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Personal Guarantee Rental Agreement Template for England and Wales

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Key Requirements PROMPT example:

Personal Guarantee Rental Agreement

"I need a Personal Guarantee Rental Agreement for a commercial property in Manchester where the tenant is a new startup company, and their director will act as guarantor starting from March 2025; the guarantee needs to cover both rent and property maintenance obligations."

Document background
The Personal Guarantee Rental Agreement is a crucial document in property leasing transactions across England and Wales, commonly used when landlords require additional security beyond the tenant's covenant. This agreement is particularly relevant for student lettings, commercial leases, or situations where tenants have limited credit history or financial standing. The document outlines the guarantor's obligations, the extent of their liability, and the circumstances under which the guarantee can be enforced. It provides essential protection for landlords while ensuring clear terms for all parties involved.
Suggested Sections

1. Parties: Identifies the guarantor, landlord, and tenant

2. Background: Explains the context of the guarantee and references the main lease

3. Definitions: Defines key terms used throughout the agreement

4. Guarantee and Indemnity: Core obligations of the guarantor

5. Duration of Guarantee: Period for which the guarantee remains valid

6. Guarantor's Obligations: Specific duties and responsibilities of the guarantor

7. Enforcement: Conditions under which the guarantee can be enforced

Optional Sections

1. Joint and Several Liability: Required when multiple guarantors are involved

2. Assignment and Transfer: Provisions for transferring guarantee obligations

3. Step-in Rights: Allows guarantor to take over tenant's lease

Suggested Schedules

1. Schedule 1 - Main Lease Details: Copy or summary of the main lease agreement

2. Schedule 2 - Guaranteed Obligations: Detailed list of obligations being guaranteed

3. Appendix A - Financial Information: Guarantor's financial details and status

Authors

Alex Denne

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

Relevant legal definitions















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Industries

Contracts (Rights of Third Parties) Act 1999: Key legislation governing how third parties may enforce terms of a contract, relevant for guarantee agreements where the guarantor is a third party to the main rental agreement

Statute of Frauds 1677: Historic legislation requiring guarantees to be made in writing and signed to be legally enforceable

Landlord and Tenant Act 1985: Fundamental legislation governing the relationship between landlords and tenants, including basic rights and obligations

Housing Act 1988: Key legislation for residential tenancies, particularly relevant if the guarantee relates to an assured or assured shorthold tenancy

Landlord and Tenant Act 1954: Important legislation for commercial property leases and their security of tenure

Housing Act 2004: Modern legislation covering various aspects of housing law, including deposit protection and housing standards

Consumer Rights Act 2015: Legislation protecting consumer rights, applicable if the guarantor is acting as a consumer rather than in a business capacity

Unfair Contract Terms Act 1977: Legislation regulating unfair terms in contracts, particularly relevant for guarantees to ensure terms are fair and reasonable

Consumer Credit Act 1974: May be relevant if the guarantee arrangement could be construed as a credit agreement

Statute of Frauds Amendment Act 1828: Historical legislation providing additional requirements for guarantee agreements

Mercantile Law Amendment Act 1856: Legislation affecting commercial guarantees and their enforcement

UK General Data Protection Regulation: Regulations governing how personal data must be handled and processed in the guarantee agreement

Data Protection Act 2018: UK's implementation of data protection requirements, relevant for handling personal information of guarantors

Rule Against Penalties: Common law principle ensuring that any penalty for breach of guarantee is a genuine pre-estimate of loss rather than a punishment

Undue Influence Principles: Legal principles protecting guarantors from being pressured or improperly influenced into providing guarantees

Misrepresentation Rules: Legal principles dealing with false statements or omissions that may have induced the guarantor to enter into the agreement

Doctrine of Severance: Legal principle allowing courts to remove invalid clauses while maintaining the rest of the guarantee agreement

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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