If someone has the commercial acumen required to make a business venture succeed, then they should be smart enough to know that there are some things you should not pledge. One of those is their parent’s home!
Therefore, we are of the opinion, that loans to “entrepreneurs” secured by their parents’ home are by definition improvident and advise our lender clients not to do them. In the highly likely event they go into default the lender will be exposed to losing capital pursuant to the Contracts Review Act:
Fast Fix Loans Pty Ltd v Samardzic [2011] NSWCA 260
or equivalent equitable principles:
