Are you considering loaning money to a friend, member of your family or anyone else?
No matter how sure you are that they will pay you back, you should always have a loan agreement drawn up that is signed by all parties. A loan agreement protects both the lender and the borrower and sets out in detail what is being loaned and when the borrower must pay it back as well as how.
A loan agreement is a written contract and ensures that you can rely on it if you have to do the unthinkable and take them to Court. Otherwise, you will have to prove to a Judge that there was an agreement between you, how much the loan was for, whether you were going to receive any interest for the loan, how and when it was to be paid back etc. This is far more difficult without a written agreement.
If possible, you should also ensure that you have some sort of security if they default, which can be in the form of a restriction or a charge against a property that they own and are the registered proprietors of at HM Land Registry.
Prevention is always the safest option and is often much cheaper than failing to put in place documentation that makes enforcing of the contract far simpler.
If you are considering loaning money to anyone or know someone who is then, we at Rowberry Morris can help. Whether it is a personal matter, a family issue or a business challenge, the experienced legal minds here at Rowberry Morris will provide expert advice tailored to your unique needs. And our friendly, approachable lawyers will work with you to resolve matters, efficiently, professionally and cost-effectively.
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Please get in touch if we can assist you with any of the above-mentioned issues.
