How do you write a good man clause?

In order to allow a Good Guy Clause, many landlords require a lump sum payment or ‘tail’ to be paid upon tenant surrendering the premises. For example, a good Guy Clause will be included in the lease so long as the tenant agrees to pay a lump sum payment equal to 3 months’ rent upon surrendering the premises.

What’s a good guy guarantee?

When negotiating a commercial real estate lease for office space, you may be asked by a landlord to agree to a ‘good guy’ guarantee. This ‘good guy’ guarantee is a special type of personal guarantee that provides protection to landlords in the event a tenant goes into default or is otherwise unable to continue.

What is the difference between good guy guarantee and personal guarantee?

The distinction between a good guy clause and a traditional/full personal guarantee is that in a good guy clause an individual’s personal liability ends when the space is vacated. Therefore, if a company dissolves and the space is vacated, the individual is absolved of any further responsibility.

What are ratchet clauses?

A clause in a lease which provides that the rent payable by the tenant after a rent review must not be less than the rent payable immediately before the rent review. Ratchet clauses are relatively common in Australian commercial leases.

What is the difference between guarantee and Guaranty?

Guarantee can refer to the agreement itself as a noun, and the act of making the agreement as a verb. Guaranty is a specific type of guarantee that is only used as a noun.

What is a soft ratchet clause?

A soft ratchet clause ensures the rental figure will never drop to less than the original sum agreed between the landlord and the tenant. A hard ratchet clause ensures the rental figure will never drop to less than the last rental figure agreed at the previous rental review.

What does soft ratchet mean?

A soft ratchet (also known as a commencement ratchet) will allow rental to reduce, but never to an amount which is less than the annual rent payable at commencement of the current lease term (or in some instances the previous term if the review date is also a renewal date).

What the difference between a promise and a guarantee?

As nouns the difference between guarantee and promise is that guarantee is anything that assures a certain outcome while promise is an oath or affirmation; a vow.

What is the difference between grantor and guarantor?

Grantors – the party who transfers title in real property (seller, giver) to another (buyer, recipient, donee) by grant deed or quitclaim deed. Guarantors – a person or entity that agrees to be responsible for another’s debt or performance under a contract if the other fails to pay or perform.

What is cap and collar rent?

Collar and cap is a commonly-used mechanism to set a maximum and minimum increase on each review. So, for example, a collar of 2% and a cap of 5% ensures that the rent will always increase between 2% and 5% per annum on each review, even if the index has increased by more or less than those figures.

What does CPI mean on a lease?

Consumer Price Index
In commercial real estate, the Consumer Price Index (CPI) refers to the lease amount paid by urban consumers for housing services and how that pricing corresponds to regional or national inflation.

What is a hard ratchet?

Hard & Soft Ratchet Clauses There are two types of ratchet clauses, namely the “hard ratchet” and the “soft ratchet”. A hard ratchet will never allow the annual rent to reduce below what was previously payable.