Björn Vrooman Feb 7:

@Marion I'm a bit confused now: The link you posted says "draw on" (as does my first post).

As mentioned in my since-deleted peer comment (removed because I wasn't as sure as last time about what would be the best fit here), a bank guarantee is often called on when someone fails to meet their contractual obligations (see Allegro's 2nd link, though the situation may be a bit different in the UK or AUS). I don't see what that has to do with the question as asked, unless there's vital context missing.

Also:
"U.S banks generally do not issue bank guarantees, but issue other types of promissory notes that are intended to fulfill the same function. Instead of bank guarantees, U.S banks issue standby letters of credit (SLOC), which are heavily used in international trade."
https://www.investopedia.com/ask/answers/10/us-banks-authori...

I don't mind being proven wrong and I'd be very interested in the outcome of this Q, but I assume Mary needs something else, considering she lives in the US.

Best

Marion Linssen Feb 7:

Look also here: https://www.proz.com/kudoz/german-to-english/law-contracts/6...

Björn Vrooman Feb 7:

I'll... ...post these two links here if someone's interested, as they describe the process of buying property in Austria...
https://www.infina.at/ratgeber/treuhandschaft/#c26034

...and, possibly, in the US (at least parts of it):
https://www.investopedia.com/terms/t/trustdeed.asp

Just be aware that even an Austrian "Bankgarantie" is no longer what it used to be:
"Zum anderen sind Bankgarantien seit der Krise praktisch schwer zu bekommen. Die Banken sind häufig nur dann bereit, eine Garantie abzugeben, wenn der garantierte Betrag in voller Höhe in Cash besichert wird. Der Hauptvorteil der fehlenden Kapitalbindung besteht also in der Regel praktisch nicht mehr."
https://www.derstandard.at/story/1242316234286/wirtschaftskr...

This looks more like a cash bond for property held in trust, so maybe someone else can help untangle this.

Thank you all for your patience.

Best

Björn Vrooman Feb 6:

PS After reading Allegro's Australian reference, I'm wondering whether there is some kind of UK-US divide here. Another US reference:
https://www.straffordpub.com/products/letters-of-credit-in-r...

Best wishes

Björn Vrooman Feb 6:

LOC "To completely understand the implications of the Western Security Bank decision, it is helpful to first explore the manner in which letters of credit are currently used in financing real estate transactions. In such a transaction, a letter of credit is typically used as a readily accessible source of payment of a portion of the debt in addition to the security of the real property underlying a deed of trust. The basic letter of credit relationship involves three different parties and three contractual relationships. The three parties are referred to as the customer or borrower (the party obligated to reimburse the issuer if the letter of credit is drawn upon), the beneficiary or lender (the party with the right to draw on the letter of credit), and the issuer (typically a bank who issues the letter of credit)."
https://digital.sandiego.edu/cgi/viewcontent.cgi?article=118...

Cf. https://law.ch/lawinfo/bankgarantie/erscheinungsformen-nach-...