Guaranteeing a lease - is your head on the chopping block?

In brief - Make sure you manage the risk of providing a lease guarantee

The risk of guaranteeing a lease can be mitigated by offering alternative forms of security, limiting your guarantee, understanding what you are guaranteeing and entering into a side deed with the tenant.

Guarantor responsible for all tenant obligations under the lease

While a personal or corporate guarantee represents security, comfort and assurance for a landlord, conversely, it means obligation, risk and liability for a guarantor. However, although it may appear that giver and recipient sit on opposite ends of the spectrum, a guarantee can be a mutually acceptable outcome for all parties, provided that as a guarantor you understand the risk and manage it to an acceptable level.