, he must pay a penalty to the seller. Thus, full protection is not provided by a chain clause.

Alternative to chain clause

Safer - but often more costly - is to have a easement to be established. This is a right in rem that binds the owners of both parcels to which the clause applies. However, an easement is not suitable for all obligations. Therefore, the qualitative obligation. That can be seen as a kind of intermediate form.

Advice and assistance of attorney chain clause

The lawyers at Lexys Lawyers can advise you which legal figure is the best option in your case. Should there already be a chain clause and it has been breached, the lawyer can assist you to ensure that it is still complied with. In addition, any fine owed can be collected for you.