Good Guy Guarantees: Why They’re Not the Protection You Think
In New York commercial leasing, few clauses are as misunderstood as the Good Guy Guarantee. Tenants often assume it’s a simple protection that limits personal liability. Landlords often assume it gives them an easy exit if the tenant defaults. Both are wrong.
What Is a Good Guy Guarantee?
A Good Guy Guarantee (GGG) is a personal guarantee signed by a principal of the tenant. It typically provides that if the tenant defaults, the guarantor remains liable until the space is vacated. To trigger the protection, however, the tenant must give proper notice and ensure that all rent and charges under the lease are fully paid through the date they vacate.
The Tenant’s Misconception
Tenants often believe a GGG shields them from personal liability. In reality, it only limits liability if the guarantor follows the exact steps: give notice, keep all payments current, and return the space in the required condition. If the tenant stays in the space without paying, or fails to follow notice procedures, the guarantor’s exposure grows quickly.
The Landlord’s Misconception
Landlords sometimes assume a GGG ensures a smooth exit. But it doesn’t guarantee the tenant will vacate, and it doesn’t cover all damages, like re-letting costs or build-out expenses. Landlords may still face long vacancies or legal fights. A poorly drafted GGG can also leave gaps if the tenant tries to exploit notice or payment requirements.
Why It Matters in Litigation
GGGs often become central in disputes. Tenants may argue they satisfied their obligations by vacating, while landlords may claim the tenant failed to give proper notice or left rent unpaid. Courts closely examine the language of the guarantee—and even small drafting differences can shift liability dramatically.
Negotiating Smarter
- For Tenants: Push for clear procedures on notice and limit liability to rent only, not additional charges.
- For Landlords: Tighten language to require notice, full payment of all sums due, and compliance through vacatur.
- For Both: Understand that a GGG is not one-size-fits-all; tailoring matters.
Bottom Line
A Good Guy Guarantee is neither a silver bullet for landlords nor a free pass for tenants. At JDE Law Firm, PLLC, I help clients negotiate and litigate GGGs with a clear eye on what they actually mean—not what people assume they mean.
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