In commercial leasing, confidence can be a double-edged sword. Landlords often breathe a sigh of relief once they secure a signed lease agreement with a personal or corporate guaranty attached. On paper, it looks like a safety net: a legal promise that rent and obligations will be fulfilled, even if the tenant defaults. But that “ironclad” clause? It’s not always as unbreakable as landlords assume.
According to Nativ Winiarsky, a seasoned litigator and partner at Kucker Marino Winiarsky & Bittens, the cracks in many leases only surface when landlords try to enforce them, usually when it’s too late to fix them. And in those moments, even the strongest-seeming agreements can unravel.
You’d think a signed guaranty would be enough. Nativ Winiarsky says that courts don't just look at the signature; they also look at the language, structure, and enforceability of the document itself.
Some common mistakes are using vague language, leaving out important terms, or including guarantee clauses that accidentally end when the lease is changed in certain ways. Some courts have said that a guarantee was no longer valid just because the lease was changed without the guarantor's knowledge, even if the change was small.
Sometimes, landlords don't know the difference between continuing and limited guarantees. If the clause isn’t clear about whether the guaranty survives renewals, expansions, or rent increases, enforcement becomes a legal gray area.
Most landlords zero in on the lease itself, the square footage, the term, and the base rent. But the guaranty is what truly holds weight when things go south. And if it’s not drafted with precision, it won’t stand up when it matters most.
In booming markets, personal and corporate guarantees offer a sense of comfort. But Nativ Winiarsky has repeatedly seen landlords lulled into a false sense of security, believing the existence of a guaranty is enough to shield them from tenant defaults.
What often gets overlooked is whether the guarantor is truly collectible. Is the individual solvent? Is the corporation a shell entity? Have there been prior disputes or bankruptcy filings? Without these checks, the guarantee may not offer much in practical terms, even if it looks enforceable on paper.
In one recent case Winiarsky handled, a landlord pursued a personal guarantor only to discover that the individual had moved assets out of reach long before the default. The paperwork was flawless, the recovery was not.
So what makes a guarantee enforceable not just technically, but functionally? At Kucker Marino Winiarsky & Bittens, the approach starts with treating the guaranty as a standalone document that deserves just as much scrutiny as the lease itself.
That means:
When asked how clients can avoid costly disputes, Winiarsky emphasizes the importance of walking through worst-case scenarios during the drafting phase, not after something has gone wrong. “It’s not pessimism; it’s preparedness,” he notes.
One of the biggest mistakes landlords make is waiting until a tenant defaults to examine their guaranty. At that point, it’s no longer a question of tweaking language; it’s a matter of hoping the existing terms hold up under stress.
Nativ Winiarsky urges landlords to audit their guarantees well before trouble arises. He thinks that enforcement should never be a discovery process; you should already know exactly what your document does and doesn’t do.
That audit often reveals uncomfortable truths: guarantees tied to outdated corporate entities, missing witness signatures, or obligations that don’t extend past the original lease term. But catching those issues early can be the difference between a six-figure recovery or a total loss.
If you’re a commercial landlord, it may be time to revisit your leasing playbook. A well-drafted lease is only half the battle. Without a functionally sound and enforceable guaranty, your fallback plan might be full of holes.
Winiarsky and the team at Kucker Marino Winiarsky & Bittens advise clients to take a proactive stance, reviewing guaranties annually, especially when leases are amended, renewed, or assigned. These aren’t set-it-and-forget-it clauses. They evolve with your tenant’s behavior and your own exposure.
And if you're entering into a new lease, consider the guaranty as a strategic tool, not a standard formality. In a post-pandemic real estate landscape filled with uncertainty, smart guarantees are the quiet heroes that help landlords weather the storm.
