A friend of mine is going through some financial difficulties and asked me to lend him R80 000. I want to help him out but, I am worried that I won’t ever see my money again. What can I do to protect myself and make sure I see my money again?
We all know that lending money to friends and family is a rather sensitive issue – especially when friends and family members take advantage of your generosity. They either don’t pay you back at all or take years to settle their debt making any meeting with them awkward.
All hope however is not lost. You can still lend money and be the Good Samaritan while securing the loan made with a notarial bond.
A notarial bond is a document registered at the Deeds Office which hypothecates movable property (all movable property or specified movable property) to secure an obligation on the part of the debtor (the borrower) towards a creditor (the lender).
More simply put, it is a specific document that is drafted by a notary public setting out, amongst other things, who owes money, the reason for owing money, how much they owe, who it was borrowed from and what movable property they have given as security for their debt.
If the debtor doesn’t pay, a notarial bond allows the creditor to sell the mortgaged property and use the proceeds of such sale to cover his/her claim.
There are different types of notarial bonds to secure different types of debt, for example, existing debt, future debt and certain circumstances where you may have bound yourself as surety on behalf of another.
This is just a tip of the iceberg on the topic which is often a misunderstood area of the law. It is essential that you make an appointment to see a Notary Public to explain your options to you in detail. It is important that you get the right notarial bond for your circumstances.
To make an appointment or for more information please contact Robyn Pentz at Southey Attorneys Inc. on 034 315 1241 / email@example.com