A letter of guarantee, or a promissory note or a guarantee agreement, are the same. Section 1 (a) of the Guarantee Act simply defines that “a guarantee is an obligation of a person to fulfill another person’s obligation towards a third person”, in our case the guarantor is obligated towards the landlord, to fulfill the tenant’s obligations.
A letter of guarantee is a contract in which the guarantors undertake to pay the owner money, in case the tenants do not do so. However, according to the definition in section 1 of the Guarantee Law, a written bond can contain non-financial charges, such as a commitment to water a garden, care for animals, and more.
But in the vast majority of guaranties, it is a monetary payment.