If I have a good guy guaranty, can I walk away from my lease?
Provided by: Jennifer Kirschenbaum, Esq.
November 30, 2017
If I have a good guy guaranty, can I walk away from my lease? I was told this was the case.
Well, that depends. Generally (without seeing your lease), a good guy guaranty means you signed the lease not only with a corporate entity (likely, your practice) as the tenant, but also in your individual capacity as the guarantor. The "Good Guy" part of the guaranty means you likely have a few conditions to meet upon vacating, whereupon if completed, you would not PERSONALLY be on the hook for any more rent or other payments. BUT, and this is a big BUT, a good guy guaranty does not exculpate the tenant from rent obligations under the lease. The tenant would, in all likelihood, be on the hook for the rest of the rent payments, additional rent, taxes (potentially), for the rest of the term.
So, if you have money in your practice, or owed to your practice, you likely can't walk away from your lease if the practice is the tenant. If you are looking to have a walk away option from a lease, you really need to have a termination right or buy out right from your lease, as well as walk away rights on any guaranty signed (where your good guy comes in). BUT, you need both. Guarantor's right out, and also the Tenant's right to get out.
Hope this helps! Read AND understand before you sign.
Contact Jennifer at Jennifer@Kirschenbaumesq.com or at (516) 747-6700 x. 302.
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com