What Happens if I Break the Personal Guarantee Agreement?

Share the Knowledge!

I live in Houston, Texas. My husband signed a three (3) years commercial rental agreement under a company name (and LLC) but also signed a personal guarantee with his name only. We also have investment and personal properties some in both our names and some on his name only. If we brake the lease and close the business, can the landlord come after our personal and/or investment properties. If we change all the properties to only my name, can she still come after the properties because we are married? How could I protect my properties from the landlord in a case like this?

[NOTE: Articles and answers on DearEsq., while written and published by lawyers, do not constitute legal advice, and no attorney-client relationship is formed by your reading of this information. You should always consult with an attorney for any legal situations.]

The precise purpose of getting a personal guarantee is so that the landlord can collect from your personal assets. If you’re not willing to put your personal assets at risk, you shouldn’t sign the guarantee (of course, that may make getting a lease difficult or impossible, but that’s a separate problem).

Transferring your assets to someone else when you already know that you owe someone is called a fraudulent transfer, so that shouldn’t help either.

What I would suggest is that you try to work something out with the landlord, perhaps finding a replacement tenant, to minimize the financial impact on you.



Share the Knowledge!
Share:

Author: House Attorney