May 05, 2010

Guarantees, Guarantors in Leases: Making Sure You Get Paid

In more settled times, landlords primarily looked for additional security from tenants that were newer entities or had smaller balance sheets. Given the large number of FED actions and bankruptcy filings, however, the paradigm has shifted. Now, absent a large balance sheet and strong, lengthy history, prudent landlords are requiring most tenants to provide additional security for lease obligations. Such security may include a personal guaranty from a principal of the tenant or a guaranty from the tenant's parent.

For landlords, understanding how these agreements work and using them properly can help ensure they get paid in the event a tenant defaults. Read more...


Reprinted with permission from Colorado Real Estate Journal.

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