Should I Sign a Personal Guaranty for Office Space

My simple answer to this question is that signing a FULL personal guarantee should be avoided.

Please note that a full personal guarantee is very different in comparison to a good guy guarantee which is a LIMITED form of a personal guarantee that most tenants in Manhattan sign. Read more information about the good guy clause.

Let's delve further into an understanding of a full personal guarantee. Let's say that you sign a 5-year lease which contains a full personal guarantee. Let's also say that after year 2 into your lease, your company becomes financially insolvent and unable to pay rent. You remove all your belongings from the space and you are no longer operating as a business. In this example, since you signed a full personal guarantee for that 5-year lease, you as the tenant, are still personally liable for the remaining 3 years of rent that is due to the landlord even though your company is no longer operating. Now that is a horrible deal. It is a perfect example of how signing a full personal guarantee can open a tenant up to immense liability.

If you have additional questions, please call or e-mail me. Thanks and have a great day.