A perpetual clause is an obligation aimed at transferring a certain personal obligation of an owner of a certain property to its legal successors. This may be desirable when, for example, future owners of a house also have to maintain their front gardens properly or, for example, the legal successor of a shareholder also has to accede to a shareholders' agreement.
Chain clauses consist of two elements
- the obligation, which may involve all kinds of obligations (e.g. the obligation to paint the fence every year);
- the obligation on the relevant person to also impose the relevant obligation on his legal successors, and then again stipulate that they also impose it on their legal successors.
Generally, a penalty clause is included, based on which a penalty must be paid if the person in question fails to comply with the obligations. Generally, we are therefore talking about a penalty/chain clause.
Chain clauses cannot be registered independently in the land register. However, because they are often included in deeds of delivery or other deeds with registrable provisions, they can be found in the framework. If a chain clause is not imposed, the link is broken and a successor owner is not bound. This is almost always the case if a mortgagee proceeds to foreclosure.
Because a chain clause is much weaker than an easement or qualitative obligation, obligations are generally imposed as easements or qualitative obligations whenever possible.
For more information on penalty/chain clauses, easements or qualitative obligations, please contact us. We will be happy to help you.
