Notes, Security Agreements, and Guaranty Agreements

What are Notes, Security Agreements, and Guaranty Agreements?

A written promise to pay money is referred to as a note.  A note is a contract.  A note may be secured by specific collateral, or a note may unsecured.  And a note may also be guaranteed by a third party.  Some notes may be simple, and some notes may be very complex.  The debts or loans behind notes may be between family members, or they may arise out of business transactions.  Whether or not collateral is required by a creditor to secure the note is a function of the relationship (or lack thereof) between the lender and the borrower, and the amount of the loan.  And whether or not a guaranty of the note is required by a creditor is a function of the relationship (or lack thereof) between the lender and the borrower, and the amount of the loan.

What is a Deed of Trust?

If the collateral which secures the note is land and buildings and equipment which are attached to the land, the security document in Texas is known as a deed of trust.  If the collateral which secures the note is not land, nor buildings or equipment which are attached to land, the security document is known as a security agreement.  The two types of collateral are very different, and the perfection of the security interest against the collateral is also very different, and varies by the specific type of collateral.

I assist clients in drafting notes, security agreements, deeds of trust, and guaranty agreements, and I also assist clients in reviewing, interpreting, and negotiating notes, security agreements, deeds of trust, and guaranty agreements.