A landlord may request a principal of a tenant or an
affiliated entity to guarantee lease obligations if the
prospective tenant has a less-than-ideal credit profile. In a
tenant-friendly market, few landlords will be successful in this
pursuit. Consequently, a savvy landlord may request a
sufficient security deposit, plus a limited or "Good
Guy" Guaranty from a principal or affiliate of the
tenant.
Unfortunately, the landlord's perception of what obligations
are covered by a Good Guy Guaranty can be very different than the
prospective tenant's and guarantor's view.
Most landlords, tenants, and guarantors agree on the basic
premise for a Good Guy Guaranty, namely that its purpose is to (1)
incentivize the tenant to vacate the premises at the expiration or
earlier termination (due to, for example, the tenant's default)
of the lease, and (2) ensure that all accrued rent is paid up to
the date of such vacating. The Good Guy Guaranty attempts to
achieve these objectives by
