The Rural Voice, 1990-10, Page 191
borrowing money is a Corporation, the
bank may request security by way of a
debenture. A debenture can be drawn
to encompass all of the assets and
property of the borrower, including
future property.
• Guarantees - Lenders will allow an
individual or a corporation to accept
liability for present or future debts of
the debtor, if the debtor should default
on his payment obligations. All guar-
antees must be in writing and indepen-
dent legal advice should be obtained
before entering into any form of
guarantees.
• Mortgages - This traditional form of
collateral gives the bank an interest in
the land in return for a cash advance.
A farmer should ensure that interest
rates charged on the principle amount
are reasonable and that payment
periods are proper. If default on the
mortgage occurs, the bank may fore-
close on the property, seize the pro-
perty. and sell it to pay the debt.
DEFAULT
If a farmer - borrower defaults on
his repayment of any loans, the bank
may, subject to the terms of the agree-
ment, seize any security to satisfy the
debt. Default occurs upon non-pay-
ment; inaccurate representations in the
borrowing contract; a change for the
worse in the circumstances of the
farm; bankruptcy; or when the bank
considers that the security is in jeo-
pardy. In view of the serious conse-
quences of default, farmers must
ensure that the lending agreements
which they enter into with their
bankers are appropriate to their needs
and understand their contractual ob-
ligations. Taking the precaution of
obtaining independent legal advice at
the time of borrowing not only assists
the farmer in understanding his
commitments, but may enable him to
limit his exposure in the event of
default.0
Agrilaw is a syndicated column
produced by Cohen, Melnitzer, a full-
service London law firm. Marlene
McGrath, an associate lawyer, spec-
ializes in corporate and commercial
law, wills and estate planning. The
opinions expressed in Agrilaw are not
intended as legal advice. Before
acting on any information in the
column, readers should obtain legal
advice with respect to their own
particular circumstances.
r
"'FARM & INDUSTRIAL BUILDINGS
Designed with the farming industry in mind.
Ideally suited for poultry, hogs, and shop buildings.
Available with Natural Gas or propane 1 .
Mid West Infra -Red Mfg. Ltd.
R.R. Wroxeter, Ont. NOG 2X0
519-335-3583 FAX 335-3580
111111WININ 111191.11.• 411111a
ainge!tK " awl , w.r
giaL
WNW
OEM
71110
anal
MM.
MOWMaar
Mar
alga4 _ . mall uar
lowsw ,1111
�` 1s __
PORK
PRODUCERS
Pre -Galvanized
Flat Top Woven Wire
HOG FLOORING
... ideal for weaner
decks, farrowing decks,
dry sows, finishing
5/16"
$4so
per
square foot
Weight per square foot 5-6 lbs.
Openings: 3/8" wide x 3" long.
3
Gauge
$360
per
square foot
Weight per square foot 4.3 lbs.
Openings: 3/8" wide x 2" long.
5
Gauge
$300
per
square foot
Weight per square foot 3.5 lbs.
Openings: 3/8" wide x 2" long.
• . CALL US FOR ALL YOUR STEEL NEEDS ._
BEAM — FLAT BAR — ANGLE IRON --
PIPE. TUBING (So. OR RD.) — PLATE — ROOF DECKING —
REBAR — CEMENT MESH -- THREADED ROD
LAKEPORT STEEL
GODERICH
519-524-2171
1-800-265-5183
FAX 519-524-2449
HANOVER
519-364-1247
1-800-265-5513
OCTOBER 1990 15