Building Better Leases Series – Guarantor

Building Better Leases

The Guarantor is responsible for guaranteeing the Lessee’s performance and accepts all of the liabilities included in the Lease. The Lessee is not the same as a Guarantor. A guarantor must be a third party, for example, the owner of a corporation. They must also sign a separate agreement in addition to having their name filled in on the blank on the Lease.

Guarantors are essentially a safety net; in the event that the Lessee does not pay Rent, the landlord can go after the Guarantor personally for payment. Guarantors are very common when businesses are in the startup phase and have weak financials.