You may need to sign a personal guarantee when applying for a loan for your business, education, car, or other purposes. This type of agreement holds the individual personally liable for the loan as a protection measure. Alberta's Guarantees Acknowledgement Act, or GAA, is a piece of legislation designed to protect guarantors. When getting a personal guarantee in Alberta, you must get informed about the GAA. Every personal guarantee must go through the GAA process to be considered valid. In this article, you'll learn everything you need to know about the Guarantees Acknowledgement Act.

What Is the Guarantees Acknowledgement Act?

First, you'll need to know what Alberta's Guarantees Acknowledgement Act is and how it affects you. The Guarantees Acknowledgement Act ensures a guarantor is fully aware of the legal consequences of signing a personal guarantee.

When a personal guarantee gets implemented, the guarantor loses protection and is now under a legal obligation that could come with consequences. As such, the lawyer signing the acknowledgement certificate must be sure that the guarantor understands the contents and potential implications of the guarantee.

Notary Services from a Lawyer

The Guarantees Acknowledgement Act requires that a lawyer sign the personal guarantee acknowledgement certificate. Because of this, you'll need notary services from a qualified lawyer–a notary public is insufficient under the GAA. Without a lawyer's signature on the acknowledgement certificate, the personal guarantee will not go into effect.

Previously, a guarantor had to appear in person before a lawyer to have an enforceable guarantee. However, in 2020 an amendment was made to the GAA due to the COVID-19 pandemic. This amendment allows two-way video conferencing to sign personal guarantees, so you do not need to meet with a lawyer in-person.

How Does the GAA Process Work?

When you arrive at the appointment with your lawyer to sign off on the personal guarantee, there are a few pieces of documentation you'll need to bring. You'll need to bring at least two pieces of government I.D. with photo identification, the loan agreement you plan to guarantee, and the personal guarantee document itself. Ensure to bring the original documents and not copies.

From there, the process is simple. Your lawyer will ensure that you understand the contents of the guarantee. If so, they will issue you a Guarantees Acknowledgement Act Certificate (GAA certificate). This certificate must get signed by both the lawyer and the guarantor.

What Situations Does the GAA Apply To?

There are several instances where personal guarantees are necessary in Alberta. These instances vary but can include the following:

• Business loans
• Car loans
• Student loans
• Unsecured lines of credit
• Rental/lease agreements

What Else Do You Need to Know About Personal Guarantees?

It's important to note that obligations under a personal guarantee will vary depending on the situation. The type of agreement and terms of the agreement, as well as the type of liability, will affect the obligations of the guarantor.

There are two types of liability: limited and unlimited. Unlimited personal guarantees don't have caps. If you default on the loan, the lender has the right to seize your personal assets to settle the loan, which can be risky for guarantors. On the other hand, limited liability places a cap on the amount the borrower is allowed to recoup, meaning they can only seek a certain percentage or dollar amount of the loan.

Notary Services in Calgary

In need of a notary in Calgary? MerGen Law offers a variety of notary services. Our lawyers can notarize virtually every document, including personal guarantee documentation. Alongside our GAA services, we can notarize affidavits, passports, statutory declarations, permanent resident card applications, and more. Contact us today for a notary public in Calgary and to book your appointment.