Property security and guarantor to Bank.
Sajid
(Querist) 19 December 2010
This query is : Resolved
Sir,
My friend is getting loan from Bank Rs.1 crore. He is pledging his own property and also my friends property.
Now, He wants m as a guarantor to his loan, by giving my property also. It is worth of Rs.20lakhs. He is telling me that I am the guarantor toe to sign the Bank and my liability is limited to what I give the security to the Bank. It is true or not I donot know.
He wants me to sign the Memorandum also to this.
What I want to know that:
1. My liability is limited to my security or beyond that ?
2. Whether I am responsible for the whole amount what he borrowed?
3. What contents should I write in the Memorandum, to be secure from the whole liability of him.
Please guide and give the true advice.
Thanks and regards,
Y V Vishweshwar Rao
(Expert) 19 December 2010
A Third Person Guarantee will for the Total Lon amount unless the bank accepts for limited liability
The Mortgage of the Property will be for the Total Loan amount - not withstanding it value -
The Bank will generally use the Documents forms for the total liability of the Loan amount -
Be Specific, in writing , with Bank before you execute any documents in favour of the Bank on behalf of Your friend !
s.subramanian
(Expert) 19 December 2010
I fully endorse and support the view of Mr.Rao.
