Let’s take a look at the language of lenders.
Jointly And Severally
Ever wonder what the lender in a commercial real estate transaction means when the term jointly and severally liable is used? You hear it as a key part of loan terms when there are co-borrowers in a real estate transaction.
The term jointly and severally usually applies to situations when the borrower in a transaction is a) a real person and b) is actually more than one person. In other words, it applies to co-borrowers. It refers to the fact that each co-borrower is fully responsible for repayment of the loan. Specifically, it means each co-borrower is 100% responsible for the full repayment of the loan regardless of borrower ownership fraction in the property. It does not matter if the co-ownership share in the property between, for example, two co-borrowers is 50% each — in the event one of the co-borrowers becomes incapacitated, the other co-borrower is on the hook for repayment of 100% of the loan. Another way to put it is that jointly and severally means the debt is not shared.