Guide
Personal Guarantees on a Commercial Lease
A commercial lease is signed by your company, and the landlord knows the company may not survive the term. So the landlord asks you to guarantee the rent personally. An unlimited guarantee puts your home and savings behind every month of a ten-year lease; a well-negotiated one limits what you risk and when it ends.
Ask a Commercial Specialist · (786) 914-1017
Why Landlords Ask
A new business, a single-location operator or a company with thin financials cannot show the landlord that the rent will be paid for the term. The guarantee is the landlord's security beyond the deposit. Established tenants with audited financials often avoid it; new ones rarely do.
Kinds of Guarantee
A full guarantee covers all rent and costs for the whole term. A capped guarantee limits the amount, often to six or twelve months of rent. A rolling or burn-off guarantee shrinks or ends after a set number of years of on-time payment. A good-guy guarantee covers rent only until the tenant vacates and returns the space in good condition, which protects the landlord against a tenant who stays without paying and the guarantor against years of future rent.
What to Negotiate
A cap in months of rent; a burn-off after two or three years of clean payment; a good-guy structure where the landlord will accept one; a larger security deposit or a letter of credit in place of a guarantee; and a release when the lease is assigned to a qualified buyer, which matters if you ever sell the business. A tenant representative negotiates the business terms; a Florida attorney drafts the guarantee.
For Landlords
A guarantee from a creditworthy owner is worth more than a larger deposit from a weak one, but an unlimited guarantee from someone with nothing behind it is paper. Ask for a personal financial statement, size the guarantee to the real exposure (the build-out, the free rent, a few months of rent) and accept a burn-off for a tenant who performs.
Ask a Commercial Specialist
Call or text (786) 914-1017 or email sales@breakthrurealty.com. A licensed BreakThru Realty agent follows up within one business day.
Frequently Asked Questions
- Can I refuse a personal guarantee?
- You can negotiate. A landlord with other tenants in line may insist; one with an empty space may accept a cap, a burn-off or a larger deposit instead. The strength of the business's financials decides.
- Does the guarantee end when I sell the business?
- Not unless the lease or the assignment says so. Negotiate a release on assignment to a qualified buyer when you sign, or you may still be guaranteeing someone else's rent years later.
- What does a good-guy guarantee cover?
- Rent through the date the tenant leaves and returns the space in good condition, not the rest of the term. The landlord gets the space back promptly; the guarantor avoids open-ended liability.
Commercial Services
Calculators
Commercial Guides
- Gross, Modified Gross and Triple-Net Leases
- CAM Charges Explained
- Tenant Improvement Allowance
- From Letter of Intent to Lease
- Zoning and the Certificate of Use
- Phase I Environmental Site Assessment
- SBA 504 Loans for Owner-Users
- Opportunity Zones in Florida
- The Live Local Act for Owners
- Commercial Closing Costs in Florida
- Commercial Property Tax in Florida
- Lease or Buy Your Business's Space?
- How Commercial Property Is Valued