In the field of real estate, you'll encounter many legal terms, and "joint and several liability" is one of them. Its relation to real estate and how it affects you as a home owner is not quite as intuitive as you may think of this relatively self-explanatory word.
The term is often described in law dictionaries as a way to make two or more people who enter into an obligation liable severally and jointly at the same time. Its meaning is actually quite simple. In non-legalese, joint and several liability simply explains how a creditor can sue anyone who enters jointly into a contract, at their option. The entire amount can be sued upon by the creditor against the group as a whole or solely one member of the group for the entire amount. For it to apply, though, the contract terms must state this.
Most law students learn about joint and several liability through their course in Tort Law. Most homeowners will understand it in terms of how the term relates to the property they own. Homeowners can be held jointly and severally liable in some instances when a guest is injured on their property and subsequently sues for damages. Other times, one homeowner can be held jointly and severally liable by the other homeowner for property damage committed against property both people own.
A different way to think about it is how people can jointly apply for a credit card. The credit card company can attempt to obtain money from both card holders or, a more likely scenario, they can go after the one person who is in a better financial situation to pay the bill. Property owned jointly often ends up coming out the same way. The situation described above is where this most commonly comes into play. The lender can sue the owner in default, the owner who isn't, or both jointly, just like in the credit card scenario above.
Even though the term doesn't seem to relate to property at first sniff, this legal concept does not end at liability for a civil wrongdoing. Homeowners who co-own property need to take care so their guests remain safe on it. Avoid the pesky little legal term entirely by making sure anyone with whom you're considering co-owning property is financially stable to ensure the mortgage is paid on time each month.
The term is often described in law dictionaries as a way to make two or more people who enter into an obligation liable severally and jointly at the same time. Its meaning is actually quite simple. In non-legalese, joint and several liability simply explains how a creditor can sue anyone who enters jointly into a contract, at their option. The entire amount can be sued upon by the creditor against the group as a whole or solely one member of the group for the entire amount. For it to apply, though, the contract terms must state this.
Most law students learn about joint and several liability through their course in Tort Law. Most homeowners will understand it in terms of how the term relates to the property they own. Homeowners can be held jointly and severally liable in some instances when a guest is injured on their property and subsequently sues for damages. Other times, one homeowner can be held jointly and severally liable by the other homeowner for property damage committed against property both people own.
A different way to think about it is how people can jointly apply for a credit card. The credit card company can attempt to obtain money from both card holders or, a more likely scenario, they can go after the one person who is in a better financial situation to pay the bill. Property owned jointly often ends up coming out the same way. The situation described above is where this most commonly comes into play. The lender can sue the owner in default, the owner who isn't, or both jointly, just like in the credit card scenario above.
Even though the term doesn't seem to relate to property at first sniff, this legal concept does not end at liability for a civil wrongdoing. Homeowners who co-own property need to take care so their guests remain safe on it. Avoid the pesky little legal term entirely by making sure anyone with whom you're considering co-owning property is financially stable to ensure the mortgage is paid on time each month.
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