joint and several liability Liability shared by two or more persons, each being fully liable. Partners are jointly and severally liable for the partnership debts.
joint tenancy with right of survivorship A form of co-ownership with undivided and equal interests. It is similarly to tenancy in common, except that in joint tenancy, the interest of a deceased cotenant passes automatically to the surviving joint tenants in equal shares, regardless of the last will of the deceased. Joint tenancy is created by deed, and the fact of the intention to create a joint tenancy with right of survivorship should be stated. Joint tenancy property does not escape death taxes, but it does escape probate and, in that sense, saves money. However, there are disadvantages associated with the tax treatment of joint tenancy property. See cotenancy.
joint venture A general partnership formed to carry on a specific business project as distinguished from continuing forward from one completed project to another.
judgment The final determination or decision of the court as to the rights and duties of the parties in a lawsuit.
judgment affirmed, modified, or reversed and remanded for new trial The options available for appellate courts relative to cases before them that are on appeal. Affirmance means the winner below (in the trial court) wins again. Reversed and remanded means there must be a new trial on all or specified segments of the case. Modified means that the lower court’s judgment is altered in some way.
judgment creditor A person who has won a judgment but has not been fully paid.
judgment debtor A person against whom a judgment for payment of money has been entered but who has not yet made or completed that payment.
judgment lien A court judgment, that, when recorded, creates a lien against all real estate in that county owned by the judgment debtor. Like all liens, it can involve the forced sale of the real estate. A judgment lien is a cloud on title that is not cleared until a satisfaction of judgment is recorded.
judgment non obstante veredicto, (judgment NOV) [Latin for “notwithstanding the verdict”] A decision by a judge that overrules the verdict of the jury.
judgment-proof Financial condition of a person who lacks the assets to pay any judgment rendered against him or her.
judicial actions and remedies There are numerous court actions (lawsuits) and corresponding remedies available to aggrieved persons. Those that are most relevant to real estate transactions are subtitled and defined below:
ancillary remedies Ancillary remedies make a court's judgment effective. For example, the court may appoint a receiver to collect rent or to possess real estate pending a court trial; or the court may issue an injunction to preserve the status quo pending a court hearing; or the court may impose a constructive trust upon real estate which is then owned by third persons who may be required to return the property to one of the parties to the litigation. When a notice of default is recorded by a lender on a commercial project, the ancillary remedy of appointment of a receiver usually will be made to protect the lender from diversion of the rental income pending foreclosure sale.
breach of contract to buy real estate If a buyer of real estate breaches the contract of sale, the seller may retain liquidated damages (usually called earnest money) if so agreed in the contract. Otherwise, the seller may obtain damages in court equal to the difference between the contract price and the property's value. If there is no difference, there may be no recovery. The weakness of this remedy explains why most sellers prefer forfeitable earnest money as a remedy. For example, if a buyer agreed to pay $100,000 for Greenacre but breached, the seller's damages would be limited to the amount by which $100,000 exceeds the actual market value of the real estate, plus out-of-pocket costs, even if the property had been “tied up” for months prior to the breach.
breach of contract to sell real estate If a seller of real estate breaches the contract of sale, the buyer may elect to sue for damages. Generally, damages recoverable would be any portion of the price already paid plus out-of-pocket costs, or, in some cases, the difference between the agreed price and the actual value of the real estate, (the benefit of the bargain). Usually a disappointed buyer will elect the remedy of specific performance instead of damages.
cancellation of document Cancellation results in termination of a document. Unlike rescission, the parties are not necessarily returned to their original positions. For example, cancellation of an ancient deed of trust, which no longer secures repayment of any underlying debt, will serve only to remove a cloud on title.
damages for negligence Persons involved in real estate transactions may be held liable for damages to victims caused by their negligence. For example, a county building inspector can be held liable for negligently inspecting a structure; an architect can be held liable for negligently designing; a civil engineer can be held liable for negligence in measuring parcels; a real estate broker can be held liable for negligence in calculating fair market value for his principal; and an attorney can be held liable for negligence in drafting a sales agreement.
ejectment This remedy restores the owner of property to its possession by ejecting its occupant. A judgment of ejectment does not determine ownership, it simply ejects any person who is improperly in possession of the real estate. For example, ejectment could be obtained by a lessee against a trespasser who refused to give up possession.
election of remedies A procedural rule of law to the effect that a litigant must sooner or later select unequivocally, one of two or more alternate causes of action. Attorneys are loath to elect one remedy to the exclusion of another because the election may be less than best. In property law, for example, a buyer suing a seller is faced with the alternative remedies of damages for loss of the purchase or for specific performance to compel the purchase. Or, a mortgage creditor who commences a non-judicial foreclosure may be barred from thereafter obtaining judicial foreclosure.
fraud Fraud is improper conduct, such as misrepresentation of a fact as true by someone who does not believe it to be true; misrepresentation of a fact as true by someone carelessly unaware of its falsity; concealment of a fact; making a promise with no intention of fulfilling it; or any other conduct intended to mislead another. Money damages are available to compensate the victim of fraud. Generally, the amount of damages are out-of-pocket losses, such as the difference in value between assets which the victim gave and received in the deal. Lost future profits and punitive damages also may be recoverable.
interpleader A legal proceeding under which an escrow can place all escrowed documents and monies into court and thereby force the parties to the escrow to settle their grievances there. The escrow is said to interplead the parties. For example, if the buyer's and seller's instructions disagree as to the purchase price, and if each demands the escrow to close in their respective favor, the escrow will interplead the parties and remove itself from the dispute.
landlord remedies A landlord has a number of judicial remedies available to deal with improper conduct by a tenant. These remedies are found in state statutes and vary significantly among the states. Generally, a landlord may recover money damages from a tenant who commits waste upon the property, or who fails to repair damages caused by lack of ordinary care, or who fails to pay rent. Unlawful detainer or ejectment may be brought to evict a tenant who wrongfully fails to leave. A lease is a variety of contract, a landlord may sue for damages for its breach.
lis pendens A party to a lawsuit concerning the right to possession of real estate may record, at the time of commencing the litigation, a Notice of Pendency of Action, called a lis pendens. Because the document is recorded in the official records of the county, it confers construction notice to the world that the litigation is pending and that it concerns the title to or possession of that specific property. It thus becomes a cloud on the property, and any subsequent purchaser acquires his interest subject to the superior rights of the parties in the lawsuit. For that reason, buyers ordinarily shun real estate that is tied up in litigation with a recorded lis pendens. State laws provide methods for a landowner to remove a lis pendens by posting a bond adequate to guarantee the plaintiff from any loss if the real estate is sold during the litigation. And a lis pendens filed wrongfully, for the ulterior purpose of creating a cloud on an owner's property, may be expunged from the records by court order. In reality there has been a history of abuse by attorneys knowingly filing lis pendens to tie up real estate to force settlement of an action. Attorneys are privileged by statute to do such things and cannot be sued even if they admit their wrongdoing. Such conduct is, of course, unethical.
partition A judgment of partition physically divides land owned by co-owners of undivided interests. For example, tenants in common are co-owners of undivided interests in their parcel. Each has the right to possession of the entire parcel and neither can exclude the other from its benefits. If they come to a total disagreement, either co-owner can ask the court to partition the parcel and create separate parcels for each. If the court is unable, rationally, to physically divide the parcel, it will cause the property to be sold at public sale and divide the proceeds of the sale in proportion to the ownership interests. This remedy is available to joint tenants and tenants in common, but is not available to divide marital property.
quiet title A judgment of quiet title identifies each person who owns an interest in a parcel of real property, and sets forth the nature of that interest, such as ownership of a life estate. Any claims of conflicting ownership are resolved.
reformation of contract A judgment of reformation corrects a contract, or document such as a deed, to say what the parties involved intended for it to say. The parties then continue in their relationship. If the parties thought their promissory note did not contain a due-on-sale clause, but discovered that one was included in its boilerplate, it could be reformed to reflect their true understanding.
rescission of contract Rescission is a remedy that results in erasure of a contract. Each party to the contract is restored to his original position. Consideration either party to the contract had received must be returned to the other. The entire contract, and whatever documents are involved, are terminated. For example, a contract to build a duplex, which was obtained through fraud, may be rescinded by the innocent party who will receive a refund of any deposit advanced.
slander of title Money damages may be awarded to an owner of real property whose ownership has been disparaged by words or by conduct of another. The disparagement must create a cloud upon ownership. For example, a person who intended to bid on the purchase of a parcel of real estate at a forthcoming auction and who wrote letters to other prospective bidders contending that he already had an option to buy the property, could be held liable for slander of title. Slander of title is an intentional tort and may result in punitive damages against the wrongdoer.
specific performance A judgment of specific performance compels each party to a real estate contract to fulfill each promise contained in the underlying agreement. For example, a buyer may obtain specific performance of a contract to purchase land from a seller who has wrongfully reneged. On the other hand, not every contract is specifically enforceable. For example, a court of equity will not enforce a promise by a builder to build a custom home because the court recognizes the impossibility of enforcing its judgment. There are too many variables in such a promise for the court to monitor.
tenant remedies A tenant has a number of remedies available to deal with improper conduct by a landlord. These remedies are found in state statutes and vary significantly among the states. Generally, a tenant may bring an action to be placed in possession if physically removed, or for money damages from a landlord who disconnects utilities, or who breaches any term of the lease, such as a covenant to repair, or who negligently fails to protect the tenant from criminal activities. In a few states, including California, a tenant may make neglected repairs and deduct their cost from their rent.
trespass An owner of real property may recover money damages from a trespasser who has damaged his property, either permanently (as by cutting down a tree) or temporarily (as by diverting surface water). A court may award punitive damages against a trespasser.
judicial foreclosure See foreclosure.
judicial sale The sale of real estate under court order following a judicial foreclosure. Following the sale, the debtor retains the right of equity of redemption for a period of time, often a year, during which time he may effectively repurchase the property. This lingering equity of redemption is a cloud on the title, and it may be bought and sold as any other interest in real property.
jumbo loan A loan larger in amount than is typical for the type of transaction in question, such as the purchase of a home. It is also any home loan that is too large to be sold in the secondary mortgage market.
junior lien Any lien with low priority. For example, a recent judgment lien would have a low or junior priority as against earlier deeds of trust.
jurisdiction The power of a court to decide controversy and to
award appropriate relief. Jurisdiction may also refer to the geographic
area in which the court has authority and the types of cases it has power
to hear.
jury instructions Rules of law and charges provided by the judge
to the jury for guidance in reaching a verdict. The instructions
include essential facts that the law applicable to the cause of action.
jury trial Trial in which lay persons, instead of the judge, make the determinations of fact and thereby determine the winner and loser in litigation. There is a right to trial by jury in certain cases, but not in other cases.