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Independent Legal Advice - Personal Guarnatee

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Independent Legal Advice - Personal Guarnatee

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it’s important to remember that the ILA is given, ultimately, for the benefit of the lender or counterparty, and ensures that the director’s guarantee is enforceable by them.

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Personal Guarantees can be required for a variety of reasons, but often Independent Legal Advice is required when you're trading as a limited company which is borrowing money or entering into a financial commitment, such as:

A mortgage - including buy-to-let 'BTL' mortgages, development loans, etc;

A start-up loan, or some other business loan;

A new company credit card or overdraft;

A lease of premises taken by the company requiring a personal guarantee;

A lease or HP agreement for a new company vehicle or business equipment;

An asset sale agreement or other forms of commercial contracts requiring a personal guarantor (for example to underwrite warranties given by a company).

Many people don't see it in these terms, but in law, your limited company is a separate legal "person" to you. It can incur debts on its own behalf and in its own right, and, in the vast majority of cases, you're not personally liable for the debts of a company as its director or shareholder - instead, you are said to be "behind its 'veil' or incorporation", with no personal responsibility.

It can be very useful to trade as a limited company, as you can protect yourself from liability if things go wrong, but there's a flip-side, in that your company is not itself a credit-worthy borrower, and it is unlikely to have significant assets of its own right. This makes anything other than very successful, long-established, "blue chip" companies, a significant credit risk for lenders and other counterparties to financial agreements.

Accordingly, most lenders (and a large number of landlords and other parties dealing with smaller limited companies) require, as a condition of entering into the lending arrangement, a director or shareholder (or in some cases several of them) to stand as guarantors for the borrowing company. The guarantees taken by lenders and other counterparties can:-

be in "all monies" form - i.e. for an unlimited in amount;

be for a limited sum;

cover current, existing and/or future liabilities;

be given solely by one guarantor, or by several, often on a "joint and several" basis.

Of course, the director or shareholder that's asked to give the guarantee is often (although not always) well appraised of their company's circumstances, and accordingly, often directors are reluctant to spend money taking legal advice being advised on a proposal of which they are acutely aware, often seeing it as superfluous. However, it's important to remember that the ILA is given, ultimately, for the benefit of the lender or counterparty, and ensures that the director's guarantee is enforceable by them, so that they don't lose their money by lending to a company that turns out to be unable to repay.

Due to case law, guarantees often are not enforceable if Independent Legal Advice has not been given to the Guarantor, so most lenders in the UK insist that Independent Legal Advice is taken by anyone giving a director's guarantee as a condition of the loan being made. Most lenders, for understandable reasons, will not deviate from the strict requirement that ILA must be taken in these circumstances.

By giving a Guarantee, the director or shareholder becomes personally liable for the monies borrowed by the borrowing company, or for the other financial obligations (such as leases and HP agreements) it enters into and which they agree to guarantee.

There can be circumstances where someone who is not a shareholder (i.e. owner) of a company, is asked to guarantee the debts of a Company, either in their capacity as a non-owning director of the company, or as a third party participant. Anyone facing this request needs to consider their circumstances very carefully, and may be advised (as a minimum) to seek cross guarantees and security from the borrowing company or from some other party. Our network of advisors can assist in providing the advice that will properly guide you through this process, and will ensure you're put on the right footing.

Director's and shareholder guarantees are very common in the commercial world and in most cases, they do not end in disaster for the directors signing them. However, lenders need to be sure that these obligations are enforceable, and consequently, Independent Legal Advice is generally required.

Due to the complexity of some commercial arrangements, taking Independent Legal Advice on a personal guarantee can often be needlessly expensive, and many law firms are reluctant to advise guarantors whatsoever in these circumstances, making it hard to find a solicitor that will provide the Independent Legal Advice you need.

At ILA Connect, we're more than happy to help. We can arrange the advice you need rapidly, with minimum inconvenience, and at a reasonable price. Furthermore, very often we can arrange that Independent Legal Advice is provided to you in the comfort of your own home, by way of a short online meeting, at competitive rates, saving you money and wasted time.

The circumstances surrounding personal guarantees can sometimes be complex and convoluted, but often the matters at hand are routine, and help is at hand from ILA Connect.

Our extensive experience places us in an excellent position to understand your requirements and your circumstances. We will arrange for one of our expert panel solicitors to provide Independent Legal Advice to you using our online meeting service, in the comfort of your home, at a convenient time to suit you.

If you're happy to proceed, we will set up an appointment at a time to suit you with our panel solicitors and we can then certify to your lender that the formalities have been dealt with, thereby enabling them to proceed with the credit facility your company needs. At ILA-Connect, fortunately, we've made it quick, easy and convenient for you to receive ILA at a moment's notice. Simply Book Now or get in touch with us at [email protected] or call our office on 0333 300 1879 and we get straight back to you!

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Director or Personal Guarantee - ILA Connect

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Personal Guarantees can be required for a variety of reasons, but often Independent Legal Advice is required when you're trading as a limited company which is borrowing money or entering into a financial commitment, such as: A mortgage - including buy-to-let 'BTL' mortgages, development loans, etc; A start-up loan, or

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Other Independent Legal Advice by ILA-Connect

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Other Independent Legal Advice by ILA-Connect

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At ILA-Connect, we are able to arrange the necessary independent legal advice on a bespoke basis.

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There are many situations under commercial contracts or transactions where one of the parties involved may be concerned that one or more of the other parties could potentially claim, after the deal is done, that he or she did not properly understand the nature or consequences of the deal, or perhaps that he or she was under unfair pressure or influence from one of the other parties involved to go ahead with the deal. This could potentially result in litigation arising in connection with the contract after it has been completed.

In such situations, the way it is often seen as best to offset the risk of such a claim is to insist that the relevant party receives independent legal advice from a solicitor regarding the nature and consequences to the individual of the contractual arrangements, and to ensure that he or she is proceeding with full understanding, of his or her own free will and not as a result of undue influence from someone else.

At ILA-Connect, we are able to arrange the necessary independent legal advice on a bespoke basis. Just get in touch with us with the details and we'll take it from there.

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Other Independent Legal Advice - ILA Connect

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There are many situations under commercial contracts or transactions where one of the parties involved may be concerned that one or more of the other parties could potentially claim, after the deal is done, that he or she did not properly understand the nature or consequences of the deal, or perhaps that he or she was under unfair pressure or influence from one of the other parties involved to go ahead with the deal.

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Joint Borrower Sole Proprietor Mortgage Advice by ILA-Connect

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Joint Borrower Sole Proprietor Mortgage Advice by ILA-Connect

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Joint Borrower Sole Proprietor mortgages are becoming more and more common as family members help their relatives onto the housing. ILA-Connect is the UK’s leading provider of Independent Legal Advice, and we deal with hundreds of these each week.

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Independent Legal Advice - Joint Borrower Sole Proprietor Mortgage
Joint Borrower Sole Proprietor mortgages are becoming more and more common as family members help their relatives onto the housing ladder by acting as a supporting borrower for their mortgage, but without taking ownership of the property. This structure can also save thousands in Stamp Duty Land Tax by avoiding the higher rate for additional properties.
Your lender will always require the supporting borrower to take Independent Legal Advice, which is where we can help. ILA-Connect is the UK's leading provider of Independent Legal Advice, and we deal with hundreds of these each week.

We work with Joint Borrower Sole Proprietor mortgages from:

Barclays Bank - HSBC Bank - Metro Bank - Virgin Money - Family Building Society - Hinkley & Rugby Building Society - Darlington Building Society - Vida Home Loans ...... and many other mortgage lenders providing Joint Borrower Sole Proprietor mortgages in the UK mortgage market.

Our goal is to provide your ILA as quickly and cheaply as possible and in the comfort of your home or office, via video conference call e.g. Zoom, Skype, Facetime or WhatsApp video calling

We've helped thousands of people just like you with their Joint Borrower Sole Proprietor Independent Legal Advice.

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Joint Borrower Sole Proprietor Mortgage - ILA Connect

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Independent Legal Advice - Joint Borrower Sole Proprietor Mortgage Joint Borrower Sole Proprietor mortgages are becoming more and more common as family members help their relatives onto the housing ladder by acting as a supporting borrower for their mortgage, but without taking ownership of the property.

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Settlement Agreement Advice by ILA-Connect

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Settlement Agreement Advice by ILA-Connect

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We recognize that our success is dependent on the success of our clients. For this reason, we work alongside our clients to build strong connections and fiercely guard their interests. Our solicitors excel at identifying the unique needs of our clients and matching solutions in an expeditious and pragmatic manner.

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Settlement Agreement or Compromise Agreement

Are you in negotiations with your employer regarding the ending your employment, and needing to sign a 'Settlement Agreement'?

We appreciate that this is a stressful time for you. Often, the situation may have developed rapidly, and you may have concerns about the future.

You're in the right place! ILA-Connect is the UK's leading specialist provider of Independent Legal Advice.

Our panel employment solicitors are industry-leading experts, at the pinnacle of their field.

We've helped thousands of people obtain clear, concise and accurate legal advice on their Settlement Agreements, and in many cases, our panel solicitors can improve your settlement offer.

What's more, our panel solicitors provide the legal advice to you as quickly as possible and in the comfort of your home or office, via video conference call e.g. Zoom, Skype, Facetime or WhatsApp video calling. Everything is done online, including signing documents, which makes it as quick and easy as possible.

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Settlement Agreement Solicitors | Settlement Agreement Advice | ILA-Connect

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Settlement Agreement or Compromise Agreement Are you in negotiations with your employer regarding the ending your employment, and needing to sign a 'Settlement Agreement'? We appreciate that this is a stressful time for you. Often, the situation may have developed rapidly, and you may have concerns about the future.

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Deed of Consent and Charge by ILA-Connect

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Deed of Consent and Charge by ILA-Connect

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Our firm's culture of supporting our clients is very important to us and we work hard to nurture and develop it. We don’t look at you and wonder how we can make more money out of them, we do what’s commercially sensible and take steps to advise and protect you.

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The requirement for occupiers to waive their rights of occupation where a property is being mortgaged has been termed differently by the various mortgage lenders and equity release providers, and there is inconsistency as to the names used for the document the lenders asks occupiers to sign, which can often cause some confusion. The name of the document your lender or equity release provider wants you to sign will likely be along the lines of:-

The common thread, however, is that a proposed mortgage lender will be asking an adult occupier who will be living at a property they will not own, which will be mortgaged to the lender, to sign a document stating they will vacate the property if the mortgage falls into arrears and the lender wishes to repossess, and if the occupier has acquired any financial interest in the property, that it is acknowledged that the lender must rank in priority in being repaid its mortgage loan.

Mortgage lenders need to be able to prove that an adult occupier signing an Occupier's Waiver Form was aware of the effect of the document they were signing, failing which, the signing of an Occupiers Waiver Form could be deemed ineffective by the Courts.

The Courts have laid down guidance which place mortgage lenders under a duty to make reasonable enquiries as to whether there will be any adults living at a mortgaged property other than the mortgage borrowers. Any such adult occupiers (even family members) will be asked to sign an Occupier's Waiver Form which requires that person to leave the Property if the mortgage lender seeks to repossess.

Most mortgage lenders generally require any adult occupiers who are not on the deeds, and who need to sign an Occupier Waiver Form, to take Independent Legal Advice from a solicitor or other lawyer, so that the nature and effect of the person signing the Occupier's Waiver Form is made clear to them.

Once this Independent Legal Advice has been given, it will usually be inferred that the occupier is aware of the effect of the waiver of their rights of occupation as well as any other rights (such as acquiring a financial interest in the property), and the Courts will then be satisfied that the occupier will then be bound by the terms of the Occupiers Waiver Form.

However, if clear Independent Legal Advice is not given on the occupier's waiver form, the mortgage lender may be left in a position where it is prevented from repossessing a property by a cohabitee of the borrower in the event that the mortgage loan falls into arrears.

Finding a solicitor who offers Independent Legal Advice on an Occupier's Consent Form can prove challenging.

Our extensive experience places us in an excellent position to understand your requirements and your circumstances, and to arrange a cost-effective ILA appointment for your occupier at a convenient time with our panel solicitors via online video conferencing. They will then certify to your mortgage lender that the formalities have been dealt with, thereby enabling you to complete your mortgage.

At ILA-Connect, we work with law firms nationwide who understand and deliver the Independent Legal Advice you need. Simply Book Now or get in touch with us by calling us on 0333 300 1879 or email [email protected] and we'll get straight back to you.

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Occupier's Consent and Postponement Deed | Deed Of Consent And Charge | ILA-Connect

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The requirement for occupiers to waive their rights of occupation where a property is being mortgaged has been termed differently by the various mortgage lenders and equity release providers, and there is inconsistency as to the names used for the document the lenders asks occupiers to sign, which can often cause some confusion.

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Best Independent Legal Advice by ILA-Connect

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Best Independent Legal Advice by ILA-Connect

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ILA-Connect is a best legal advice firm like no other. Specialising in high-value and complex disputes, our track record of success for our clients has helped us become the UK’s leading Independent legal advice firm.

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Following the House of Lords' guidance in the case of Royal Bank of Scotland v Etridge (No 2) and other cases in which a number of borrowers argued successfully that they should not be bound by a loan, guarantee agreement or mortgage because they were not aware of what they were signing up to, it was established that in some circumstances there is a need for a borrower to be advised separately by an independent, qualified legal professional before signing the mortgage or guarantee document.

Ultimately, it's a question of consent. According to one of the guiding principles set out in Royal Bank of Scotland plc v Etridge (No 2), a lender is put on notice of undue influence if there is a 'non-commercial' relationship between the parties borrowing a loan. A presumption of undue influence may arise in the context of a close relationship: a parent and child, or husband and wife, for example. Where one person uses this close relationship with the other to persuade them to do something that will be to the benefit of the first party but potentially to the detriment of the second, this can be classed as a presumption of undue influence.

Simply put, the lender may require a party involved in a transaction to seek independent Legal Advice so as to provide reassurance that they have not been unduly influenced and understand the nature of the proposed mortgage arrangement or guarantee. In doing so, the people signing up to loans, guarantees and other such documents will be less likely to be able to avoid liability by claiming they were not aware of the consequences as their independent legal advisor would have ensured they were fully informed before signing anything.

That's why, when a lender asks for someone to give it a 'personal guarantee', it can often come with the requirement that the proposed guarantor seeks independent legal advice, to ensure that they are aware of the transaction in question and the full extent of their financial liability. When a guarantor or person providing security for a mortgage obtains ILA, a lender receives confirmation that the guarantor freely entered into the guarantee knowing full-well the financial implications, consequences and risks associated with giving the lender a personal guarantee.

From the bank or building society's perspective, the need to protect its interests in the face of potential legal challenges is critical. Written confirmation from a solicitor acting for the borrower, guarantor or mortgagor can act as irrefutable evidence that the solicitor has fully explained their role in the transaction to him/her and the practical implications that come with signing the document. The purpose of the solicitor's written confirmation/certificate of independent legal advice is to satisfy the lender that it has discharged its duty of care to the individual and to prevent the borrower, guarantor or mortgagor from disputing their liability to the loan: without this confirmation, the lender could lose the ability to enforce its security if it was successfully challenged.

Having already put in the hard work to get a mortgage or loan arranged for a client, the need for independent legal advice can, in effect, prevent a borrower from proceeding with the transaction. As such, it's within the lender's best interest to assist their client in obtaining independent legal advice: the problem is, it's not always easy to find a solicitor who will offer this service.

Following the Etridge case, the House of Lords outlined the 'core minimum' requirements for a solicitor when giving independent legal advice. For one, the meeting between the borrower/guarantor/mortgagor and the solicitor must be face to face with no other party present to the meeting. The solicitor must ensure that the language they use can be understood by the individual; it cannot be technical in nature and should not bombard the individual with incomprehensible legal jargon. Further, the solicitor must explain their role in the transaction and make it clear that the lender will rely on the solicitor's involvement to counter any claims in the future of there being undue influence involved or having not fully understood the transaction.

During the meeting, the solicitor must explain the nature of the guarantee, or mortgage/transaction, clarify the meaning of any accompanying documents and explain the practical consequences of signing the guarantee or mortgage and the risks associated. Finally, the solicitor delivering independent legal advice must make it abundantly clear to the guarantor that it is their decision whether to give the guarantee or enter into the mortgage and ensure that he or she is happy to proceed. The solicitor will then give a written confirmation or certificate to the lender, as per the individual lender's requirements.

The requirement for independent legal advice can leave many scratching their heads and searching endlessly for a solicitor who offers this service. Fortunately, we're here to make things easy. We know that the need for independent legal advice can seem like another frustrating hurdle in the process of arranging a mortgage, which is why we've teamed up with expert solicitors across the UK to assist our clients to get the advice they need with minimal fuss. We understand the difficulties in meeting strict time constraints, so we've made the process simple: simply get in touch and give us some details and we'll provide you with a quote for the service you need, which we know from long experience in being involved with independent legal advice is very competitive in the market. We can deliver a convenient appointment for you to attend a firm of solicitors that is local to you.

to choose an appointment or simply Call Us on 0333 300 1879 or Email Us at and we'll get straight back to you!

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Independent Legal Advice Online | Video Call Solicitors | ILA-Connect

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Following the House of Lords' guidance in the case of Royal Bank of Scotland v Etridge (No 2) and other cases in which a number of borrowers argued successfully that they should not be bound by a loan, guarantee agreement or mortgage because they were not aware of what they were signing up to, it was established that in some circumstances there is a need for a borrower to be advised separately by an independent, qualified legal professional before signing the mortgage or guarantee document.