No guarantee that it’ll all go smoothly23 Oct 2019 // In the press
George de Stacpoole features in Estates Gazette.
While guarantees may be commonplace in certain real estate finance arrangements, the taking of a guarantee does not come without pitfalls. Corporate Solicitor George de Stacpoole gives his expert advice on the potential difficulties that can result from the grant of a guarantee.
George discusses the initial considerations, stating "Conceptually, guarantees are not difficult to understand they constitute a promise by the guarantor to pay a lender if a borrower fails to do so. The guarantor’s obligation to pay – the guarantee – is therefore dependent on the validity of the borrower’s primary obligation to pay the lender. Where that primary obligation to pay is, for any reason, unenforceable, there is nothing for the guarantor to guarantee. To address this risk to the lender, almost all guarantees will contain an indemnity."