Guarantee to Lender relating to Mortgage Loan

The document titled 'Guarantee to Lender relating to Mortgage Loan' is a guarantee and indemnity agreement entered into between the Guarantor and the Lender. The purpose of this document is to provide a guarantee and indemnity in respect of the obligations and liabilities of a loan granted or to be granted by the Lender to the Borrower. The document is intended to take effect as a deed.

 

The document begins with an interpretation section, which defines various terms used throughout the guarantee. These terms include 'additional loan', 'borrower', 'borrower liability', 'business day', 'debt', 'expenses', 'guarantee', 'guarantor liability', 'loan', 'mortgage', 'mortgage conditions', 'other security provider', 'person', and 'property'. The definitions ensure clarity and understanding of the terms used in the guarantee.

 

The consideration section states that the Guarantor agrees to provide the Lender with a guarantee and indemnity in consideration of the Lender agreeing to grant or continue to grant the loan to the Borrower. This section establishes the basis for the Guarantor's obligations under the guarantee.

 

The guarantee section outlines the Guarantor's obligations. It states that the Guarantor guarantees the payment of the debt when it becomes due and payable by the Borrower. The Guarantor agrees to pay the debt immediately upon written demand from the Lender. The Guarantor also agrees to pay the expenses immediately upon demand from the Lender. The section further clarifies that the Lender does not need to demand payment from the Borrower first or take any other action to obtain payment before demanding payment from the Guarantor.

 

The indemnity section establishes that the Guarantor is liable to the Lender as if the Guarantor were the principal debtor for the whole amount of the debt. This means that the Guarantor has a primary and direct obligation to pay the debt, regardless of the Guarantor's status as a guarantor. The section emphasizes that the Guarantor's obligation under the indemnity is separate from and independent of the guarantee.

 

The document also addresses additional loans, stating that the guarantee and indemnity cover the full amount of the debt and expenses, including any additional loans made by the Lender to the Borrower. The Guarantor's liability to repay the debt is not affected by the Lender making additional loans without the Guarantor's written approval.

 

The guarantee and indemnity are stated to be independent of any other security held by the Lender in connection with the debt. The Lender has the right to choose which security to enforce and the order of enforcement. The Lender is not obliged to enforce any other security or take any other steps before enforcing the guarantee.

 

The document includes provisions regarding the postponement of the Guarantor's rights, deductions from other credit balances and lien, the Lender's claim against the Borrower, the continuing nature of the guarantee and indemnity, the creation of a suspense account, and the effect of the Lender's actions or omissions on the Guarantor's liability.

 

The document also addresses the effects of bankruptcy or insolvency laws, payments without deduction, application of payments, the binding effect of signing the guarantee, disclosure of information, the Lender's power to assign or transfer its rights and obligations, the unenforceability of certain terms, termination of the guarantee, payment in other currencies, and the absence of rights under contracts for third parties.

 

The guarantee includes a choice of law and jurisdiction clause, stating that the guarantee is governed by the laws of a specified jurisdiction and any disputes arising out of or in connection with the guarantee shall be subject to the exclusive jurisdiction of the courts of that jurisdiction.

 

The document concludes with signature and witnessing provisions, as well as a schedule that provides details of the borrower, loan agreement, and property.

 

Each section of the document serves a specific purpose in establishing the Guarantor's obligations, the Lender's rights, and the terms and conditions of the guarantee and indemnity. The document is comprehensive and ensures clarity and certainty in the relationship between the Guarantor and the Lender.

How to use this document?

1. Understand the purpose: The document is a guarantee and indemnity agreement entered into between the Guarantor and the Lender to provide a guarantee and indemnity in respect of a loan granted or to be granted by the Lender to the Borrower.

2. Familiarize yourself with the definitions: The document includes various definitions that clarify the meaning of terms used throughout the guarantee. Make sure to understand the definitions to ensure clarity and understanding.

3. Review the consideration section: The Guarantor agrees to provide the Lender with a guarantee and indemnity in consideration of the Lender agreeing to grant or continue to grant the loan to the Borrower. Understand the basis for the Guarantor's obligations.

4. Understand the Guarantor's obligations: The Guarantor guarantees the payment of the debt and agrees to pay the debt and expenses immediately upon demand from the Lender. The Guarantor's obligations are separate from and independent of the guarantee.

5. Consider additional loans: The guarantee and indemnity cover the full amount of the debt and expenses, including any additional loans made by the Lender to the Borrower. The Guarantor's liability is not affected by the Lender making additional loans without the Guarantor's approval.

6. Note the independence of the guarantee and indemnity: The guarantee and indemnity are independent of any other security held by the Lender. The Lender has the right to choose which security to enforce.

7. Understand the provisions regarding the postponement of the Guarantor's rights, deductions from other credit balances and lien, and the Lender's claim against the Borrower.

8. Note the continuing nature of the guarantee and indemnity: The Guarantor's obligations continue until full payment of the Guarantor liability, regardless of certain events or circumstances.

9. Familiarize yourself with the provisions regarding the creation of a suspense account and the effect of the Lender's actions or omissions on the Guarantor's liability.

10. Consider the effects of bankruptcy or insolvency laws and the payments without deduction provision.

11. Understand the application of payments and the binding effect of signing the guarantee.

12. Review the provisions regarding the disclosure of information and the Lender's power to assign or transfer its rights and obligations.

13. Note the unenforceability of certain terms and the termination provision.

14. Understand the payment in other currencies provision and the absence of rights under contracts for third parties.

15. Consider the choice of law and jurisdiction clause.

16. Ensure proper execution and witnessing of the guarantee.

17. Review the schedule for details of the borrower, loan agreement, and property.

18. Seek legal advice if necessary: It is recommended to seek independent legal advice before signing the guarantee to fully understand the nature and effect of the document.