When negotiating a lease, landlords and tenants have different needs to best protect themselves; which typically results in lengthy leasing documents to reflect both sides’ best interests. Now, let’s examine some of the most common terms including guarantees, co-tenancy, renewal options, and kick-out clauses, from both viewpoints.
Guarantees are essentially a credit facility, used to underwrite the value of a lease and provide security to the landlord. Given that newly formed entities may not be sufficiently capitalized, it is not uncommon for tenants to lack sufficient collateral or credit, requiring guarantee provisions to be included in a lease.
Guarantees can be personal, …read more
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