Like many terms you encounter in the field of real estate, “joint and several liability” is connected to the law. Its connection to real estate and how it impacts you as a house owner is not quite as evident as you may think it is when you encounter this relatively self-explanatory term.
An obligation entered into by at least two people, making both liable severally and all accountable jointly, is how it is usually defined in law dictionaries. The significance is a lot easier than that definition makes it appear. What it signifies in non-legalese is that a creditor can choose to sue anybody who enters into a contract with one or more other individuals. The whole amount can be sued upon by the creditor either against the group as a whole or versus solely one member of the group. In order to be applicable, this must be stated in the contract’s terms.
Joint and several liability is often learned in Tort Law classes by a lot of law students. How it relates to the property they possess is how most property owners will understand it themselves. When a visitor is hurt on their property and eventually sues for damages, property owners can be held jointly and severally liable. Other times, one property owner can be held jointly and severally liable by the other homeowner for property damage committed against property both individuals own.
Another way to think about it is how individuals can jointly apply for a credit card. If your co-credit card holder doesn’t pay the bill, the credit card company can bind you both accountable and just go after you, despite the fact that it wasn’t any fault of your own. The same is often true for property owned jointly. The scenario described above is where this most commonly comes into play. Much like a credit card, if property is owned jointly and one proprietor fails to pay the mortgage, the lender can sue each of the owners who defaults, and the owner who isn’t in default, or both jointly.
While joint and several liability may appear as though it is entirely unrelated to property, liability for a civil wrongdoing is not where this legal concept ends. Property owners who co-possess property need to make sure so their guests remain safe on it. You must also make sure that anybody with whom you’d like to co-own is financially secure so the mortgage remains getting paid.
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