Lawyer! Help. Business Lawyer! sorry Non Sports issue

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DDz00

DDz00

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I am about to sign 10 Year lease.
I have a question before i sign.

"Tenant will personally guarantee the lease." <-- what is that mean?

I know I will and I WILL pay the rent as long as I occupy there.

But What If I sell my business next two years, then my name has to be under the lease again with new buyers?

I do not want to be a part of responsible after I sell my business to someone.

Please help me !!!
 

daringly

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If he is asking you to PERSONALLY sign it (instead of your business corporation), it means you are personally liable for damages if the lease is broken.

So if you move out in two years (or sell your business and it moves out), you agree to pay for the landlord's damages. If it takes him 8 months + $2000 in expenses to find a new tenant, you're out 8 more months of rent + 2k in expenses.

If you do sell the business, the new owner agrees to abide by the lease before the sale, and then moves out, the landlord can still sue you. If he does, you can sue the new business owner.

The best thing you can do in this case is tell the landlord your concerns. He might be willing to allow a "transfer of liability" to a new tenant if you sell the business.
 

sean1

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Basically, the landlord is asking you to guarantee the lease with your credit instead of your business's credit. Depending on how established your business is, you may be able to lease a place on its credit alone. If it is a new business, you will need your personal signature and credit for loans, leases, etc.

I would not guarantee a 10 year lease unless there was a clause in writing that if the business is sold, the guarantor can be transferred to the new owner. The landlord will probably want something stating the new owners FICO credit score must be over ____ number.

-Sean
 
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