The LLC May Not Be the Only Party at Risk

A tenant may sign a lease through an LLC and still be asked to sign a personal guaranty. That document can make the owner personally responsible if the business cannot pay or perform.

Read the Guaranty as a Separate Contract

Determine who guarantees the obligation, which lease duties are covered, whether liability is capped and how long the guaranty lasts. Some guaranties extend to renewals, amendments, expansions and holdover periods.

What Happens After Assignment or Sale?

A business owner may assume that selling the company or assigning the lease ends personal liability. The documents may require the landlord's written release. Consent to an assignment is not always the same as releasing the original guarantor.

Consider Negotiating the Exposure

Depending on the transaction, the parties may discuss a dollar cap, limited period, reduction after timely performance, termination following assignment or a guaranty tied to particular obligations. The landlord may decline, but the issue is easier to address before signing.

Review the Whole Lease

Base rent, operating expenses, repair duties, insurance, indemnity, default remedies, relocation rights, restoration and renewal provisions can all increase the obligation covered by the guaranty.

Commercial Lease Review

Hayes Legal Solutions reviews and negotiates Oklahoma commercial leases for small businesses. Commercial leases generally require a separate quote based on length, complexity and the requested negotiation work.

Statewide Oklahoma Contract Review

Hayes Legal Solutions, PLLC provides virtual contract-review appointments for clients throughout Oklahoma, including Oklahoma City, Edmond, Norman, Moore, Yukon, Mustang, Tulsa, Broken Arrow, Stillwater, Lawton, Enid, Shawnee and other Oklahoma communities. The firm reviews Oklahoma agreements for consumers, employees, landowners and small businesses.