17 October 2014
A guarantor or mortgagor may legally waive their rights in favour of a creditor or assume liability for a debtor's obligations. In practice, however, creditors may not enforce the mortgage or demand performance of the debtor's obligations from the guarantor as soon as they are entitled to do so. The later the enforcement or demand is made by a creditor, the more interest and charges will accrue on the secured obligation, putting the other parties at a disadvantage.
In order to rectify this situation which is seen as unfair to guarantors, mortgagors and debtors, the National Council for Peace and Order (the "NCPO") proposed a draft Civil and Commercial Code Amendment Act (the "Amendment Act"), for the consideration of the National Legislative Assembly (the "NLA"). On 2 October 2014, the NLA approved the draft Amendment Act.