Unfortunately, COVID-19 has impacted many South Florida businesses in a negative way, and it is reasonable to expect commercial evictions to increase in the coming months. In a best-case scenario, when a tenant defaults the landlord and tenant will work together to try and reach an amicable resolution. Experience teaches, of course, that this does not happen often. Litigation is usually necessary, adding cost, delay, and stress to the fallout. But this doesn’t always need to be the case, especially if your commercial lease agreement includes a Good Guy Guarantee.

Recently, I encountered a commercial lease with a Good Guy Guarantee. While Good Guy Guarantees are not new (they are common in New York, for example), they are not seen frequently in Florida. In short, a Good Guy Guarantee is a negotiated early termination provision backed by a guarantor. If the tenant gives the landlord the agreed notice (usually 90 days) of its intent to vacate the premises, leaves the premises in “broom-clean condition,” and makes all lease payments up until the time it vacates, the tenant and guarantor are released from liability under the lease agreement. Generally, everyone is happy because the parties avoid the costs and uncertainties of litigation, the tenant vacates the premises without further financial penalty, and the landlord receives its premises without any further headache or complication.

Good Guy Guarantees are helpful in times of economic uncertainty – such as now – when ending your commercial lease might be better for your business in the long run. For example, you may want to cut overhead and lease a smaller or less expensive premises. Additionally, if your business is not profitable and you want to close it, it helps if you have a mechanism to efficiently end your lease. Under either circumstance, the Good Guy Guarantee gives you this freedom and flexibility.

Of course, not every landlord will be willing to consider or include a Good Guy Guarantee, and not every Good Guy Guarantee will have the same provisions and protections. But it is worth discussing with your landlord as it provides additional protection, especially in times like these where cutting large expenses and overhead will help keep your business going.

If you have any questions about Good Guy Guarantees or your commercial lease, call Barthelette Law today (561) 246-4137 or e-mail [email protected]!

You may also request a free consultation here —> https://barthelettelaw.com/contact-us/