Document background
The Lease Guarantee Agreement is a crucial document in Pakistani real estate transactions, commonly used when additional security is required beyond the standard lease agreement. This document becomes particularly relevant when landlords seek additional assurance regarding a tenant's ability to meet their lease obligations, especially in high-value commercial leases or when dealing with new or unestablished tenants. The agreement, governed by Pakistani contract and property laws, establishes a legally binding commitment from a third party (typically a parent company, bank, or financially stable individual) to assume responsibility for the tenant's obligations if they default. The Lease Guarantee Agreement must comply with specific requirements under Pakistani law, including proper execution, registration where necessary, and payment of applicable stamp duty. It serves as a risk mitigation tool for landlords while facilitating lease arrangements that might otherwise not be possible due to landlord concerns about tenant reliability.
