A “Good Guy Guaranty” is a shorthand phrase to describe an agreement between the principal or owner of a corporate tenant and the landlord that holds the principal or owner, typically an individual, personally liable for the corporate tenant’s obligations under a lease until the tenant vacates and surrenders the premises. Good Guy Guaranties became popular in the 1980s when commercial landlords – frustrated by shell-corporation tenants, which operated rent-free while using technical defenses to forestall eviction proceedings – wanted to discourage such behavior by using the specter of personal liability. Since that time, use of the Good Guy Guaranty has evolved and now, the agreements can range from the basic to the very complex, where tenant must comply with a host of conditions before surrendering the premises and effectively terminating guarantor’s liability.
Itkowitz PLLC litigates many Good Guy Guaranty cases. Although this topic could be considered an important sub-set of commercial landlord and tenant litigation, we gave it its own section here for a few reasons. First, guaranty litigation is logistically separate from a summary proceeding for the recovery of real property. Second, guaranties have gotten increasingly sophisticated. Third, the guaranty often becomes the most important consideration in a commercial landlord and tenant dispute.