Don't Let Tenant's Limits Render Guaranty Useless

At first, a guaranty from a tenant that you’re unsure about seems like a great safety net. Another party will take over the tenant’s lease obligations if it fails to do so itself, so you won’t be left on the hook trying to mitigate the financial or other damage. In isolation, a guaranty with no limits can work well. But you’re likely to find tenants and their guarantors demanding certain limits on guaranties. There are several common limits they may ask for—for example, a dollar limit on the guaranty.