Loan Agreements Guarantees and Security

Loan Agreement Lawyer Sydney: Loans, Guarantees and Security

A loan agreement lawyer in Sydney prepares or reviews the documents that decide who must repay what, when, and what the lender can take if payments stop. Getting the loan deed, guarantee and security right at the start is far cheaper than fighting over them after a default. Invictus Legal acts for both lenders and borrowers on private and business loans across Sydney and NSW.

Reviewed by Sam Saadat, Principal Lawyer, Invictus Legal. Last reviewed: 7 October 2026

What does a loan agreement lawyer in Sydney do?

We draft, review and negotiate loan agreements, loan deeds, guarantees and security documents so the deal reflects what the parties actually agreed and is enforceable if something goes wrong.

Our work covers:

• Private loans between family, friends or associates.

• Business loans to companies, trusts and sole traders, including shareholder loans and vendor finance on the sale of a business.

• Guarantees and indemnities from directors, family members or related companies.

• Security documents over land and personal property.

What security can a lender take for a private or business loan?

The main options are a registered mortgage over land, a charge over land protected by a caveat, a security interest over personal property under the PPSA, and a personal guarantee.

Registered mortgage over land

A mortgage registered on the title under the Real Property Act 1900 (NSW) is the strongest security over real estate. Under s 57 of that Act, a registered mortgage operates as a security and does not transfer the land to the lender, and the lender's enforcement powers are tied to the default notice process described below.

Charge over land and caveats

Many private loan deeds include a charge over the borrower's land instead of a registered mortgage, which may be protected by a caveat. NSW Land Registry Services describes a caveat as a form of statutory injunction recording a claim to an estate or interest in land, and warns that a caveator who lodges without reasonable cause may have to pay compensation. The wording of the charge clause matters: if it is poorly drafted, the lender may have no caveatable interest at all. For contested caveats, see our caveat disputes page.

Security over personal property (PPSA)

Under the Personal Property Securities Act 2009 (Cth), a security interest is an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (s 12(1)). Personal property is property other than land, such as vehicles, equipment, stock and receivables. A security interest is perfected by registration, possession or control (s 21). An unperfected security interest can vest in the grantor on its winding up or bankruptcy (s 267), leaving the lender unsecured, so registration on the Personal Property Securities Register is essential.

Guarantees and indemnities

A guarantee makes a third person, often a director or family member, liable if the borrower does not pay. Lenders frequently require the guarantor to obtain independent legal advice and a solicitor's certificate before the loan settles.

Does the National Credit Code apply to my loan?

The National Credit Code applies only where the borrower is an individual (or strata corporation) and the credit is wholly or predominantly for personal, domestic or household purposes or for residential investment property, among other conditions.

Under s 5(1) of the National Credit Code (Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth)), the Code applies if the debtor is a natural person or strata corporation, the credit is wholly or predominantly for personal, domestic or household purposes or residential investment property, a charge is or may be made for the credit, and the lender provides it in the course of, or incidentally to, a business carried on in this jurisdiction.

Business-purpose loans generally fall outside the Code. Under s 13(2), if the borrower declares before entering the contract that the credit is to be applied wholly or predominantly for a non-Code purpose, it is presumed the Code does not apply unless the contrary is established. However, s 13(3) makes that business purposes declaration ineffective if the lender knew, had reason to believe, or would have known after reasonable inquiries, that the money was in fact for a Code purpose. Inducing a false declaration is an offence (s 13(6)). Where the Code does apply, it imposes additional requirements before a lender can enforce against a defaulting borrower or mortgagor (s 88).

What should I check in the default, interest and penalty clauses?

Check exactly what counts as a default, how much extra interest is charged on default, and whether any default charge could be challenged as a penalty.

• Events of default: late payment, insolvency or breach of other covenants. Borrowers should negotiate grace periods.

• Interest and default interest: the base rate, how it is calculated, and any higher rate that applies after default.

• Penalties doctrine: a charge payable on breach may be unenforceable if it is a penalty. In Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28 the High Court considered whether credit card late payment fees were out of all proportion to the interests damaged, and dismissed the customers' appeals. Default interest and fees should be set by reference to the lender's genuine interests.

How does a lender enforce a mortgage after default in NSW?

A registered mortgagee must generally serve a written default notice under s 57 of the Real Property Act 1900 (NSW) and allow at least one month for the default to be fixed before exercising its powers, including sale.

Under s 57(2) and (3), the notice must state that it is given under s 57(2)(b), require the default to be remedied, and give the mortgagor at least one month after service (or any longer period in the mortgage) to comply. If the default is remedied within that time, it is taken not to have occurred (s 57(4)). Only then may the mortgagee exercise the powers conferred by s 58, which include selling the property. If the loan is regulated by the National Credit Code, further requirements apply. Disputes are heard in the Local Court, District Court or Supreme Court of NSW, and Invictus Legal appears in courts across Sydney and NSW.

Do you act for lenders and borrowers?

Yes. We act for lenders who need enforceable, properly secured documents and for borrowers who need to understand and negotiate what they sign, but never for both sides of the same loan.

What does it cost?

Cost depends on whether we draft or review, the number of parties and guarantors, the type of security, and how much negotiation is needed. Fees for commercial matters are determined by the scope of work involved, and we issue a costs agreement before we commence any work, so you have full transparency from the start.

Frequently asked questions

Is a loan deed better than a loan agreement?

A loan deed is signed as a deed rather than a simple contract, which is why it is commonly used for private loans and for guarantees. The more important questions are whether the document clearly records the amount, interest, repayment dates, defaults and security, and whether the security is properly registered or protected.

Can a private lender lodge a caveat over the borrower's property?

Only if the lender claims an interest in the land, such as under a charge or an agreement to grant a mortgage. NSW Land Registry Services notes that only those claiming an eligible estate or interest in the land can record a caveat, and that a caveator who lodges without reasonable cause may be liable to pay compensation.

Does the National Credit Code apply to a business loan?

Generally no. The Code applies where the borrower is a natural person or strata corporation and the credit is wholly or predominantly for personal, domestic or household purposes or residential investment property. A business purposes declaration creates a presumption that the Code does not apply, but it is ineffective if the lender knew or should have known the money was really for a Code purpose.

How long does a mortgagee have to give before selling in NSW?

Under s 57 of the Real Property Act 1900 (NSW), a registered mortgagee must serve a default notice giving at least one month after service (or any longer period in the mortgage) to remedy the default. If the default is remedied in time, it is taken not to have occurred.

Why should I register my security on the PPSR?

Under the Personal Property Securities Act 2009 (Cth), a security interest over personal property must be perfected, including by registration, possession or control. An unperfected security interest can vest in the borrower if it is wound up or becomes bankrupt, leaving the lender unsecured.

Speak to a loan agreement lawyer in Sydney

Call Invictus Legal on 02 8553 0500, or book online. See all our commercial law services.

This page is general information only and is not legal advice. Contact Invictus Legal to discuss your situation.