land in 2 people’s names, can I use it as collateral for a loan without both people’s credit used?

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land in 2 people’s names, can I use it as collateral for a loan without both people’s credit used?

both parties are willing for use as collateral but 1 has bad credit and doesn’t want to have it included

Asked on May 9, 2009 under Real Estate Law, New York

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

How is it in your name's? I.e, joint tenancy? Tenants in common? Make sure you get the other individual's consent in writing to use it as security for a loan.  However, the way it will work is the lender may not agree to loan the monies until both owners are on the loan.  Further, even if the loan is only for one person, let's say the person defaulted, the land as a whole is still security for the loan.  If the lender decides to collect on the defaulted loan, the lender can force a partition or full sale of the land and then pay the overage of sale if any to both owners half and half.


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