Severally

Definition

In the context of real estate, “severally” refers to separate or individual ownership or responsibility. When parties are said to be severally liable or own property severally, each person takes a distinct and separate share, and each is responsible for his or her own obligations arising from the shared transaction or property. This is different from joint ownership (or joint liability), where all parties share responsibility or ownership collectively.

Examples

Individual Loan Accountability: If two or more parties take out a loan severally, each borrower can be held responsible only for his or her specific share of the debt. If one party borrows $200,000 severally, and the loan defaults, each borrower is only liable for their respective portions, unlike joint liability where each might be on the hook for the total amount.
Property Ownership Distribution: In a scenario where three friends purchase a property severally, each friend owns individual parts of the property. For instance, if one owns 40% and each of the others owns 30%, they each can control, sell, or lease their percentage without needing the consent of the other parties.

Frequently Asked Questions (FAQs)

Q1: What does it mean to own property “severally”?

A1: Owning a property severally means each owner has an undivided, individual interest in the property. Each individual’s share is distinct and separate, giving them independent control over their portion.

Q2: How does severally differ from joint ownership?

A2: In joint ownership, all parties share equal rights and responsibilities collectively, meaning they must act together in decisions about the property. In severalty, each owner acts independently and is responsible only for their share.

Q3: Can severally ownership impact decision-making for property uprights?

A3: Yes, since each owner controls their share, major decisions impacting the entire property could require negotiation or separate actions unless specified otherwise in a partnership agreement.

Q4: Are severally responsibilities reflected on individual credits?

A4: Yes, since the obligations are separate, each party’s credit will only reflect their individual responsibility and performance.

Joint Tenancy: A form of concurrent ownership where two or more parties hold an equal share and undivided interest in the property, with the right of survivorship.
Tenancy in Common: A form of concurrent ownership in which each tenant (owner) holds an individual undivided interest in the property. Each does not necessarily have to hold an equal share but shares will proportionally reflect their interest.
In Severalty: Similar to severally, where an asset (typically real estate) is owned by a single person or entity, as distinct from joint or combined ownership.

Online Resources

References

Investopedia. (2021). “Forms of Co-ownership.” Retrieved from Investopedia website
Nolo. “Forms of Ownership.” Retrieved from Nolo website

Suggested Books for Further Studies

“Real Estate Law” by Marianne Jennings
- Thoroughly explores various legal aspects of real estate, including an in-depth discussion on ownership structures.
“Principles Real Estate Practice” by Stephen Mettling and David Cusic
- Provides foundational knowledge on real estate practices, with a section dedicated to common and unique forms of ownership.
“The Book on Managing Rental Properties” by Brandon Turner
- While largely focused on rental properties, it provides insights on different ownership structures and their practical implications.

Real Estate Basics: Severally Fundamentals Quiz

### What does owning property severally mean? - [ ] Shared responsibility and ownership of assets - [ ] Each owner has an equal, undivided interest - [ ] Joint responsibility for managing the property - [x] Individual ownership and separate interest > **Explanation:** Owning property severally means owning a distinct and separate share in the property, which operates independently from other owners' shares. ### How is liability divided when a property is owned severally? - [x] According to each individual's share - [ ] Equally among all owners - [ ] Based on seniority among owners - [ ] Shared, with joint decision-making > **Explanation:** In several liability, each owner is responsible only for their specific share of the property or debt, unlike joint liability where all parties share equally. ### How does severally ownership affect property decision-making? - [x] Each owner can make decisions independently regarding their share - [ ] All decisions must be made unanimously - [ ] Changes require majority vote among owners - [ ] Decisions are dictated by a property manager > **Explanation:** Severally ownership allows each owner to make decisions independently concerning their share of the property, without needing consent from other owners. ### If a loan is taken out severally by multiple parties, what happens if one defaults? - [ ] All parties are equally liable for the full loan. - [ ] Responsibility is passed to the co-signer. - [x] Each party is only responsible for their specific share. - [ ] The defaulting party's share is forfeit to the others. > **Explanation:** When a loan is taken out severally, each party is only responsible for their specific share, meaning that default by one does not impact the others' obligations. ### What must be in place for property owned severally? - [ ] Joint tenancy agreement - [ ] An LLC structure - [ ] Property management contract - [x] Distinct ownership interests > **Explanation:** Property owned severally means having distinct ownership interests, where each owner’s share is individually defined and controlled. ### Can severally owned property sections be independently sold? - [x] Yes, each owner can sell their individual share. - [ ] No, entire property must be sold collectively. - [ ] Only with unanimous agreement from all owners. - [ ] It’s managed by a court order. > **Explanation:** Each owner under severally ownership can sell their distinct share independently of others. ### What document typically outlines severally owned property shares? - [x] The deed - [ ] A lease agreement - [ ] An appraisal report - [ ] Homeowner association bylaws > **Explanation:** The ownership shares for severally owned property are outlined and specifically detailed in the deed. ### Which kind of ownership involves the right of survivorship inherently? - [ ] Tenancy in common - [x] Joint tenancy - [ ] Leasehold - [ ] Severally > **Explanation:** Joint tenancy involves rights of survivorship, meaning if one owner dies, their share is automatically transferred to the surviving owners, unlike severally or tenancy in common. ### What does each owner need permission for when owning severally? - [ ] Letting property to landlords - [x] No permission needed for their share - [ ] Selling part of shares - [ ] Structural changes only > **Explanation:** In severalty, each owner doesn’t need others' permission for decisions regarding their own distinct share. ### How does severally ownership impact tax payments? - [x] Each owner pays taxes only on their share - [ ] All taxes are paid collectively - [ ] Taxes are pooled and distributed - [ ] There's a special taxation scheme > **Explanation:** Each owner in severally ownership only pays taxes based on their individual ownership share, not and total property value.