Legal Question in Real Estate Law in California
I hold a note and deed of trust with marginal owner equity. The borrower is willing to sign a personal note to guarantee payment in full, regardless of the sale price, in the event of his death. Will a Guaranty form suffice in this case?
Asked on 5/22/12, 7:26 am
1 Answer from Attorneys
Anthony Roach
Law Office of Anthony A. Roach
No. The borrower would not be what is known as a "true guarantor." A true guarantor is a third party with no interest in the property, who agrees to pay in the event of the default of the borrower. Courts do not enforce guarantees signed by borrowers because they violate California's public policy and statutory scheme of anti-deficiency and the one action rule.
Answered on 6/03/12, 11:13 pm
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