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 if it came to that. 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?
Unless you are renting to a well established nationally known company (Ford, IBM, etc), I would get the guarantee. The fact that a company has money is irrelevant. On what the company spends that money on is relevant. The magical power of a personal guarantee by an officer of the company is that it aligns the spending preferences of the company with those of the guarantor, which will just happen to align with your preferences.
Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
2y
I would tell the attorney that if he is that impressed with his client's annual revenues and future prospects he is welcome to apply to guarantee the lease.
I would structure this so the lease is between you and the tenant, the corporation and an officer are guarantors that gives you three parties to recover from.
Real Estate Broker · San Diego, CA · Member since 2016 · 187 posts · 117 votes
2y
I would definitely insist on a guarantor from the company. What if they let the employee go or he or she decides to quit? Who's responsible for the rent at that time.