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Keeping Your Guarantee Or Indemnity In Tact: Tips For Landlords
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Date: November 9 2007 |
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One of the critical business terms often negotiated in a commercial lease is the provision of a guarantee or indemnity by a party related to the tenant. This is typically done in order to bolster the tenant’s financial covenant should the landlord think the tenant may not be able to meet all its obligations under the lease, to ensure there are sufficient pockets to dip into. But once the guarantee or indemnity is negotiated, signed and delivered to the landlord, often no more thought is given to it until the tenant has breached the lease and the landlord wishes to enforce the guarantee. At that time however, a landlord may discover through its legal counsel that the guarantee or indemnity is no longer enforceable. This paper will outline some ways in which a landlord can protect itself.
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