Is an individual guarantor necessary when leasing to a company?

Question

We have a condo we're looking at leasing to a company for their employee. The company will sign the lease, with the employee listed as the tenant. Do we need a guarantor listed as well? The company's legal counsel has said a guarantor is not needed, citing the company's annual revenue and an employee, effectively, being unwilling to cut a check on behalf of their employer. While I understand that, my understanding and what our own attorney has confirmed, is that there should be an individual who serves as the guarantor in this type of instance. Thoughts?

Henley Smokey · Answer

Yes, Ty, that does help and we appreciate you taking the time to reply with your feedback and insights- Thanks so much!

Ty Coutts · Answer

It's generally advisable to have a guarantor in such lease agreements, as it provides an additional layer of security. While the company's legal counsel is confident in their financial stability, having a guarantor ensures that you're protected if the company fails to meet its obligations. Your attorney's advice aligns with standard practices to mitigate risk. If the company is hesitant, consider their financial statements to assess their stability or negotiate other security measures like a larger security deposit. Ultimately, having a guarantor offers added peace of mind. Hope this helps. Feel free to reach out to me directly if you have any other questions/just want to discuss!

Is an individual guarantor necessary when leasing to a company?

2 Replies