Why am I required to obtain a solicitor’s certificate? 

To put it simply banks and other lenders want to shift the risk of being sued by you onto a lawyer. This has come about more increasingly because of a case before the courts known as Commercial Bank of Australia v Amadio. In this case a bank guarantee was set aside due to findings that the borrowers or the persons providing the guarantee didn’t fully understand loan documents and their consequences.

When is a solicitor certificate required?

In most instances banks and lenders will require a guarantor to guarantee a loan when the borrower is either a company, the borrower has insufficient equity or lacks borrowing capacity.

When the borrower is a company, banks or lenders will require the director of the borrowing company to provide their own personal guarantee. In some instances these guarantees will also require either a first or second mortgage over the guarantors personal property.

Before the lender advances any monies it is generally a requirement that the guarantors obtain independent legal advice and after receiving this advice the guarantors are issued with a solicitor certificate. Our expert solicitors understand the risks associated with being a guarantor on a loan. They can provide you with comprehensive legal advice so you can understand your rights as well as your obligations and the risks associated with giving your personal guarantee to a lender.

Lenders have an obligation to disclose to guarantors the possible risks, costs and interest that guarantors may be liable for. Here are some links to the major lenders which explains their products associated with providing a guarantee:

• CBA Guarantor Support
• ANZ Home Loan Guarantors
• Westpac Guarantors
• NAB Guarantor