Commonly Misunderstood Real Estate Terms

One of the most frustrating aspects of real estate, as well as other legal ventures, is the expectation that all those who are in any way participating in the exchange of real estate (including renters, owners, landlords, and tenants) are automatically savvy with the associated ‘lingo’. Common complaints of those buying or renting a home is the lack of understanding they initially carry into conversations and negotiations with lenders, agents, or other involved individuals.

The sheer length of an article or exposition laying out all real estate terms would be substantial; if such is needed, a real estate agent or property manager is most likely the better source, but listed below are four commonly misunderstood phrases that perhaps will shed light on some real estate questions or concerns:

Joint and Several Liability

This term comes into play when there is more than one individual on a tenancy agreement. Contracts must be drawn up in such a way that no grey area exists as to who is responsible and accountable for specified roles, particularly payment. When two or more tenants carry Joint and Several Liability, this translates to each individual on the contract being individually responsible for ALL the rent and other associated costs (including that of damages), not just what would compile their share. For instance, if four tenants had signed, if three of them for whatever reason fail to pay, the fourth tenant is responsible for the entire amount, not just 25%.

Forfeiture Clause

This entails a more aggressive grip of ownership and tenancy than per usual. Ordinarily, if a tenant failed to pay rent consistently, a landlord or agent cannot simply take ownership; they must comply with the standard obligations of serving notice and eventually obtaining a court order. However, with a Forfeiture Clause, if 14 days or more have elapsed since the tenant paid their overdue rent, the right is present to actually re-enter the property and take possession of it. This allows a landlord or agent to have more control over their properties, but is done at the expense of the tenant. This might make said tenant slightly less likely to sign the lease or contract.

Access and Inspection

Agents and landlords have the responsibility to carry out inspections on a home; this is a critical role they play legally in the real estate exchange. Because that is part of their right, they are legally given Access and Inspection to houses they steward over, but in order to protect the tenants, a bare minimum of 24 hours must be given to carry out the inspection. Mutual consent must be present, typically at a date and time agreeable to both parties.

Quiet Enjoyment

Very simply put, the right to Quiet Enjoyment connotes that those individuals specifically named on the tenancy agreement have full rights and access to live in a property, at least for a specific amount of time, with zero interference. An agent, landlord, or other person acting on their behalf cannot enter during these periods unless specifically allowed. Be aware that these terms are critical components of housing contracts, and need to be discussed before signing on the dotted line.

Written by Clif, freelance writer for RPM East Valley