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  1. #1

    Default "Hobbled guarantee" and Long first term warning

    Just wanted to warn people of an "out" clause used by a past tenant concerning Personal Guarantee. This tenant agreed to a very long first term (8 years). Somehow though, a "hobbled" guarantee got onto the Lease that stated the personal guarantee was only worth 12 months rent maximum.

    This tenant later "did the runner" and left us struggling to find a new tenant in the currently challenging CHCH leasing market . They also totally emptied their company claiming no funds, so we were forced to call upon the minimal Guarantee.

    We ended up settling out of court which probably saved us money in the end. We converted their space to an office and luckily now have a good long term tenant - athough the market has changed down in the Suburbs.

    So watch out for this - Don't accept anything less than a full personal guarantee.

    These people continued immediately on leaving our building under a new company and are carrying out a similar business. So likely using the same technique as an out.

  2. #2
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    7,958

    Default

    Yep been through that.

    PGs all the way!
    Squadly dinky do!


 

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