Guarantee & indemnity
When the buyer isn’t an individual person — a company, a trust, an SMSF, or where someone is bidding on behalf of another party — the agency usually requires a guarantee and indemnity. This is a standard protection in Australian property transactions.
What is it, in plain terms?
A company or trust can’t physically sign or be pursued the way a person can. The guarantee and indemnity is the individual(s) behind the entity personally promising that the contract will be honoured — and agreeing to cover the vendor if it isn’t. In effect, you’re standing behind the entity’s bid with your own name.
When is it required?
- Company — typically signed by the director(s).
- Trust — typically signed by the trustee(s); if the trustee is itself a company, by that company’s director(s).
- SMSF — signed by the fund’s trustees or the directors of the corporate trustee.
- Bidding on behalf of another party — the authorised representative accepts the authority to bid, while the actual directors or trustees provide any required guarantee. Acting as the representative alone does not make that person a guarantor.
An individual bidding in their own name generally won’t need a separate guarantee — they’re already personally on the contract.
Who has to sign it?
Everyone the entity requires. If a company has two directors, both may need to sign; a trust with multiple trustees needs each trustee. Verabid handles this for you: when you register the entity, anyone else who needs to sign is sent an SMS invitation to verify their identity and add their signature. Your registration only proceeds to the agency’s review once every required party has completed their part.
What it means to sign
Signing a guarantee and indemnity is a serious, legally binding commitment — you may be held personally responsible for the entity’s obligations under the contract of sale. Don’t sign it unless you understand and accept that.
Get advice if you’re unsure
This page is general information, not legal advice. Because a guarantee and indemnity creates personal liability, we strongly recommend getting advice from your solicitor or conveyancer before signing — especially for higher-value purchases or complex entity structures. You can also contact us with questions about the Verabid process itself.