Commercial Real Estate Insight of the Week – Week 7

A personal guarantee can extend responsibility for a commercial lease beyond the tenant’s business entity and directly to the individual signing it. Before agreeing to one, business owners should carefully review the scope, duration, liability cap, release conditions, and whether the guarantee continues through lease renewals or assignments.

Depending on the terms, a guarantee may be limited to a specific dollar amount, decrease over time, or end once certain conditions are satisfied. These provisions should be negotiated as part of the overall lease economics—including rent, lease term, security deposit, improvement costs, and exit options.

Godino Tip: Understand exactly when and how the guarantee ends before signing.

For assistance with your commercial real estate needs, contact Godino & Company or visit GodinoCo.com.