What is a Good Guy Guaranty of a New York Lease?

Whether you are just starting your business or are moving to a new location, leasing suitable space is one of the most important decisions you will be making.

In addition to signing a lease, if your business is in the form of a corporation or limited liability company,  you usually will be asked to sign a personal guaranty when you lease space in the name of your company.   Without such a guaranty, a landlord can only look to the assets of your company to satisfy claims which may arise under the terms of your lease.  A personal  guaranty will allow your landlord to  seek to enforce any claims arising under the terms of the lease against your personal assets.

A “Good Guy” clause in a personal guaranty of a lease will limit your personal  liability in the event you surrender the leased premises to the landlord prior to the expiration of the lease term.   In such a case  you would only be personally liable for money due to the landlord up to the surrender date.  While your company would remain liable, you would not be personally liable  for any future rent due your landlord for the remainder of the lease term.  Such liability could be considerable if you seek to surrender the premises early on during a long term lease.

A guaranty with a Good Guy clause will not absolve you of personal liability for any amounts due to the landlord under the lease prior to the date of your surrender of the premises and  requires that you voluntarily deliver the premises to the Landlord.

Needless to say, have your attorney  review your lease and any guaranty you are asked to sign in connection with leasing any commercial space as not all guaranties will contain a Good Guy clause.

About George H. Dippel, Attorney at Law

George H. Dippel has been practicing law for over 30 years. He is a graduate of Cornell Law School and a former partner at the law firm of Rivkin Radler in their real estate/banking department. Mr. Dippel opened his own law offices in 1993 in Bayside, Queens, New York. Mr. Dippel has assisted thousands of clients throughout Queens, Brooklyn, The Bronx, Manhattan, Staten Island, Long Island and Westchester with their wills, probate, trusts, real estate and business matters. In addition to practicing law, Mr. Dippel has taught real estate courses in Long Island University’s paralegal program. He is also a licensed real estate instructor and has taught real estate licensing courses in the New York Metropolitan area. Mr. Dippel is admitted to practice in all New York State Courts and the Federal Eastern and Southern District Courts.
This entry was posted in Business - Buying-Selling-Starting, Real Estate. Bookmark the permalink.

Leave a Reply