What is the purpose of a covenant against encumbrances?

The purpose of a covenant against encumbrances is primarily to assure the grantee that the title to the property is clear and free of any undisclosed claims, liens, or other encumbrances that may affect their ownership rights. This covenant is a crucial component of real estate transactions, as it provides a layer of protection for the buyer against potential claims or legal issues that could arise from previous owners or third parties.

If the covenant is breached, it implies that there are existing encumbrances that were not disclosed at the time of the transaction, which could inhibit the grantee's ability to use or enjoy the property fully. This assurance of a clean title is essential for the grantee to have confidence in their ownership and to avoid future disputes or financial burdens related to unresolved claims on the property.

In this context, the other options do not accurately capture the core function of a covenant against encumbrances. For instance, guaranteeing rental income pertains to lease agreements rather than ownership covenants, specifying property boundaries relates to surveys and descriptions rather than encumbrances, and retaining rights to the property is more indicative of a life estate or other forms of limited ownership, which does not align with the purpose of assuring a clear title.