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Commercial Lease Guarantor Form Template for England and Wales

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Key Requirements PROMPT example:

Commercial Lease Guarantor Form

"I need a Commercial Lease Guarantor Form for a parent company guaranteeing a retail tenant's obligations in a shopping center, with step-in rights and a liability cap of £2 million, to commence from March 2025."

Document background
The Commercial Lease Guarantor Form is essential in commercial property transactions where additional security is required beyond the tenant's covenant. This document is commonly used in England and Wales when letting high-value commercial properties, when dealing with new or untested business tenants, or when the tenant's financial standing alone is insufficient. It creates a legally enforceable obligation on the guarantor to step in and meet the tenant's obligations, including rent payments and other lease covenants, if the tenant fails to do so. The form must comply with specific statutory requirements and case law principles under English and Welsh jurisdiction.
Suggested Sections

1. Parties: Details of Landlord, Tenant, and Guarantor including full legal names and addresses

2. Background: Context of the guarantee and reference to the main lease agreement

3. Definitions: Key terms used throughout the guarantee including 'Lease', 'Tenant Covenants', 'Guaranteed Obligations'

4. Guarantee and Indemnity: Core obligations of the guarantor including primary guarantee and indemnity provisions

5. Duration: Period of guarantee validity and circumstances affecting its continuation

6. Guarantor's Obligations: Specific duties and responsibilities including payment obligations and performance guarantees

7. Execution: Signature blocks and attestation requirements for all parties

Optional Sections

1. Step-in Rights: Optional provisions allowing guarantor to take over lease on tenant default, typically used in high-value commercial leases

2. Limited Liability Provisions: Optional caps or limitations on guarantor's liability, typically included when negotiated with institutional guarantors

3. Corporate Authority: Optional confirmation of corporate power to give guarantee, included when guarantor is a company

Suggested Schedules

1. Schedule 1 - Copy of Lease: Attached copy of the principal lease being guaranteed

2. Schedule 2 - Corporate Authorization: Board resolutions or other corporate approvals when guarantor is a company

3. Schedule 3 - Financial Information: Guarantor's financial statements or proof of means as required by landlord

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions






























Clauses






























Industries

Landlord and Tenant Act 1954: Primary legislation governing commercial tenancies in England and Wales, particularly important for security of tenure provisions that affect the guarantor's obligations

Law of Property Act 1925: Establishes fundamental property law principles and sets out requirements for written guarantees in property transactions

Statute of Frauds 1677: Historical but still relevant legislation requiring guarantees to be made in writing and signed to be legally enforceable

Landlord and Tenant (Covenants) Act 1995: Governs the treatment of guarantees on assignment and contains important anti-avoidance provisions affecting guarantor obligations

Companies Act 2006: Relevant when the guarantor is a company, determining their legal capacity to provide guarantees and associated corporate requirements

Consumer Credit Act 1974: May be applicable if the guarantor could be considered a consumer, providing additional protections

Unfair Contract Terms Act 1977: Sets standards for reasonable terms in contracts, including guarantee provisions

Consumer Rights Act 2015: Provides protection for individual guarantors if they fall under consumer classification

K/S Victoria Street v House of Fraser [2011]: Key case law establishing restrictions on repeat guarantees and their validity

Hindcastle v Barbara Attenborough Associates [1997]: Important case law determining the effect of tenant insolvency on guarantor obligations

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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