With the new reforms that can be observed today, it is easy to see that several areas of life have undergone a major advance. The real estate sector is undoubtedly the one that has attracted the most interest in recent years. When entering into a rental agreement, there are several points to consider.
Nevertheless, it has become quite difficult to decide on the elements that must be attached to such an act, such as the bonding contract. So, without further ado, let’s dive into this blog and learn some of the things you ought to know about lease contracts.
Bonding contract: everything you need to know
Among the many aspects that come into play in terms of renting, this contract appears most often. What is it about?
Definition of a bond
It is simply an act by which a person (the guarantor) commits to the beneficiary of the guarantee to satisfy an obligation in the event that the guaranteed person (the debtor) is unable to honor his commitments. In other words, it is a personal guarantee. It is what makes it possible to guarantee the execution of a debt or any obligation by a third person when the debtor himself (co-contractor) cannot do it.
What is a surety bond contract?
Before looking at the obligatory nature of this type of act, it is essential to be aware of its various characteristics. First, it is important to specify that this type of act is contractual. In other words, as the name indicates, it is a contract between two parties. However, some people find it difficult to identify the contracting parties. Contrary to what most people think, this type of ace is an agreement between the creditor and the surety. This means that the debtor or the person being guaranteed does not take part in this agreement.
Apart from this basic principle, it is also important to specify that the deed of guarantee is a unilateral agreement. This means that only one party obliges himself to perform an obligation. It is true that the creditor has an obligation to inform the guarantor, but in this case, the fundamental obligation is that of paying the debtor’s debt. Finally, the surety contract is characterized by an accessory character. This means that the guarantor pays the principal debt of the debtor and not his own debt.
What are the advantages of a contract of suretyship?
Before better understanding the importance of such a contract, it is necessary to know its different advantages. One of the first interests of this act lies in the right to sue. This is much more of an effect generated by the surety agreement. In other words, the creditor has the right to take legal action against a third party in the event of non-payment of the principal debt.
Moreover, you should know that this type of act is of capital importance for the creditor. Indeed, it allows him to have not one but two debtors at his disposal (the principal and the accessory, which is the surety).
Guarantee contract: is it mandatory or not?
Although this type of document has its share of advantages, it should be noted that it is not at all mandatory when signing a rental agreement. Some documents, such as the inventory of the premises or the co-ownership rules, are, but the deposit document is not.
However, despite the non-mandatory character of this contract, it is important to specify that it is nevertheless advised to join it when signing the lease contract. Taking into account the advantages it offers, it is easy to say that this contract is quite practical. In addition, it provides transparency to the creditor.
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