• Individual Guarantors in Alberta: Trap for the Unwary and Extra Cost
  • February 14, 2014 | Authors: Jonathan Fleisher; Monique Sassi
  • Law Firm: Cassels Brock & Blackwell LLP - Toronto Office
  • On December 11, 2013, Alberta Bill 44: Notaries and Commissioners Act, received royal assent. The Bill which will come into force upon proclamation, amends the Alberta Guarantees Acknowledgment Act and in turn, changes Alberta law as it applies to any guarantee with an individual guarantor.

    The Current Law

    Under the current Guarantees Acknowledgment Act, in order for an individual to give a guarantee the person must appear before a public notary. The notary must ensure that the person is aware of the contents of the guarantee and if satisfied, issue a notary certificate in the prescribed form. The individual guarantee is not valid if not accompanied by the certificate. The notary public may charge a maximum of $5 for this service.

    The New Law Under Bill 44

    Under the new bill, the process is fundamentally the same with 3 substantial changes:

    1. A guarantor must now appear and acknowledge before a lawyer instead of a notary that the person executed the guarantee. The lawyer must undertake the same process as the notary to ascertain if the person is aware of the contents of the guarantee and if satisfied issue a certificate

    2. The lawyer must be “independent” in that he/she cannot represent or be employed by a person or corporation who stands to benefit as a result of the guarantee

    3. There is no fee cap on what the lawyer may charge for this service

    What it All Means

    The new bill could mean additional costs and delays for an individual who wishes to become a guarantor.

    Under the new bill, individuals who wish to stand as an guarantor and who do not have counsel, will need to retain an “independent” lawyer for the purpose of obtaining a certificate who cannot be the lawyer for the lender.