Guarantees For Commercial Property Tenancies
Many commercial landlords require a guarantee from new tenants.
Whether you are a landlord, tenant, or guarantor, it is essential to obtain expert legal advice to fully understand your rights and obligations regarding a commercial property guarantee.
Our Commercial Property Department is one of the most successful and busiest in Nuneaton and Warwickshire, advising all parties involved in commercial leases for many years. Our Solicitors provide clear, practical advice on commercial property guarantees, ensuring you have the information needed to make the best decision for yourself and your business.
We are a diverse, multi-lingual law firm utilising best-in-class technology to deliver streamlined, modern, and highly effective commercial property law advice and representation. Our extensive experience in commercial property law has earned us a strong reputation for excellence with the UK’s top Barristers and King’s Counsel, Estate Agents, Independent Financial Advisers, Surveyors, and Lenders, who can offer additional support to our Commercial Property Department when required.
Common Questions About Commercial Lease Guarantees
What is a guarantee?
A guarantee is a commitment by one person (the Guarantor) that another person will fulfil their obligations. If that person fails, the guarantor becomes liable to fulfil those obligations, which can include paying any outstanding payments not honoured by the third party.
Given the serious consequences for a guarantor of a commercial lease if the tenant defaults on their obligations, it is crucial to seek legal advice before agreeing to act as a guarantor.
How are guarantees used in commercial leases?
Many commercial landlords now require tenants to provide a personal guarantee to ensure the fulfilment of lease agreement covenants, such as paying rent and making repairs.
You are more likely to be required to provide a guarantee if you are a startup company or have ‘poor covenant strength,’ indicating concerns about your ability to meet the lease obligations.
If you breach any of the covenants under your commercial lease, the landlord can recover money from the guarantor or demand they fulfil the unperformed obligations. In the case of a personal guarantee, you will have to use your own funds to cover the costs.
What is an Authorised Guarantee Agreement?
Most commercial leases require a tenant to seek permission if they wish to assign their lease to a new tenant. Often, the landlord will require an Authorised Guarantee Agreement (AGA) in exchange for granting permission. This involves you guaranteeing that the incoming tenant will fulfil their commercial tenancy obligations. If they do not, you will be liable to the landlord.
A landlord can also demand a third-party guarantee from the incoming tenant, thereby benefiting from both this and the AGA.
Why Choose Us to Advise on Commercial Lease Guarantees?
Whether you require warehouse, retail, manufacturing, or office space, entering into and negotiating a commercial lease can seem stressful and overwhelming, especially if a guarantee is required. However, with the right professional advice, things will run smoothly. Our Commercial Property Solicitors will examine the landlord’s terms regarding providing a guarantee and ensure you and the guarantor understand the current and future implications of such a commitment. And if you are a landlord concerned about the covenant strength of a tenant or have been asked to permit a lease assignment, we will explore your options and advise on the best way to protect your interests.
We pride ourselves on offering a personal service to all our clients and, where possible, are always available by phone and will respond to your email within 24 hours. As a full-service law firm, we can also provide advice on other commercial matters such as contracts and dispute resolution.
We leave no stone unturned when handling your commercial property matters. Each team member has the experience and resources to ensure that every aspect of the Guarantor Agreement requiring attention is addressed and managed. You can trust us to provide the commercially astute advice needed to protect your interests.
Our Solicitors are businesspeople themselves, so we understand that every decision you make must encompass commercial reality. We receive most of our instructions through word-of-mouth recommendations because business owners in Nuneaton and Warwickshire trust us to handle all legal matters concerning commercial tenancy guarantees.
We focus on achieving results in the swiftest, most cost-effective way possible. Our Commercial Property Solicitors will take care of your legal concerns so you can concentrate on your organisation’s future growth and prosperity.
To discuss commercial lease guarantees, please contact us using the form below.
Cocks Lloyd Solicitors provides exceptional Guarantees For Commercial Property Tenancies and Commercial Property services to clients. People choose and recommend us not just in Nuneaton, Tamworth, Atherstone, Hinckley and Leicester, but across Warwickshire, Staffordshire, Leicestershire and the West Midlands, and the whole of the UK, because we get results.
To receive expert advice and representation regarding Guarantees For Commercial Property Tenancies and Commercial Property, please contact us using the form below, call us on (0247) 6641642, email via the Request a Callback form on this contact page.