How to Review a Personal Guaranty in a Commercial Lease
To review a personal guaranty in a commercial lease, start with our lease checklist, which lists the personal guaranty among the terms to cover, and have your attorney review the legal language.
At Reach Commercial Real Estate, we represent tenants. We help you find locations, compare costs, investigate property questions and negotiate the lease. You bring your business plans. We help you evaluate where those plans fit.
This guide covers where the personal guaranty sits among our lease terms, what Florida statutes 83.05, 83.08 and 83.20 say about unpaid rent on a lease of premises other than a dwelling unit, and who reviews the legal language.
1. Find the personal guaranty on your list of lease terms
We advise you to ask for each term on our lease checklist. The checklist lists term and renewal options, landlord work versus tenant work, TI allowance, free rent during buildout, CAM caps, exclusive use, use clause, personal guaranty, assignment and a permit contingency.
Once you select a property, we negotiate the business terms. We focus on permitted use, approval contingencies, landlord delivery, tenant improvement allowance, rent commencement, maintenance obligations, additional charges, and personal guaranty and exit terms.
2. Read what Florida says when rent goes unpaid
Section 83.05(1) covers a lease of land or premises other than a dwelling unit. If the tenant fails to pay the rent at the time it becomes due, the lessor has the right to obtain possession of the premises as provided by law.
3. Read the notice periods
Section 83.20(2) covers a person who holds over without permission after any default in the payment of rent. It applies when 3 days' notice in writing requiring the payment of the rent or the possession of the premises has been served.
Section 83.20(3) refers to 15 days' written notice requiring the cure of a material breach of the lease, other than nonpayment of rent, or the possession of the premises. The subsection applies only when the lease is silent on the matter or when the tenancy is an oral one at will.
4. Read what the landlord's lien covers
Section 83.08(2) gives a person to whom rent is due a lien for the rent upon all other property of the lessee or the lessee's sublessee or assigns, usually kept on the premises. The statute says this lien is superior to any lien acquired subsequent to the bringing of the property on the premises leased.
5. Take the guaranty to your attorney
Your Florida commercial leasing attorney reviews the legal language and documents.
We bring the business terms to that review. Those terms include the personal guaranty and exit terms.
Our role is to help bring these findings into your property decision. Your qualified professionals and reviewing agencies determine the requirements.
Extra items to check
Exit terms. We focus on personal guaranty and exit terms when we negotiate the business terms.
Assignment. Assignment is on our lease checklist. The landlord's lien under section 83.08(2) covers property of the lessee or the lessee's sublessee or assigns, usually kept on the premises.
Written lease. Section 689.01(1) requires an instrument in writing for an estate or interest for a term of more than 1 year.
Schedule changes. If the project schedule changes, raise the lease implications early. Review the documents with your attorney rather than assume a delay changes your payment obligations.
Start your search with Reach
You do not need to find the property before calling us. Helping you find and evaluate the property is part of our work.
Bring your requirements, budget, preferred area and target opening date. We ask what the proposed lease includes rather than rely on the label. We will use those details to build your search, compare locations and negotiate the lease. In most deals the landlord pays our fee.
Already found a space? Send me the address and listing. We will start with the property questions and deal terms you need to investigate.
Cassandra Hartford, Reach Commercial Real Estate, 321-514-0876, cassandra@reachcommercialre.com, 909 E New Haven Ave #300, Melbourne, FL 32901.
See tenant representation and the leasing guide.
Related: the guide to operating expense charges.
Frequently Asked Questions
How can a landlord recover possession of premises other than a dwelling unit?
Section 83.05(2) says the landlord recovers possession of rented premises only in an action for possession under s. 83.20 or another civil action in which the issue of right of possession is determined, when the tenant has surrendered possession of the rented premises to the landlord, or when the tenant has abandoned the rented premises.
Who reviews the legal language of a personal guaranty?
Your Florida commercial leasing attorney reviews the legal language and documents. We negotiate the business terms, and the personal guaranty is one of them.
Sources
Written by Cassandra Hartford, founder and CEO of Reach Commercial Real Estate. She has worked in Brevard County commercial real estate for 17 years, representing buyers, sellers, landlords, and tenants across Florida's Space Coast.
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