Where a commercial lease agreement so provides clearly and unambiguously, a guarantor can continue to be a guarantor upon the renewal of the lease.
This article discusses a case where a landlord was able to collect on the debt of a commercial tenant who had a guarantor sign the lease on behalf of the tenant. The landlord was awarded judgment in the amount of $324,119.20 plus costs against the tenant and the guarantor because the lease and guaranty were clear and unambiguous.
Landlords may wish to include a guarantor as a party to a lease if there is concern about the payment of rent. If so, care should be taken to ensure the terms of the lease and the provisions binding the guarantor are clear, unambiguous and consistent.
Takeaway:
- Guarantor’s’ obligations can carry over to the renewed commercial lease agreement, if the agreement clearly stipulates their duties and obligations during the original term.