How to avoid arguments over family loans

Have a written agreement

If you’re borrowing or lending money, particularly where family or friends are involved, it always makes sense to formalise your agreement. A properly drafted agreement will protect your rights and help prevent a disagreement or relationship breakdown.

For very straightforward matters, a simple Deed of Acknowledgment of Debt will formalise the obligation to repay a loan.  If required, security for the repayment of the loan can be added, for example in the form of a charge supported by a caveat over the borrower’s real estate.

For anything but the simplest of matters, it is desirable to record the transaction in a comprehensive loan agreement and security documents in the form of a mortgage or caveat over the borrower’s real estate.

We offer fixed prices for these services.

Matters to consider when you are lending money

  • The loan amount (principal)
  • Manner of repayment of the principal
  • Interest charges
  • Payment of interest
  • Consequences of the borrower’s default
  • Security for the borrower’s promises such as a mortgage, charge or guarantee

I am guaranteeing a loan and have been asked to obtain legal advice.

If you’re borrowing money or guaranteeing a loan and need independent legal advice on loan documents prepared by a bank or other lender, we can help.

If you need advice, get in touch.


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