Borrowers and guarantors in residential, commercial and SMSF transactions are often required to obtain independent legal advice before they can draw down on their loan.
This process involves the borrower or guarantor having a statutory declaration witnessed by a solicitor only after they have received legal advice, to ensure they understand the obligations and risks involved in signing the loan & security documents.
"Lenders want assurance that borrowers and guarantors have understood their obligations under their loan and guarantee documents as it minimises the risk of default and of the borrower avoiding repayment."
Often people assume that they only require a simple 'sign-off' from a solicitor. This is not the case. A solicitor cannot witness the required statutory declaration until after they have reviewed the loan and/or guarantee documents in detail and provided relevant advice to the borrower in conference.
Why is a solicitor's certificate of independent legal advice required?
Lenders want assurance that borrowers and guarantors have understood their obligations under their loan and guarantee documents as it minimises the risk of default and of the borrower avoiding repayment.
The advice also ensures you fully understand the risks associated with the loan and guarantee documents.
The process of getting a solicitor's certificate
We require at least twenty-four (24) hours notice to review the documents between when they are received by our office to when the advice is provided. In urgent situations, such as when settlement is about to take place, we can arrange to have a certificate issued within 3 hours from receipt of all required documentation.
After we review the relevant documents, we will arrange to meet with you to discuss any issues and summarise the key terms. Once you are comfortable with the documents we will witness your statutory declaration to confirm you have received independent legal advice.
At CGC Law, our lawyers are experienced in providing comprehensive legal advice on loan agreements and personal guarantees, whether it is a simple mortgage, business or commercial loan, or limited recourse SMSF loan. We provide advice on loan & guarantee documents from major banks, second tier lenders and third tier private lenders.
Call or email us today to arrange a conference.