Exit & Transfer
Good guy guaranty
Also called: good guy clause, surrender guaranty
A good guy guaranty is a limited personal guaranty under which the guarantor is liable for rent only until the tenant vacates the premises, surrenders them in the required condition, and pays everything owed through that date. It caps a principal's exposure at the cost of an orderly exit rather than the full remaining term.
A full [personal guaranty](/glossary/personal-guaranty) puts a principal on the hook for every dollar of a ten year lease. A good guy guaranty puts them on the hook for leaving properly. The difference is usually the difference between a signable deal and an unsignable one.
The conditions that release the guarantor
A good guy guaranty is a conditional release, and every condition is a place the release can fail:
- Advance written notice, commonly 90 to 180 days before surrender. Give the notice late and the guaranty does not terminate.
- Actual vacancy and surrender of possession on the notice date, with keys delivered and no subtenants or occupants remaining. A holdover subtenant is a common failure point.
- Payment of all rent and additional rent through the surrender date, including a CAM reconciliation that may not have been issued yet. Ask that unbilled reconciliation amounts be estimated and settled rather than left open.
- The premises left in the required condition, which pulls in the surrender clause and any restoration obligation. Where the lease requires removal of specialty installations, restoration cost lands squarely on the guarantor.
- No default at the time of surrender in some drafts, which is broader than it looks.
What to negotiate
- Shorten the notice period, or provide that a shorter notice simply extends liability by the shortfall rather than voiding the release entirely.
- Confirm the guaranty covers base rent and additional rent only, not consequential damages, lost future rent, or the landlord's re-letting costs.
- Cap restoration exposure by agreeing at signing which improvements must be removed, ideally in an exhibit rather than by later landlord election.
- Make the guaranty personal to the named individual and non transferable to their estate beyond a stated period.
Where it goes wrong in a redline
The guaranty is usually a separate exhibit, which means it can be revised without a single mark appearing in the lease body. Compare the guaranty exhibit independently in every round. A change from "all Rent through the Surrender Date" to "all Rent through the Surrender Date and all costs incurred by Landlord in reletting" reads like housekeeping and is not.
Catch this clause when it changes
CRE Redline pulls every tracked change out of each redline round, ranks it by how much it moves, and keeps contested clauses visible from round to round. Round 1 of every deal is free.
Analyze your first round freeRelated terms
A personal guaranty makes an individual or a parent company liable for a tenant entity's lease obligations, so the landlord can pursue the guarantor directly if the tenant defaults.
A surrender clause states the condition in which a tenant must return the premises at the end of the term, including what improvements must be removed and what may remain.
Assignment and subletting provisions govern whether and how a tenant may transfer its lease or hand possession to someone else, and on what conditions the landlord may withhold consent.
A burndown is a schedule under which a tenant's security deposit or letter of credit is reduced over time as the tenant demonstrates payment performance.
This page is general information, not legal advice. Review lease language with qualified counsel.