Joint Endorsement

What is Joint Endorsement?

The joint endorsement refers to a mandatory requirement that is a check needed to be signed by both the parties for the purpose of deposit or withdrawing that has been made out to joint account. A joint account defines as the bank account or brokerage account that has been shared between two or more individuals. The main motive of the joint endorsement is to stop one party from depositing or withdrawing a check without informing or taking permission of the other party to whom and why the check is made out. As per the requirement of joint endorsement, both the parties of a joint account have to sign on the back side of the check. If the check is not signed by both the parties, it will not accept by the bank for the further process.

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Understanding Joint Endorsement

When it comes to share an account, there are certain rules to make sure that all the parties of joint account should be aware about all the transactions of an account like deposit or withdrawal of a check. A joint endorsement is one of those important rules, according to that any check deposited or withdrawal from a joint account has to be signed by all the parties or the account holders of joint account. The basic rule of a joint endorsement is required to ensure that all parties or account holders have the knowledge about what goes on with their joint account.

The actual rules of joint endorsements are different from state to state, and some cases they vary from bank to bank. The requirements for opening a joint account are different depending on the state or in some cases depending on the bank. A joint endorsement is also applied in some certain or specific checks too. The requirement of the joint endorsement is depended on the way of writing a check. As per the legal convention, in the two account holders name of a joint account on a check are written by using the words like “and”, “&”, “+” (Mr. A  and Mr. B), (Mr. A & Mr. B) or any associated symbol, in that case the bank need to follow rule of joint endorsement. On the other hand, if the check is written by using comma in that case any party from the joint account can endorse the check. It is not necessary that all the banks follow these conventions and may ask joint endorsement in any case.

There are some cases when all the parties of a joint endorsement are not able to available together at the same point of time to endorse the check. In such kind of cases, a bank may work with both the parties separately or can ask for reissuing the joint check, made out independently to each part of the joint endorsement.

Frequently Asked Questions (FAQs)

What is the role of Joint Endorsements in Landlord-Tenant Transactions?

The joint endorsements usually issued in the landlord-tenant relations as many living situations involve the tenants who are not married, but are roommates who share all the bills. At the time of breach of rent agreement, when the landlord returns the amount of security deposit to its tenants, the check is written out on the names of all the tenants. The names of tenants are recorded on the lease by using the word “and”, “&” and other associated words between their names. The term JT stands for joint tenants. In the Landlord-Tenant Transactions, a problem arises in front of the landlord when the tenants have separate bank accounts because the check can be deposited only in one account.

In this situation, a refund check must be jointly endorsed by both the tenants prior to deposit to anyone’s bank account or the depositor may write a separate check back to the other tenant.

How Joint Endorsement Works?

The joint endorsement is the mandatory requirement followed by banks in the case of joint accounts in order to make sure that all the account holders or parties are aware that someone is withdrawing and depositing a check it into their joint account. If two or more individuals open an account together in a bank, then it is referred as joint account.

In case of joint account, a bank may need a joint endorsement on checks for processing it. In simple words, we can say that a bank needs all the parties or account holders to sign a check in order to be cashed or payable to any other account. As per the requirement of joint endorsement, both the parties of joint account have to sigh on the back side of the check, in the case any one  of the party is not able to signed  the check, it will not accept by the bank for the further process. For instance, if a check is made out from a joint account of two people like Mr. A and Mr. B, then both Mr. A and Mr. B have to sign the check in order to deposit or withdraw it.