Property Management
What is a 'lease guaranty' in Delaware commercial real estate?
AThe landlord's guarantee of the tenant's business success
BA personal guaranty by the tenant's principals or a third party that lease obligations will be fulfilled if the tenant defaults✓ Correct
CA government program guaranteeing commercial leases for small businesses
DA guarantee from the broker that the tenant will perform
Explanation
A lease guaranty is a personal guarantee from the tenant's owners, parents, or a creditworthy third party to fulfill the tenant's lease obligations if the tenant defaults. Lenders often require guarantees when the tenant entity has limited credit history.
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Key Terms to Know
Right of First Refusal
A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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