The following post is copyrighted by Austin Tenant Advisors - . So you are a new business or startup and ready to lease your first commercial real estate space, however with little track record and little to no revenue how will you be able to get the landlord comfortable with having you as a tenant? Most landlords are hesitant to lease commercial space to startups as they have a high probability of going out of business and if they do will leave the landlord with an empty space and lost income. To ensure they get their rent in the event your business does not work out they may ask you to sign a personal guarantee. For example when searching for retail space for rent in Austin Tx most landlords will require that you personally guarantee the lease for the entire term. What is a Personal Guarantee?A personal guarantee is a written promise from a guarantor (business owner or other person) guaranteeing commercial lease payments in the event the business does not pay. In the event of non-payment the landlord can go after the guarantor personally for payment. This is a very common request when the business is a startup with weak financials. Do You Have to Sign a Personal Guarantee to Lease Commercial Space?Well if you really want a space bad enough and the landlord won’t let you have it without one then you have no choice. If you are able to show a track record of paying rent elsewhere have have steady, strong company profit / loss statements and balance sheets then you might be able to get away with not having one. If you don’t have the financial track record and sign the personal guarantee then try asking for the guarantee to expire after a certain amount of time has passed (e.g. 12-24 months) as long as you pay rent payments on time. How to Get Out of a Personal Guarantee EarlyYour options for getting out of a commercial lease personal guarantee early are pretty limited, however if it’s important then try one of the following:
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AuthorThe experienced commercial realtors at Austin Tenant Advisors specialize in representing the best interests of buyers and tenants in the Search, Selection, Negotiation, and Occupancy of Office, Retail, Industrial & Warehouse Space for lease, rent, or sale in and around Travis, Williamson, Hays, Bastrop, & Burnet Counties, which are the 5 largest counties in Central Texas. We serve the surrounding cities such as Pflugerville, Round Rock, Georgetown, Leander, Cedar Park, Lakeway, Bee Cave, Sunset Valley, Dripping Springs, Buda, Kyle, San Marcos, Burnet, Marble Falls, and more. Archives
November 2020
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