What is an implied covenant?

An implied covenant is a type of agreement that is not stated explicitly in a contract, but is assumed or understood by both parties to the contract. When it comes to property law in Alaska, an implied covenant is more commonly known as an “implied warranty.” This type of warranty means that certain conditions are deemed to be included in the agreement without explicitly being written in. Implied covenants apply to both residential and commercial real estate transactions, and are designed to protect the interests of the buyer. In residential real estate transactions, an implied covenant is often included to protect the buyer should the home fail to meet basic standards for habitability. This includes things like working plumbing, electricity, and a livable interior. In commercial leases and conveyances, implied covenants are used to protect the buyer against hidden defects or non-compliance with zoning. Implied covenants can be both express and implied. An express covenant is an agreement which is stated explicitly in the contract, and is usually a promise to perform certain actions. An implied covenant is more of an inferred understanding between the parties, and is not stated in the contract. An implied covenant can be beneficial to both the buyer and seller in a real estate transaction, as it helps to ensure that both parties’ interests are protected.

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