The Notaries and Commissioners Act (the “NCA”) will come into force in Alberta on April 30, 2015. This will result in important changes to the Alberta Guarantees Acknowledgment Act, RSA 2000, c G-11 (the “GAA”) and its regulation (the “GAA Regulation”), which will now require a personal guarantor to meet with a lawyer in order to have a valid and enforceable personal guarantee in Alberta.

Currently, the GAA requires personal guarantors to appear before a notary public to execute a form of certificate prescribed by the GAA Regulation (the “Certificate”). The notary public certifies that the guarantor is aware of the contents of the guarantee and understands it, and completes the Certificate and attaches it to the guarantee. Under the GAA Regulation, a notary public may only charge a maximum of $5.00 for completing this service.

Pursuant to the provisions of the GAA, no guarantee has any effect unless these requirements are strictly complied with. A properly executed Certificate is therefore crucial if the enforceability of the guarantee is to be maintained, which has long been a requirement upheld by the Alberta Courts.

Upon the NCA coming into force on April 30, 2015 a personal guarantor will now have to appear, acknowledge the guarantee, and sign the Certificate before a lawyer only. It may no longer be completed by a notary public. As well, there will no longer be a prescribed cap on the amount that may be charged for completing those services.

The statute defines “lawyer” as an active member of the Law Society of Alberta who has not been suspended and is not an honorary member (for guarantees executed in Alberta). For guarantees executed in jurisdictions other than Alberta, the lawyer must be entitled to practise law in that jurisdiction in order to be eligible to complete the Certificate.

In summary, the changes to the GAA are more procedural than substantive, as the majority of guarantees prior to the amendments in Alberta have been completed by lawyers. For lenders who use a printed form of personal guarantee, it is important to ensure that the form is properly updated, and that all references to notary publics are removed. This will ensure that a valid personal guarantee is being obtained under the revised GAA.

This post is intended to provide general information concerning developments in the law and is not intended to provide legal advice in respect of any particular situation.