Guarantee as Security for Real Estate Development Loans in Algerian Law: What Effectiveness

Abstract

Banks that extend real estate development loans typically require the involvement of a guarantor, necessitating the execution of a guarantee contract between the guarantor and the lending institution. This contract is traditionally governed by the general rules of law, which may not adequately cater to the unique needs of real estate development loan agreements.

With this in mind, the French legislator introduced some amendments to the provisions of the bank guarantee contract by amending the French Civil Code in 2021, by Order No. 2021-1192, issued on 15 September 2021.

 Consequently, it is imperative for the Algerian legislature to reevaluate and tailor the provisions of guarantee contracts within the banking sector specifically for real estate development loans to better address these unique requirements.