Many landlords will consider asking the tenant of a hospitality
lease to provide a guarantor on the grant of the new lease.
Guarantors offer some security to landlords in the event that the
tenant doesn't comply with the terms of the lease.
They are especially important when the tenant has poor covenant
strength, for example, if the tenant is a recently incorporated
limited company with no assets or the tenant is an individual
starting a new business with no trading history.
This is often the case when a tenant is setting up a new
restaurant, bar or other hospitality business, and the landlord is
looking for ways to reduce the risk of granting a lease to a new business.
An alternative to a guarantor is for the landlord to ask for a
rent deposit. However, guarantors are sometimes preferred by both
parties. The tenant may find it difficult to pay a lump sum upfront
if they are a new business, and it may be preferable for the
landlord to have a guarantor throughout
