It’s not just a signature! Solicitors Certificates…. what you need to know!
A bank or lender may ask you to obtain a solicitor’s certificate in order to be a guarantor for a loan. A great number of clients that approach our firm believe that these are simple signatures that are to be witnessed by a lawyer. However, it is much more complex than that.
The main intention of a solicitor’s certificate is not to get a lawyer to “sign off” on the documentation, rather, it is for the lawyer to explain and for the guarantor to understand the nature of the documents and the terms they will be bound by when all loan documents are executed. This may take a considerable amount of time due to the nature and length of some loan documents and can take a few hours to thoroughly review.
When approaching a lawyer and requesting a solicitor’s certificate a guarantor must provide the following:
- All loan documents provided by the bank (i.e.: Loan Contract, Mortgage, Guarantee and any other documentation provided); and
- Verification of Identity (VOI).
After the terms and clauses have been thoroughly examined, the lawyer will provide relevant advice in relation to the meaning of the loan documents, including any special clauses that stand out, interest rates or penalties a guarantor will be subject to, the enforcement of the guarantee and what would occur in the instance of a default, as well as other obligations one would be bound by.
If a client’s English is limited and is not their first language, it may possibly compromise their ability to understand the lawyer’s explanation, in these circumstances it is strongly advised that an interpreter is present with them or alternatively, approaching a lawyer who speaks their first language.
A guarantee is not something that should be entered into lightly, rather adequate consideration should be given. A bank may request a solicitor’s certificate for the intention of protecting the guarantor, so they know what they’re signing up for and what they will be bound by. Although, these certificates are costly, they are worth every cent as they allow you to make an informed decision.
Lawyers take careful consideration when providing solicitor’s certificates and will request that the documents are reviewed and the relevant advice is provided before witnessing a signature, as lawyers themselves can be held liable if they simply just sign off on the relevant documentation and fail to comply with the rules of providing the Solicitor’s Certificate of Relevant Legal Advice. Therefore, no solicitor would compromise their qualification or risk proceedings against them to “quickly” witness and “sign off” a solicitor’s certificate. A responsible Lawyer is more than happy to assist if it is in compliance with the law and required rules.
Please note that this article is a summarized guide only and that each circumstance differs. If you need to obtain a solicitor’s certificate and you require our assistance, please feel free to contact our office on (03) 9942 7790 or alternatively, email Nick Karolidis at nick@karolidis.com.au .