Fri, October 31st, 2008
A Guaranty of a Commercial Lease, is Not Always Guaranteed

Adding to my recent theme of cases we have just settled, is another one involving real property.  This one involves a commercial lease.  My client’s family had a corporation that leased commercial property, and eventually assigned its rights to the unit (an inline unit) to a third party.  That third party took off.  Landlord sued my client over the guaranty of lease payments.  (Originally, my client had guaranteed the lease for his family’s company.)  My client defended on many technical problems with the guaranty in general and with the premise that the guaranty only applied to the former tenant.  Plaintiff, the landlord, disagreed.  The parties settled and moved on.

Moral of this story: whether you are a landlord or a tenant, if there is an assignment of the tenant’s rights, make absolutely sure that the survival of the guaranty is properly drawn so that it reflects the intentions of the parties.  If your a landlord and you are agreeing to an assignment, is the guaranty written in a way that it is clear that the original guarantor is staying on for the new tenant? 

Posted by Nick Yonano at 08:02     0 Comments
Labels: lease, tenant

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