CRE glossary
Good guy guaranty
A good guy guaranty is a limited personal guaranty in a commercial lease, most common in NYC office and retail, where the principal of the tenant company guarantees rent payment only up until the day the space is vacated and surrendered to the landlord in good condition. It's a middle-ground between full personal guaranty and no guaranty at all, designed to discourage tenants from holding over while protecting the principal from unlimited liability.
Good guy guaranties exist because of New York's tenant-friendly eviction process. A landlord trying to evict a non-paying tenant can spend 6–12 months in court before regaining possession; the good guy guaranty short-circuits this by making the principal personally liable for rent until the space is vacated. The tenant's principal has a strong incentive to surrender keys promptly rather than fight an eviction.
Standard good-guy-guaranty terms: principal is liable for unpaid rent and additional rent (NNN charges, late fees) accrued through the date the tenant vacates AND surrenders the space in broom-clean condition with all keys returned. Once surrender happens, the guaranty terminates. The principal is NOT liable for the lease's full remaining term, that's what distinguishes it from a full personal guaranty.
Good-guy-guaranties are non-binding outside New York and a few other tenant-favorable jurisdictions. In Texas, Florida, and most secondary markets, a landlord facing a non-paying tenant can evict in 30–60 days, so the guaranty's leverage is weaker. Tenants in these markets should push back harder on the request.
Example
- Lease total rent
- $2.4M over 7 years
- Tenant defaults month 18
- Owes $300k accrued
- Without GGG
- Landlord pursues corporate tenant; eviction takes 9 months
- With GGG, tenant surrenders cleanly month 18
- Principal owes $300k accrued; no further liability
- With GGG, tenant holds over month 18
- Principal owes $300k + monthly rent until surrender
Broker perspective
When you're tenant-rep and the landlord asks for a good-guy-guaranty, accept it for any deal under $1M total rent, it's standard NYC. Push back on landlord's-counsel attempts to expand it: limit to base rent only (not punitive damages or attorneys' fees), require the landlord to mitigate (re-let the space), and require written notice + cure period before triggering. The default landlord template favors the landlord by default.
Frequently asked
People also ask
Is a good-guy-guaranty the same as a personal guaranty?
No. A personal guaranty extends to the full lease term and unlimited damages. A good-guy-guaranty terminates on surrender and is capped at accrued unpaid rent only.
Where is GGG common?
NYC office and retail (most common), Boston, Chicago. Less common in TX, FL, CA outside of high-end Manhattan-equivalent submarkets.
Should I sign a GGG as a startup founder?
Likely yes if you want NYC office space. Negotiate the limits hard, base rent only, mitigation requirement, written notice + cure. Get personal counsel to review.
Can a GGG be replaced with a security deposit?
Sometimes. A 6–12 month security deposit can substitute for a GGG in negotiation. Letter of credit is even better, landlord gets confidence, tenant doesn't have personal liability.
Related terms
Letter of credit (LOC)
Bank-issued guarantee of rent payment, used in lieu of cash security deposit, especially for credit-light tenants.
Security deposit
Cash held by the landlord as collateral for the tenant's lease obligations — typically 1–3 months of base rent.
Letter of intent (LOI)
A non-binding outline of the major business terms, rent, term, TI, options, that becomes the basis for the binding lease.
Holdover
When the tenant stays past lease expiration without a new agreement, usually triggers a steep rent premium (150–200% of base rent).
See good guy guaranty extracted from a real lease.
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