Property Management
What is 'lease guaranty' in Delaware commercial real estate?
AThe landlord's guarantee that the tenant will receive the promised improvements
BA personal or corporate guarantee by a third party (guarantor) to pay rent and fulfill lease obligations if the primary tenant defaults — commonly required from parent companies or principal owners of new businesses✓ Correct
CA government program guaranteeing commercial tenants against eviction
DThe tenant's right to a guaranteed renewal option at a fixed rate
Explanation
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.
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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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Math Concepts
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