# Independent legal advice for guarantors & borrowers

> Nash Allen Williams & Wotton - Central Coast NSW solicitors since 1957. Offices at Tuggerah (02 4332 3588) and Budgewoi (02 4399 2800). Canonical page: https://nawwlaw.com.au/legal-services/independent-legal-advice/

**Jurisdiction:** New South Wales, Australia | **Last updated:** 2026-07-30 | **Source:** Nash Allen Williams & Wotton, https://nawwlaw.com.au/legal-services/independent-legal-advice/

If a lender has told you to get independent legal advice before you sign, this is the page. We do not act for your lender, your broker, or the family member who benefits from the transaction. We read the documents, explain what you are actually agreeing to, and give you that advice on your own. Most often it is parents going guarantor on a child’s mortgage, or someone considering a reverse mortgage against their own home. Banks usually call this getting a solicitor’s certificate, and in New South Wales it works differently from how that sounds - which is the first thing explained below.

## Key facts

- In New South Wales the evidence the lender ends up holding is normally a written confirmation signed by YOU, on a prescribed form, saying you received independent legal advice. The Law Society of NSW states that Practice Rule 11 prohibits a solicitor from providing evidence of their independent legal advice to third parties in relation to loans and guarantees.
- Independent means the solicitor advising you does not act for the lender, the broker, the borrower, or the family member who benefits - which is why a lender will generally not accept a certificate signed by the firm acting for the borrower.
- The two situations that most often bring people to us are going guarantor on a family member’s mortgage or business loan, and taking out a reverse mortgage or other equity release against your own home.
- The requirement to get advice usually comes from the lender rather than from the law, and lenders differ in what they ask for. ASIC’s MoneySmart separately advises speaking to a financial adviser or legal professional before entering a reverse mortgage.
- This is legal advice, not financial advice. We explain what the document does and what it puts at risk. We do not give financial product advice and we do not advise on whether the loan is a good deal.

## The bank asked for a solicitor’s certificate. What that means in NSW

Almost everyone arrives having been told to go and get a solicitor’s certificate, so it is worth explaining what actually happens, because it is not quite what the phrase suggests. In New South Wales the paperwork the lender ends up holding is normally a written confirmation signed by you, on a prescribed form, saying that you received independent legal advice. The Law Society of NSW states that Practice Rule 11 prohibits a solicitor from providing evidence of their independent legal advice to third parties in relation to loans and guarantees, and that clients may instead provide that written confirmation themselves using prescribed forms. Lenders want the paperwork because it makes the transaction harder to unwind later: if it were ever said that you did not understand the guarantee or the mortgage, that form is the record saying otherwise. Note who it protects. The paperwork exists for the lender’s benefit; the advice exists for yours. They happen in the same appointment, but only one of them is the reason you are there. Which form your lender wants, and what it will accept, varies - send us the pack and we will tell you where you stand before you commit to anything.

## What "independent" actually means

Independent means the solicitor advising you does not act for the lender, the broker, the borrower, or the family member who benefits from the transaction. In practice a lender will generally not accept advice given by the firm acting for the borrower, and a solicitor acting for the lender in the same transaction is not independent of it either. It also means the conversation happens with you on your own, rather than across the table from the person asking you to sign. Some people find that part uncomfortable, particularly when it is a son or a daughter waiting outside. It is the point of the exercise. It is the only setting in which you can ask the question you actually want to ask.

## Going guarantor on your child’s mortgage

This is the most common reason people come to us for independent advice, and it is almost always the parents of a first home buyer. The arrangement is usually that the lender will consider the loan if you provide a guarantee secured against your home, which can mean your daughter needs a smaller deposit and, depending on the lender and the loan, may avoid lenders mortgage insurance. Whether it does turns on that lender’s policy. Everybody involved is well intentioned and nobody expects it to go wrong. What a guarantee does, though, is put your home behind somebody else’s loan. If the borrower defaults and you cannot pay what you guaranteed, the lender may be able to look to the security you gave, which can mean selling the asset you put up. Exactly when and how depends on the guarantee you signed, which is one of the things we read. So the terms matter enormously: whether the guarantee is limited to a fixed amount or open-ended, whether it covers only this loan or any future lending to the same borrower, what has to happen before the lender can come to you, and how and when the guarantee can be released. Those are the terms we read. We also ask the questions the loan documents do not: what happens if your daughter separates from her partner, what happens if you need to sell or downsize while the guarantee is on foot, whether you could actually pay the guaranteed amount if you had to, and what all of this does to your will and to your other children. Whether to go guarantor is your decision, and plenty of families make it. Our part is making sure it is made with the terms in front of you, rather than one whose shape you discover later.

**Questions to answer before you sign a guarantee**

| The question | Why it matters |
| --- | --- |
| Is the guarantee limited or unlimited? | A limited guarantee states a maximum. Check whether that maximum also covers interest, fees and enforcement costs - a cap on the principal alone is not a cap on what you may end up owing. |
| Does it extend to future lending? | Some guarantees cover further loans the lender later makes to the same borrower, without coming back to you. |
| What have you given as security? | If your home is the security, the lender can look to it if the loan is not repaid. |
| Must the lender pursue the borrower first? | Not always. Some guarantees let the lender come to the guarantor without first exhausting the borrower. |
| How does the guarantee end? | Guarantees do not usually lapse on their own. There is normally a release process, often tied to the loan balance or the property value. |
| Could you actually pay it? | If the answer is no, that is a reason to renegotiate the amount, not a reason to hope. |

## Reverse mortgages and equity release

A reverse mortgage lets you borrow against the home you live in without making repayments, with the debt and the interest compounding until the loan is repaid - usually when you sell, move out, or the estate sells the home. Reverse mortgages taken out from 18 September 2012 carry negative equity protection, which means you cannot end up owing the lender more than the home is worth. That protection is a meaningful one, but it is not the same thing as the loan being small, and it says nothing about what will be left for your family. The legal questions, as distinct from the lending ones, are these. Whether the person living with you, a partner, a sibling, an adult child, has any right to stay in the home afterwards. What the loan does to your Age Pension. What your will currently says, and whether it still does what you think it does once a growing debt sits against the house. How it compares with the Home Equity Access Scheme, a government loan for eligible older Australians provided by Services Australia and the Department of Veterans’ Affairs, is a question for a licensed financial adviser rather than for us - but it is worth asking before you commit. Those are legal questions rather than lending questions, and they are the ones families are most often surprised by.

## What the appointment involves

You send us the documents in advance, including whatever form the lender wants completed. We read them before you arrive, so the time goes on your questions rather than on us turning pages. In the appointment we go through what the document does, what it exposes you to, what has to happen before the lender can enforce it, and how it comes to an end. You are seen on your own. If you then want to proceed, we go through the lender’s paperwork with you so it is completed properly. The appointment can be held at either office, or by telephone or video link where the lender’s own documents allow it - some lenders still require a guarantor to attend in person and be identified face to face, so check their requirements before you make the trip. One practical thing, and it is the single most useful sentence on this page: ask the lender for the full documents as early as you can. Being handed a guarantee at settlement is the worst version of this, and it is avoidable.

## Legal advice, not financial advice

We advise on the document: what it says, what it obliges you to do, what it puts at risk, and what your options are. We do not give financial product advice. We will not tell you whether the interest rate is competitive, whether this loan suits your circumstances, or whether a different product would serve you better. That is the work of a licensed financial adviser and it is a separate conversation worth having. Where the live question is the effect on a pension or benefit, Services Australia’s Financial Information Service is the usual place to start.

## We will tell you not to sign, if that is our view

This is not a formality we process on request. If, having read the documents and talked with you, we think you should not sign, we will say so plainly and give you our reasons, and we will not pretend to have given advice we did not give. That is uncomfortable when a family member is waiting on a settlement date. It is also the only reason the advice is worth getting. You remain free to proceed anyway, and people sometimes do - it is your decision, not ours, and you can always take advice elsewhere. But you would be deciding while knowing exactly what you were taking on, which is a very different position from finding out afterwards.

## How we can help

- Independent legal advice before signing a guarantee or mortgage, with the lender’s prescribed form completed properly
- Guarantor advice for parents supporting a first home buyer
- Guarantees and directors’ guarantees for business and equipment finance
- Independent advice before a reverse mortgage or equity release
- Advice for a co-owner or occupant asked to consent to a mortgage
- How a guarantee or reverse mortgage affects your will and your estate
- Reviewing an existing guarantee or reverse mortgage for a family or an executor
- Appointments at Tuggerah or Budgewoi, or by telephone or video link

## Common questions

### What is a solicitor’s certificate, and do I get one in NSW?

It is the paperwork a lender wants as evidence that you took independent legal advice before signing a guarantee or mortgage. In New South Wales it usually does not take the form of a certificate signed by the solicitor. The Law Society of NSW states that Practice Rule 11 prohibits a solicitor from providing evidence of their independent legal advice to third parties in relation to loans and guarantees, and that clients may instead provide written confirmation themselves using prescribed forms. So in practice you sign a prescribed form confirming you received the advice, and the lender holds that. Either way the thing that matters is that the advice actually happened - the form is the record of it, not a substitute for it.

### Is independent legal advice a legal requirement?

In most cases the requirement comes from the lender rather than from the law. Lenders commonly will not settle until they hold the completed form showing you took advice from a solicitor who acts neither for them nor for the borrower. Separately, ASIC’s MoneySmart advises speaking to a financial adviser or legal professional before entering a reverse mortgage, and its guarantor guidance says you can speak to a lawyer or get free legal advice before you sign so that you understand the contract. Whether it is a condition in your case depends on your lender and on the documents you have been asked to sign, which we can tell you once we see them.

### Do I need independent legal advice to go guarantor on my child’s mortgage?

Your lender will usually require it. If your home is being used as security for your child’s loan, lenders commonly insist you take advice from a solicitor who acts neither for them nor for your child, and want the completed form before settlement. Beyond the lender’s requirement, it is the one opportunity you get to read the guarantee on your own and find out whether it is limited to a set amount, whether it extends to future lending, and how it can be released. Those terms vary between lenders and they are not obvious from a summary sheet.

### Can I use my own solicitor, or the same solicitor as the borrower?

Your own solicitor is fine, provided that firm does not also act for the lender or for the borrower in the same transaction. The same solicitor cannot advise both the borrower and the guarantor, because the whole value of the advice is that it is given to you alone and in your interests. A lender will generally not accept advice given by the firm acting for the borrower.

### Can I get independent legal advice over the phone or by video?

Often, yes. Independent legal advice does not require you to be in the same room, and many of these appointments are held by telephone or video link. What decides it is the lender’s own documents: some lenders still require a guarantor to attend in person and be identified face to face. Check the lender’s requirements before you book, and send the documents through either way so they are read before we speak.

### What happens if the solicitor advises me not to sign?

You get the reasons, in writing if you want them, and then it is your decision. We will not pretend to have advised something we did not, and we will not help paper over a document we think you should not sign. That does not stop you: you can proceed anyway, or take advice from another solicitor. Often the more useful outcome is narrower than yes or no - one term needs to change, and terms can sometimes be renegotiated once somebody has actually read them.

### Do I need independent legal advice before a reverse mortgage?

ASIC’s MoneySmart advises speaking to a financial adviser or legal professional before entering one, and many lenders will additionally require a solicitor’s certificate before they proceed. Either way the advice is the same: have someone who is not being paid by the lender read it first. The legal questions are what the loan does to your will and your estate, whether anyone else living in the home has a right to stay there, and what happens on the day you die, sell, or move into aged care.

### What happens to a reverse mortgage when I die?

The debt does not disappear; it is repaid out of the estate, usually by selling the home. That is why the loan and the will need to be looked at together, and why it matters a great deal whether anyone else is living in the house. We can review both at the same appointment.

## Sources

- [Law Society of NSW - Ethics FAQs (Practice Rule 11, evidence of independent legal advice)](https://www.lawsociety.com.au/practising-law-in-nsw/ethics-and-compliance/ethics/FAQs)
- [ASIC MoneySmart - Going guarantor on a loan](https://moneysmart.gov.au/loans/going-guarantor-on-a-loan)
- [ASIC MoneySmart - Reverse mortgage and home equity release](https://moneysmart.gov.au/retirement-income/reverse-mortgage-and-home-equity-release)

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This is general information, not legal advice. Initial consultation: there is NO consultation fee for wills, conveyancing, powers of attorney and enduring guardianship, deceased estate administration or contested estates. For other matters (criminal, family law, litigation and general enquiries) an initial consultation is $275. Enquiring is always free. Request a consultation via the enquiry form at https://nawwlaw.com.au/contact/ or phone (02) 4332 3588. Enquiries receive a reply within one business day; a conflict check is run before any engagement.