We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co

Guarantors on a Retail Lease

TripleDrawTripleDraw subscriber Posts: 1
edited August 2008 in Business Planning
I am attempting to get a lease signed as the tenant but have come accross a slight hurdle.  There is a component to the guarantee section that forces the guarantor to be liable for the life of the lease, which basically will continue to exist once I sell the business, sublease or turn the space over to a different business.  Some have said this is standard and I`ll need to negotiate this point with the new tenant.  However my attorney said this is a bad idea and needed it removed.  I would greatly appreaciate any comments on this topic.  Thanks. TripleDraw2008-8-6 12:41:36


  • pepperlegalpepperlegal subscriber Posts: 2 Member
    Obviously, if you can get this removed you should, although it is a relatively common provision in commercial leases, especially if the tenant represents a new business or does not have established credit.
    If you can`t get it removed, I typically attempt to narrow the guarantee to no more than a year or two from lease inception, with the argument that if the rent has been paid on time during that time, a guarantor is no longer necessary.  I do agree with your attorney that having the guarantor remain liable even after an assignment to a third party is unreasonable.pepperlegal8/7/2008 11:17 AM
  • posylaneposylane subscriber Posts: 1
    You definitly don`t want to be liable for the life of the lease if your plan is to exit the business scene.  You don`t know what will happen once you are out of the picture.
Sign In or Register to comment.