Property ManagementIntermediateDelaware Exam

What is 'lease guaranty' in Delaware commercial real estate?

ASimply the landlord's own personal guarantee that the tenant will eventually receive all promised improvements, across most transactions

BA personal or corporate guarantee by a third party (guarantor) to pay rent and fulfill lease obligations if the primary tenant defaultsCorrect

CA government program guaranteeing commercial tenants against eviction

DThe tenant's right to a guaranteed renewal option at a fixed rate

Why A personal or corporate guarantee by a third party (guarantor) to pay rent and fulfill lease obligations if the primary tenant defaults Is Correct

Answer B: A personal or corporate guarantee by a third party (guarantor) to pay rent and fulfill lease obligations if the primary tenant defaults

A lease guaranty is a binding agreement by a third party (individual or corporate guarantor) to fulfill the tenant's lease obligations if the tenant defaults. Landlords often require guaranties from small businesses, startups, or tenants with limited credit history — for example, requiring the principal owner to personally guarantee the company's lease.

Exam Tip: Property Management

Property management questions cover landlord-tenant law, security deposits, and maintenance responsibilities. Know the differences between gross, net, and percentage leases.

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