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  • Writer's pictureHelen Chorley


Can we talk risky language? 👀😯

I know what I made that sound like, I’ll keep it strictly PG today 😂

Wait, did I say PG?? Well, exactly.

The ‘Personal Guarantee’ aka PG.

One of the things so many investors trip up on is the VAGUE, NOT ALWAYS BINDING and THEREFORE NON RISK-MITIGATING language which is sometimes used by those raising capital for their property projects.

Unfortunately a PG does not GUARANTEE you against loss…although it does sound reassuring 😂😂😂

👉 It doesn’t save you from losing money (the project would need to be asset-backed to be in with a chance of doing that, accompanied by tight terms)

👉 You may not be first in line to be repaid #checkterms #SHA

👉 For it to work it would have to legally bind the developer’s personal assets into the deal. Personal assets however could include things under co-ownership and therefore not 100% in their control or carrying their own risk issues 😅

PGs are more like a statement of positive intention to care about your capital.

Which I’m not against 🙏

But let’s not present it as more than that.

💥 Ask more questions, don’t stop until you’re satisfied, and check, check, check those KEYWORDS and terms in the shareholders' agreement.

I’m going to look at this more in my March #propertyinvestornews article later this month so stay tuned!

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